final
TRANSCRIPT
“An investigation into the strategic
planning process at JD
Weatherspoon”?
Loa0122
181172
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CHAPTER 1
1INTRODUCTION
1.11 INTRODUCTION
The strategic planning process is essential for success of an
organization. So achieving organization goal is very important for the
progress of an organization. This project will describe the strategic
planning process for constant achievement for JD Wetherspoon plc,
Baxter’s court, pub 185, London, E8 1HE.
“In general, businesses strategy exist to make a profit, i.e. when the
revenue from selling their goods and/or services exceeds the costs
of producing that output. In economic theory, the assumption made is
that a private sector business will seek to maximize its profits.”
Source: Harris (2001), Business Economics, Reed Press,
Oxford.
In the 1970's, many medium sizes organization adopted a formalized
top-down strategic planning model. Under this model, strategic planning
became a deliberate process in which top executives periodically would
formulate the JD Weatherspoon's strategy and then communicate it
down the organization for implementation.
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1.12 PURPOSE OF THE STUDY
A study of the strategic planning process to achieve organization
goal of JD Wetherspoon Plc, Baxter’s Court, Pub - 185, defining and
contrasting the marketing strategies to undertake the appropriate uses
in order to identify areas of improvement. This research used the action
research methodology to develop a new framework about how JD
Wetherspoon Plc, Baxter’s Court, Pub - 185 use the new strategic
planning process to achieve its goal. This structure is the first that
explores the issues within UK- based organizations JD Wetherspoon
Plc, Baxter’s Court, Pub - 185 in practical terms. The results show that
the competence level of all employees and the updated product
knowledge, on the job training and proper supervision is the main
factors to achieve its goal.
And I have chosen J D Wetherspoon plc. Pub 185 as my research project
because JDWetherspoon has become one of the most popular pub
chains in the UK, weekly welcoming millions of people for everything
from a quiet cup of coffee to a big Saturday night out. They have gone
from 70 to 740 pubs in under ten years.
The other purpose of the study is how we can overcome the present
recessionary climate in the pub sector in the Great Britain. At present
there are 52,500 in the Great Britain (BBPA). According to the
British Beer and Pub Association (BBPA)’s latest survey released on
04/02/2010, there are 39 pubs closing per week and in first half of 2009
it was 52 pubs per week. A total of 2,365 pubs closed in 2009 and jobs
lost 24,000 in this sector in 2009. Between July, 2009 to December,
2009 a total of 1,013 pubs closed down and 10,000 jobs lost in local
communities across the Great Britain.
In the national economy and community life, pubs make a significant
and valuable contribution to both. BBPA thinks the tax burden a key
issue to closures of the pubs.
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1.13 AIMS AND OBJECTIVES
1 AIMS
The aim of the research is to define JD Wetherspoon Plc, Baxter’s Court’s
(Pub 185), and influence to local market by using integrated the
strategic planning process for the continuous growth of profit .
2 OBJECTIVES
The objectives of the research are as follows:
1. Determine and strategic development of JD Wetherspoon
Plc, Baxter’s Court, pub - 185 local best markets for sales
and leads.
2. Track the trends of JD Wetherspoon Plc, Baxter’s Court, pub - 185
visitors to analyze the most effective marketing strategies for
pricing.
3. Modify JD Wetherspoon Plc, Baxter’s Court, pub - 185 marketing
solutions to take advantage of the customer's needs.
4. Run JD Wetherspoon Plc, Baxter’s Court, pub - 185 costs
and expenses with a variety of tools.
1.14 JDW’S COMMITMENT TO MEET THE RECESSION IN PUB SECTOR IN THE UK
All pub managers are responsible for delivering the best CQSMA
standards - that's cleanliness, quality, service,
maintenance and atmosphere. These are the five
cornerstones of the perfect J D Wetherspoon pub; they act as
the building blocks on which they assemble each welcoming pub
experience.
“Pubs across Britain are closing at a record rate. So how does JD
Wetherspoon feel confident enough to promise to open 250 new outlets
in the next five years?”
Source: James Thompson reports on The Independent 2 Dec, 09.
We’ll wether the Recession – Chain to create 10,000 jobs with 250
pubs. (Source: The sun 2 December, 09.)
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Wetherspoon to open 250 pubs, creating 10,000 jobs.
Source: The Guardian 2 December 09.
10,000 new pub jobs in pipeline
Source: Daily Star 2 December 09.
1.15 RESEARCH PROBLEMS
“Identifying a suitable research problem is one of the most important but a
difficult phase of research process. A research problem is exactly that a
problem that someone would like to research. A problem can be anything that
a person finds unsatisfactory or unsettling a difficulty of some sort, a state of
affairs that needs to be changed, anything that is not linking as well as it might
problems involve areas of concern to researchers, conditions they want to
improve, difficulties they want to eliminate, questions for which they seek
answers.”
Source: Kumar, R. (2008), Research Methodology,
APH Publishing, New Delhi.
Research problems:
1. What is strategy and why it is imperative for business objectives?
2. How top down strategic model can improves the performance of an
organization?
3. What is the present financial practice of JDW’s
financial strategies?
4. What is the consequence of strategies to achieve organization goal?
1.16 SITUATION ANALYSIS
Once JD Weatherspoon has specified its objectives, it begins with its current
situation to devise a strategic plan to reach those objectives. Changes in the
external environment often present new opportunities and new ways to reach
the objectives. An environmental scan is performed to identify the available
opportunities. The situation analysis therefore involves an analysis of both the
external and internal environment.
The external and internal analysis considers the situation within the firm itself,
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such as:
• Company culture
• Company image
• Organizational structure
• Access to natural resources
• Position on the experience curve
• Operational efficiency
• Operational capacity
• Brand awareness
• Market share
• Financial resources
1.17 RESEARCH STRUCTURE
1 CHAPTER 1
Chapter 1 This part includes background and rationale of the study. It also
includes aims and objectives, research questions and conceptual model.
2 CHAPTER 2
Chapter 2 Included l i te ra ture rev iew (strategy, strategy
objectives, performance management,management control,
balanced score card, budget.
3 CHAPTER 3
Chapter 3 This part is for research methods, that includes
research plan, policy, process working in this study, reasons of
employing the
method
.
4 CHAPTER 4
Chapter 4 Includes data presentation and analysis, that includes
Introduction, employee data, customers’ data, direct observation,
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discussion and findings.
5 CHAPTER 5
Chapter 5 This part is for interpretation and conclusion that includes
findings review and conclusion.
1.18 CONCLUSIONS
Chapter 1 includes the purpose of the study, and that includes
the present recessionary climatein the pub sector
in the UK, JDW’s commitment to meet the
recession in this sector in the UK. This chapter also includes aim, and
objective of the research, research question, and conceptual model,
fundamental of financial performance analysis and research structure.
CHAPTER 2
LITERATURE REVIEW
PART 1 CONCEPT
2.11 INTRODUCTION
In today's highly competitive business environment, budget-oriented
planning or planning methods are insufficient for a large corporation to
survive and prosper. The firm must engage in strategic planning that clearly
defines objectives and assesses both the internal and external situation to
formulate strategy, implement the strategy, evaluate the progress, and make
adjustments as necessary to stay on track.
This research project investigates the use of new strategy in businesses.
Academic literature is reviewed on the development of the marketing
theory in selling, the benefits and risks of individual sales proficiency etc.
Primary research is based on the study of a focus group using
questionnaires; secondary research is based on the literature review.
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Conclusions are made about the effectiveness of marketing specially up
selling strategy for JD Wetherspoon Plc, Baxter’s Court, Pub 185.
The characteristic of pub and food industries marketing is to attract its
local customers and enter into a relationship with its prospective regular,
non-regular and visitor customers. In addition to its existing marketing
strategies, new sales techniques may also include reducing
operational costs, increasing customer loyalty, partner or channel
development, and market analysis.
2.12 STRATEGY
‘Ninety percent of business still fails to execute their strategies
because their leaders do not understand how to break each strategy
down into groups of activities and sequences of events that drive
the company steadily toward its desired goal. Beyond that, managers
often fail to prioritize these activities, assign responsibility for them,
and decide on measures of their success.’
Source: Morgan, Levit, Malek (2008), Executing Your Strategy, HBS Press,
USA.
Strategy has been defined in many ways. For example, strategy has been
described as a pattern of decisions about the organization’s future
(Mintzberg, 1978) which takes on meaning when it is implemented
through the organization’s structure and processes (Miles and
Snow,
1978). Johnson (1987, pp. 4-5) stated that strategic decisions occur at
many levels of managerial activity. They are concerned with the long-
term direction of the organization, the scope of an organization’s
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activities, the matching of organizational activities to its environment and
resource capabilities, the allocation of major resources within the
organization, and consideration of the expectations and
values of the organization’s stakeholders.
Corporate strategy is concerned with decisions about the types of
businesses to operate in, including what businesses to acquire or divest,
and how best to structure and finance the company (Johnson and
Scholes, 1889, p. 9). It is concerned with the way resources are focused
to convert distinct competences into competitive advantage (Andrews,
1980, pp. 18-19). Business (or competitive) strategies relate to each
business unit of the organization and focus on how individual SBUs
(strategic business units) compete within their particular industries, and
the way that each SBU positions itself in relation to competitors.
1 STRATEGY FORMULATION AND IMPLEMENTATION
STRATEGY FORMULATION
Once a clear picture of the firm and its environment is in hand, specific
strategic alternatives can be developed. While different firms have
different alternatives depending on their situation, there also exist generic
strategies that can be applied across a wide range of firms. Michael Porter
identified cost leadership, differentiation, and focus as three generic
strategies that may be considered when defining strategic alternatives.
Porter advised against implementing a combination of these strategies for
a given product; rather, he argued that only one of the generic strategy
alternatives should be pursued.
IMPLEMENTATION
The strategy likely will be expressed in high-level conceptual terms and
priorities. For effective implementation, it needs to be translated into
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more detailed policies that can be understood at the functional level of the
organization. The expression of the strategy in terms of functional policies
also serves to highlight any practical issues that might not have been
visible at a higher level. The strategy should be translated into specific
policies for functional areas such as:
• Marketing
• Research and development
• Procurement
• Production
• Human resources
• Information systems
In addition to developing functional policies, the implementation phase
involves identifying the required resources and putting into place the
necessary organizational changes.
CONTROL
Once implemented, the results of the strategy need to be measured and
evaluated, with changes made as required to keep the plan on track.
Control systems should be developed and implemented to facilitate this
monitoring. Standards of performance are set, the actual performance
measured, and appropriate action taken to ensure success.
DYNAMIC AND CONTINUOUS PROCESS
The strategic management process is dynamic and
continuous. A change in one component can necessitate a
change in the entire strategy. As such, the process must be
repeated frequently in order to adapt the strategy to
environmental changes. Throughout the process JD
Weatherspoon may need to cycle back to a previous stage
and make adjustments.
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DRAWBACK OF THIS PROCESS
The strategic planning process outlined above is only one
approach to strategic management. It is best suited for
stable environments. A drawback of this top-down approach
is that it may not be responsive enough for rapidly changing
competitive environments. In times of change, some of the
more successful strategies emerge informally from lower
levels of the organization, where managers are closer to
customers on a day-to-day basis.
Another drawback is that this strategic planning model
assumes fairly accurate forecasting and does not take into
account unexpected events. In an uncertain world, long-term
forecasts cannot be relied upon with a high level of
confidence. In this respect, many firms have turned to
scenario planning as a tool for dealing with multiple
contingencies.
2.14 CUSTOMER SATISFACTION
Keno’s model of customer satisfaction distinguishes six categories of
quality attributes, from which the first three actually influence customer
satisfaction:
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Figure – 2.2
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1. Basis Factors (Dissatisfies. Must have) – The minimum
requirements which cause dissatisfaction if they are not fulfilled, but do
not cause customer satisfaction if they are fulfilled (or are exceeded). The
customer regards these as prerequisites and takes these for granted.
2. Excitement Factors (Satisfiers. Attractive) – The factors that
increase customer satisfaction if delivered but do not cause
dissatisfaction if they are not delivered. These factors surprise the
customer and generate ‘delight’. Using these factors, a company can
really distinguish itself from its competitors in a positive way.
3. The factors that cause satisfaction if the performance is
high, and they cause dissatisfaction if the performance is low. Here, the
attribute performance-overall satisfaction is linear and symmetric.
Typically these factors are directly connected to customers’ explicit
needs and desires and a company should try to be competitive here.
The additional three attributes which Kano mentions are:
4. Indifferent attributes. The customer does not care about this
feature.
5. Questionable attributes. It is unclear whether this attribute is
expected by the customer.
6. Reverse attributes. The reverse of this product feature
was expected by the customer.
Strategy maps in Appendix 2 describe how an organization can create
value: by connecting strategic objectives in explicit cause and effect
relationship with each other. Strategy Maps are a strategic part of the
balanced Scorecard framework to describe strategies for value creation.
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2.15 IMPORTANCE OF FINANCIAL PLANNING
‘Financial planning allocates a firm’s resources to achieve its
investment objectives. Financial planning is important for several
reasons.
a. Financial planning helps managers’ accesses the impact of a
particular strategy on their firm’s financial position, its cash
flows, its reported earnings, and its need for external financing.
b. By formulating financial plans, management is in a better
position to react to any changes in market conditions, such as
slower than expected sales, or unexpected problems, such as a
reduction in the supply of raw materials.
c. Creating a financial plan helps management understand
the trade-offs inherent in its investment and financial plans.
2.16 STRATEGIC PERFORMANCE MANAGEMENT
Performance management is a strategic approach for monitoring how a
business is performing. It describes the methodologies, metrics,
processes, systems and software which are used for monitoring and
managing the business performance of an enterprise. Business
Performance Management, and Strategic Performance management,
and Enterprise Performance Management, and
Corporate Performance Management are all variations of the
terminology.
Main benefits of perform management helps to
Maximize value creation consistently.
Increase corporate transparency.
Facilitates communication on strategy.
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Improves internal communication on strategy.
Facilitates the improvement of decision making.
Helps to balance short-term, middle-term and long-term
tradeoffs.
Encourages value-creating investments.
Improve the allocation of resources, streamlines planning
and budgeting.
Better deal with increased complexity and greater uncertainty
and risk.
2.17 WHY DOES BUSINESS NEED A BALANCED SCORED CARD?
An organization’s measurement system strongly affects the behaviour of
people both inside and outside the organization. If companies are to
survive and prosper in information age competition, they must use
measurement and measurement systems derived from their strategies
and capabilities. The balanced scorecard retains financial management
as a critical summary of managerial and business performance, but it
highlights a more general and integrated set of measurements that link
current customer, internal process, employee, and system performance
to long term financial success.
BALANCED SCORECARD
In 1992, an article by Robert Kaplan and David Norton entitled ‘The
balanced Scorecard – Measures that Drive Performance’ in the Harvard
Business Review caused a lot of attention for their method, and led
to their business strategies.
‘The balanced scorecard provides executives with a comprehensive
frame- work that translate a company’s vision and strategy into a 15 | P a g e
coherent set of performance measures. Many companies have adopted
mission statements
to communicate fundamental values and beliefs to all employees. The
mission statement addresses core beliefs and identifies target markets
and core products.’
Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press,
USA.
The Balanced Scorecard method of Kaplan and Norton is a
strategic approach, and performance management
system, that enables organizations to
translate a company’s vision and strategy into
implementation, working from 4 perspectives:
1. Financial perspective.
2. Customer perspective.
3. Business process perspective.
4. Learning and growth perspective.
This allows the monitoring of present performance, but the method also
tries to capture information about how well the organization is
positioned to perform in the future. The details are discussed in
Appendix 3.
2.18 CONCLUSION
Chapter 2 described literature review that is an important issue for
the research work. In this section we try to discuss about strategy,
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strategy objectives, p e r f o r m a n c e m a n a g e m e n t ,
m a n a g e m e n t c o n t r o l , b a l a n c e d score card. In this chapter we
are also analyse the information about the recent internal strategic
history of pub 185, current internal strategic report.
3 RESEARCH METHODOLOGIES
3.11 RESEARCH OBJECTIVES
‘The purpose of research is to discover answers to questions through
the application of scientific procedures. The main of the research is to
find out the truth which is hidden and which has not been discovered
as yet. Though each research study has its own purpose, we may think
of research objectives as falling into a number of following broad
groupings:
a. To gain familiarity with a phenomenon or to achieve new
insights into it.
b. To portray accurately the characteristics of a particular
individual, situation or a group.
c. To determine the frequency with which something occurs or
with which it is associated with something else.
3.12 RESEARCH METHODOLOGY
‘Typically, any discussion of research method is dichotomized
and presented in either a quantitative or a qualitative category
because the two paradigms have been assumed to be polar
opposites and, among some, even separate and distinct scientific
absolutes.’
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Source: Newman and Benz (1998), Qualitative – Quantitative Research Methodology, Congress Publishing,
USA.
Research methodology is the concept of processes (Sarantakos, 1998); it
is the system in which one creates logic of the thing of analysis. Robson
(2002) stated that, the academic, political and thoughtful surroundings to
societal study and their propositions for study practice, and for the use of
particular research methods. The largely common methodologies
in societal sciences and humanities research methodology are
quantitative and qualitative research. (Morvaridi, 2005)
The first stage of the action research project involved convergent
interviews to the management levels to get knowledge of the current
strategic approach. The focus groups were held to use group
dynamics to elicit understanding on the research problem and research
issues. Their information will be analysed through content analysis and
use as input into the next action research stage.
The final action research will examine secondary data and
observation on the success or failure of marketing strategy in selling.
Detailed analysis of past marketing strategy in pricing result is
controlled by the strategic marketing manager in his role within JD
Wetherspoon Plc; careful analysis of selling strategy failure will be
made.
3.13 RESEARCH PROCESSES WORKING IN THIS STUDY
1 INTERVIEW
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An interview is a purposeful discussion between two or more people
( Kahn and Cannel 1957).The use of interviews can help you to gather
valid and reliable data that relevant to my research question and
objectives. However, interviews may help to formulate the research
question and objectives. In reality, the research interview is a general
term for several types of interview .This includes structured interviews,
semi –structured interview and unstructured interviews , respondent
interviews and informant interviews this fact is significance since the
nature of any interview should be consistent with research questions
and objectives .
The interview is clearly and completely a communication among the
interviewer and interviewee matter within which together contestants
generate and build story forms of the societal area (Silverman, 1997).
Records for example the corporation’s annual statement will provide as a
balance to the interviews, so as to have entrance to established
and printed data that widens over an extended period of time. This data
is considered as secondary data.
2 SECONDARY DATA AND OBSERVATION
Secondary research and observation are research techniques those are
often implicit in the data- gathering approach’ and “observation is
something we cannot fail to do as people, we are all expert observers”
(Hackley, 2003). Furthermore, participant observation will be chosen as
“it puts the researcher where the action is” enabling them “to
experience the lives of informants , one optionis to observe consumers’
behavior and their conversations in an actual store Meiselman, 2000; ).
The objective through a survey is further common plus the
required responses are of a broader environment than by case
analysis (Creswell,
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2002). Surveys can together consist of prearranged interviews and
official questionnaires. Within this situation, equally official
questionnaires have been managed and a thoroughly interview survey
has been performed.
3.14 CAUSES FOR EMPLOYING THIS METHOD
A questionnaire-depend method can be a very well-organized process.
Information gathering and investigation are simpler and speedier than is
attainable through interviews. Conversely, it is able to acquire
quantitative information about consumers’ reaction about online
business (Bell, 1999). The success of the method based totally on the
feature of the questionnaire answers acquired. This sequentially
depends on the attentiveness, goodwill and stage of understanding of
respondents. Earlier the chance of individual get in touch with
respondents is fewer time- consuming for the researcher.
In contrast, interviews present a well-off basis of information, which
presents the researcher with thoroughly information how persons
observe a certain circumstances or incidence, information which may
not be available employing more quantitative methods or still
observations by way of slight or no contact. In isolation, they present
a nearby into the range of views, or to set up approaches so as to
structure hypotheses concerning the fundamental motivations of the
interviewee (Gilbert, 2002).
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3.15 LIMITATIONS OF THE STUDY
One of the major weaknesses of questionnaire is be short of deepness
and detail information. As soon as researcher distributes the
questionnaire via the post or e-mail, is the regularly small answer rate
(Bell, 1999). Wrongly
filled out questionnaires or still lost responses, will not provide the quality
of the information attained to complete research aims.
A further restriction of questionnaires can originate in the
constitution of the process itself. Questionnaires usually give unspecified
common information of the topic being examined and force the
respondent to response problems that he/she may be uninformed.
On the more realistic area, a large-scale study employing many of
interviews to get primary data can establish to be an expensive
and period-consuming matter. The disadvantage is that it presents huge
quantities of information to investigate, much of whose importance
and effectiveness is hard to recognize.
3.16 ETHICAL ISSUE OF RESEARCH
Consumers were firstly observed without interruption, allowing their
natural behaviour will be recorded. Only once they complete their actual
purchase decision, the researcher will approach them .Such a method
has a clear ethical advantage as consumers can choose to
decline to participate if they do not want to disclose information
regarding their purchase choice. When developing an understanding of
consumers’ behaviour, it is important to ask consumers why they are
carrying out a certain action. Indeed, some researchers maintain that
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the richest data come from informal conversation between the
researcher and the informants. Those shoppers who will picked up a
product to purchase were intercepted as they walk away from the
cabinet and will be asked to answer a few short questions regarding
their purchase choice.
CONCLUSIONS
Chapter 3 explained about research methods. It also explained the
research plan i.e. primary vs. secondary data, classification of research
data. It i s explained h o w t h e r e sea rch p rocessed i n t h i s
study and also explained the reasons for employing proper research
method, limitation of the study, and ethical issue of the research.
4 ANALYSIS OF THE FINDINGS
4.11 Findings and Analysis
PRIMARY DATA ANALYSIS
This part has divided into two parts, first part will be begun with the
findings from the manager’s interview, and the interview has conducted in
branch (Buxter court) of JD Weatherspoon in London through small
session. The interview has taken from two mangers (manager and
Assistant Manager) and also the author has taken interview from the area
manager see in Appendix 5.
According the question no 2 managers of JD Weatherspoon, it was the
biggest new product launched in JD Weatherspoon’s products. They have
also included the new Bistro line of “Bar quality” which contains of 23
products designed to appeal shoppers to drive them into the food court of
JD Weatherspoon.
According to question no 3, the above findings have showed that all the
three interviewees are agreed that new strategic development is the
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revolution in 21st century in terms of fulfilling customer’s needs and
desires and overall satisfaction. This study found form the secondary data
that J D Weatherspoon has been striving to crate values for customers
which lead to earn their lifetime loyalty. J D Weatherspoon believes its
success depends on the people, the people that work with them and shops
with them (Govin and Lacy, 2011). If J D Weatherspoon is able to provide
products and services according the consumers’ expectations then
consumers will go back to the superstore again and repeate purchase will
be done by the loyal customers.
The manager’s question no 5, clearly indicated that there are various
factors behind the new strategic development such as: to meet the
customer’s needs and wants which are dynamic in nature, new products
are been developed to ensure continuity of any business ventures through
making utilization of the idle and excess capacity thereby making better
profit.
The question no 7, Manager’s question result indicated that Price is major
factor to determine the success of new strategic development which leads
to customer satisfaction. He further added that determining price levels
and pricing policy affects revenues and consumer demand and thus
remains one of the most important elements in determining profitability
and market share.
SECONDARY DATA ANALYSIS
‘Any data which have been gathered earlier for some other purpose are
secondary data in the hands of researcher. In contrast those data
which are collected at first hand either by the researcher or by
someone else especially for the purpose of the study are known as
primary data.’
Source: Kumar, R. (2008), Research Methodology, APH Publishing, New
Delhi.
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JDW Record first-half profits, a successful refinancing and the
reinstatement of a dividend”
Highlights:
o Turnover up 4.1% to £488.1m (2009: £468.7m)
o Profit before tax up 41.4% to £36.2m (2009: £25.6m)
o Profit before tax before exceptional items* up 17.5%
to
£36.2m (2009: £30.8m)
o Free cash flow per share of 15.3p (2009: 28.2p)
o Total and special dividends per share of 19p (2009: 0p)
o 17 pubs opened; 2 closed; total now 746
Source: JDW Interim report on 11 Mach,
2010.
In 2009, the average number of people directly employed in JDW
was
20,357 and it was 19,703 in 2008. Of the full time equivalent
managerial
/ administration employee was 3,199. Full time hourly paid staff
was
8,353 and total (full time + part time) hourly employees were 17,158
and were 16,631 in 2008.
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The ordinary shareholdings at 26 July, 2009 was: number of
shareholders was 5,231 nos. and number of share issued 138,974,009,
and 69.73% of total shares held with over 1,000,000 nos. share
category.
The share price was 450.00p on 26 July, 2009 and 231.25p in 27
July,
2008
.
Year 31 July,05 31 July,06 31 July,07 31 July,08 31 July,09Revenue £m 809.9 847.5 888.5 907.5 955.1
Operating profit 71.5 83.6 91.1 90.5 97
Profit before tax 47.2 58.2 62 58.2 66.1
Table
4.11
Source: JDW Annual Report,
2009.
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5 PUB 185 SALES – FOOD – (FROM AUG, 09 TO FEB, 10)
The food sales for the period were £ 186,702 and budget for the
period was £ 170,611. Last year the sales for the same period were £
165,925. So
the pub achieved its forecasted food sales for the period.
6 PUB 185 GROSS PROFIT – (FROM AUG, 09 TO FEB, 10)
The gross profit for the period was £ 417,101 and budget for the
period was £ 378,906. Last year gross profit for the same period was £
359,917.
So the pub achieved its forecasted gross profit for the period.
7 PUB 185 PUB PROFIT - (FROM AUG, 09 TO FEB, 10)
The total pub profit for the period was £ 87,956 and budget for the
period was £ 64,455. Last year the pub profit for the same period was
£ 55,088.
So the pub achieved its forecasted pub profit for the period.
4.12 DIRECT OBSERVATION
Direct observation has chosen in this research to allow the researcher to
acquire the live observed experience to evaluate directly from his
personal
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observation and evaluating experience.
The researcher also visited the following local pubs to compare
the observation and the experience with pub 185.
o Marie Lloyd
o Old Ship
o The Cock
o The Globe
o The Railway
Traven
1 PRICE OBSERVATION
The price of all products in pub 185 is very cheap in compare to all
local pubs.
2 QUALITY OBSERVATION
The researcher’s own experience in compare with the said local pubs,
the quality of the products is very good in pub 185 and all products are
stored in a perfect temperature, which is a quality. But the all other local
pubs are not maintaining perfect temperature in all products.
3 SERVICE OBSERVATION
The service and presentation practice of the pub 185 is above
the standard.
4 CLEANLINESS OBSERVATION
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According to shopper’s report, he /she put 100% for cleanliness and
the researcher agree with the report as the pub is clean apart from
some exceptional situations.
5 OTHER OBSERVATION
The researcher’s own experience while working in pub 185 is that the
turnover of the staffs is very high here. And all the new staffs need on
the job training for the better performance of the working team. It is to
be noted that staffs are needed to be trained in updated product
knowledge.
4.13 SALES FORCE REPORTS
Sales force reports represent a rich and largely untapped potential
source of marketing information of JD Weatherspoon. Sales personnel
do generally not report valuable marketing information.
Sales personnel often lack the motivation and/or the means to
communicate key information to marketing managers
4.14 MISCILLENAOUS REPORTS
JD Weatherspoon sells a variety of distinct products to identical or
similar target markets. An analysis of the media habits conducted for
one product could be very useful for a different product that appeals to
the same target market. Again, this requires an efficient marketing
information system to ensure that those who need them can find the
relevant reports.
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4.17 CONCLUSIONS
This chapter showed the data presentation and its analysis. In above I
discussed about findings of the management interviews, observation
analysis and secondary data. Presentation of the findings shows rating
on strategy, quality, service, maintenance, atmosphere, price and
safety. Secondary data shows the JDW’s revenue, operating profit and
profit before tax (2005 to 2009).
Analysis of the findings chapter explained the analysis of direct
observation on strategy on price, quality, service, cleanliness and
others. Interview analysis focused on pub 185’s price of the product,
quality of the product, service practice, cleanliness, and recommending
necessary improvement of pub 185.
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Appendix 1:
Business strategy diagram analysis:
For any given objective there is normally a series of alternative
strategies which may be seen as being viable ways of achieving the
objective.
Business strategy
The
business
The
business
The
Strategic
market
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Figure 2.1
Types of strategy
Figure 2.1a
Source: Segal-Horn (1998), The Strategy Reader, Blackwell Publishing,
UK.
‘To take a perhaps over-simplistic example let us assume that your
objective is to get from your home in London to Your corporate
headquarters in Brussels. There are obvious, a number of alternative
strategies for achieving this objective. You could drive from London to
Dover, you could then pick up the ferry from Dover to Calais and drive
through France to Belgium and Brussels. You could take the Dover to
Zeebrugge or Ostend ferries and drive down from there. Alternatively,
you might decide to a train at London, travel through the Channel
Tunnel rail link direct to Brussels. You might decide to fly so you travel
from London through to Heathrow; Heathrow to Zaventem and from
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Zaventem to Brussels which may involve the use of trains or
taxies. You might even be one of those elite who have access to
company jet or helicopter. Whichever route you choose your preferred
strategy will probably be based on other aspects such as the time
available; the relatives desire to see other stops en route, the
convenience and timing of the schedules and so on.
Bringing the entire question back into the realm of business strategy,
the discussion and decision as an essential part of the process since it
clarifies top management’s views on the environment and the ways in
which it wishes its organization to operate. What is clear is that the
organization can, and ideally should, only choose one single
strategy to achieve its objective. Moving back to our travelling from
London to Brussels as an
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example, if there was to be a meeting and five different people had to
get Brussels, it they all took five different routes it would be most
unlikely that anybody would arrive at the same time and therefore the
meeting could not take place.’
Gill, J. and Jhonson, P. (1999) Research Methods for Managers , Paul Chapman, UK.
Appendix2:
Strategic map
Operational effectiveness v. Strategic planning
Figure – 2.2a
Source: Segal-Horn (1998), The Strategy Reader, Blackwell Publishing, UK.
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Figure – 2.3
Source: 12manage.com date accessed 25/01/2010, In the 2001 book ‘The Strategy-
focused Organization’, Kaplan and Norton transform their Balanced
Scorecard. In 1992 they introduced the Balanced Scorecard
in the Harvard Business Review as system to measure performance;
now they change it to a strategic management system. A lot of this
transformation was done by future emphasizing the so called strategy
map.
Appendix 3:
Balanced score card:
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Figure – 2.3a
Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press, USA.
FINANCIAL PERSPECTIVE
‘The BSC retains the financial perspective since financial measures
are valuable in summarizing the readily measurable economic
consequences of actions already taken. Financial performance
measures indicate whether a company’s strategy, implications, and
execution are contributing to bottm- line improvement. Financial
objectives typically relate to profitability – measured.’
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Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press,
USA.
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Kaplan and Norton do not disregard the traditional need for
financial data. Timely and accurate funding data will always be a
priority, and managers will make sure to provide it. In fact, there is often
more than sufficient handling andprocessingof financial
data. With the implementation of a corporate database,
it is hoped that more of the processing can be centralized and
automated. But the point is that the current emphasis on financial
issues leads to an unbalanced situation with regard to other
perspectives. There is perhaps a need to include additional financial
related data, such as risk management and cost benefit data, in this
category.
CUSTOMER PERSPECTIVE
Recent management philosophy has shown an increasing realization
of the importance of customer focus and customer satisfaction in any
company. These are called leading indicators: if customers are not
satisfied, they will eventually find other suppliers that will meet their
needs. Poor performance from this perspective is thus a leading
indicator of future decline. Even though the current financial picture
may seem (still) good. In developing metrics for satisfaction, customers
should be analyzed. In terms of kinds of customers, and of the kinds of
process for which we are providing a product or service to those
customer groups.
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‘In the customer perspective of the balanced scorecard, managers
identify the customer and market segments in which the business unit
will compete and the measures of the business unit’s performance
in these targeted segments. This perspective typically includes several
core or generic measures of the successful outcomes
from a well-formulated and implemented strategy.
The core outcome measures include
customer
Satisfaction, customer retention, new customer acquisition,
customer profitability, and market and account share in
target segments.’
Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press, USA.
BUSINESS PERSPECTIVE
This perspective refers to internal business process. Measurement
based on this perspective will show the managers how well their
business is running, and whether its products and services conform
to customer requirements. These matrixes have to carefully design by
those that know these processes most intimately. In addition to the
strategic management processes, two kinds of business processes may
be identified:
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ܞ Mission-oriented process. Many unique problems are
encountered in these processes.
ܞ Support processes. The support process is more repetitive
in nature, and hence easier to measure and to
benchmark. Generic measurement methods can be used.
‘In the internal-business-process perspective, executives identify the
critical internal processes in which the organization must excel. These
processes enable the business unit to:
¾ Deliver the value propositions that will attract and
retain customers in targeted market segments, and
¾ Satisfy shareholder expectations of excellent financial
returns.’
The internal business-process-value-chain perspective
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Figure – 2.3b
Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press, USA.
LEARNING AND GROWTH PERSPECTIVE
This perspective includes employee training and corporate cultural
attitude related to both individual and corporate self-improvement. In a
knowledge worker organization, people are the main resource. In
the current climate of rapid technological change, it is becoming
necessary for knowledge workers to learn continuously. Government
agencies often find themselves, unable to hire new technical workers
and at the same time are showing a decline in training of existing
employees. Kaplan and Norton emphasize that ‘learning’ is something
more than ‘training’; it is also includes things like mentors and tutors 40 | P a g e
within the organization, as well as that ease of communication among
workers that allows them to rapidly get help on a problem when it is
needed. It also includes technological tools such as an intranet.
‘The fourth perspective of the balanced scorecard, learning and growth,
identifies the infrastructure that the organization must build to create
long- term growth and improvement.’
Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press,
USA.
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MODEL OF BALANCED SCORE
CARD
The integration of these four perspectives into a one graphical
appealing picture has made the Balanced Scorecard method very
successful as a management methodology.
Figure – 2.4
Source: 12manage.com, date accessed:02/02/2010.
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Objectives, Measurements, Targets, and
initiatives
For each perspective of the Balanced Scorecard four things are
monitored:
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ܞ Objectives: major objectives to be achieved, for
example, profitable growth.
ܞ Measures: the observable parameters that will be used
to measure progresstoward reaching the
objectives. For example, the objective of
profitable growth might be measured by growth in net
margin.
ܞ Targets: the specific target values for the measures,
for example, 7% annual decline in manufacturing disruption.
ܞ Initiatives: projects or programs to be initiated in order
to meet the objective.
Appendix 4:
Strategy and
budgeting
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Figure – 2.4a
Source: Fabozzi and Drake (2009), Finances, Wiley Publishing, NJ.
1 CAPITAL BUDGET
‘Capital budgeting is a required managerial tool. One duty of a financial
manager is to choose investments with satisfactory cash flows and
rates of return. Therefore, a financial manager must be able to
decide whether or not an investment is worth undertaking and be able
to choose intelligently between two or more alternatives. To do
this, a sound procedure to evaluate, compare, and select projects is
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needed. This procedure is called capital budgeting.’
Source: Groppelli and Nikbakht (2006), Finance, Barrons Publishing,
NY.
STATISTIC BUDGET
Development of the statistics budget in the first step in budgeting.
It provides the basis for subsequent development of the revenue
and expense budgets. Together, these three budgets are sometimes
referred to as the operating budget.
The objective of the statistics budget is to provide measures of workload
or activity in each department or responsibility centre for the next
budget period.
3 EXPENSES BUDGET
With estimates of activity for individual departments developed
in the statistics budget, department managers can proceed to develop
expense budget for their areas of responsibility. Expense budgeting is
the area of budgeting ‘where the rubber meets the road.’ Management
cost control efforts are finally reflected in hard numbers that the
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department must live with – in most cases, for the budget period. Major
categories of expense budgets at the departmental level include payroll,
supplies and others.
4 REVENUE BUDGET
The revenue budget can be set effectively only after the expense
budget and the statistics budget have been developed. Revenues must
be set at levels that cover all associated expenses, plus provide a
return oninvested capital. This is a fundamental rule of finance and is
equally valid for voluntary, not-for-profit firms and investor-owned firms.
5 CASH BUDGET
The cash budget is management’s best indicator of the
organization’s expected short-run solvency. It translates all the previous
budgets into a statement of cash inflows and outflows. The cash budget
is usually broken down by period, such as months or quarters, within
the total budget period.
Appendix 5:
Question 1: Describe briefly about the strategic planning of JD?
The above question was asking two of interviewees but there was
separate session for area manager because he was not able to come at
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10.30 a.m. on 15th Feb 2011 but he kept his promise and given interview
at 4.0 p.m. in the same day.
Interviewee 1: He told in details that J D Weatherspoon has launched its
£1bn for development strategy in July 2019. According to him it was the
biggest strategy launched in J D Weatherspoon’s products. The new
product strategy has range expanded by 150 lines to 1,141 products.
They have also included the new Bistro line of “pub-quality food” which
contains of 23 products designed to appeal shoppers to drive them into
the food court of J D Weatherspoon. According to Hall and Wallop, (2010)
the J D Weatherspoon has launched biggest new strategic development
program and they have accepted to sales around £1bn per annum. They
have also stated that, all the new products were in Smart Price budget
and it has been categories in different segment which are: Premium Extra
Special range, the medium range and the standard range.
Interviewee Two: Assistant store manager was agreed with the store
manager but he mentioned that every thing has been managing under the
guidance of the main office, especially new strategic development.
Question 2
How successful was this product strategy from an overall
satisfaction of the customers?
According to interviewee 1, the concept of new product plays important
role gain customer satisfaction. He told that, their £1bn re-launched new
strategic development was very successful in order to meet customers’
demands. He mentioned that November last year their store has made
survey and found that 81% of the respondents were satisfied because of
number of new products in the store with very competitive price. This
finding is consistent with previous findings by Sukumar, (2009), he found
that the success of any commercial enterprise is depending on how they
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are fulfilling customer’s wants, needs and expectations. Customers are
not only buying products and they are only income source for the and one
of the biggest reason was new strategic development in accordance with
customer’s demands.
Interviewee 2: He further added that he was the one responsible behind
the survey and the result was very positive towards the relationship
between new strategic development and customer satisfaction.
Question 3: How successful was this new strategy from an overall
profitability standpoint?
Interviewee 1: He stated that the new strategic development is one of five
focus of J D Weatherspoon since September 2011 and the company has
targeted £1billion profit per annum from new products. He mentioned that
the year of 2010 was most successful profitable year despite difficult
economic downturn, the J D Weatherspoon’s profit was able to record
102.4% increase in net profits and the increase in profitability signifies the
cautious cost management and new strategic development. He added
that the new venture of new strategic development program has
contributed 11.5% in total profit.
Interviewee 2: he further added with agreed with interviewee 2 that traffic
of the store has been increased since J D Weatherspoon launched £1billion
new strategic development program. This store has 211 new products but
now it has increased more than 800 products in Ilford branch.
Question 4
When compared to your competitors, what was the level of
capabilities available to improve the manufacturing process for
the existing strategy?
Interviewee 1: He believe that the importance of competitive advantage
of any organisation is very important to maintain sustain business in the 49 | P a g e
21st century. Hence, J D Weatherspoon has own team to monitor
development strategy of the sub-contractor and maintain Total Quality
Management to maintain superior quality in accordance with customer’s
demand. He further added that, he was in training for three month in the
strategic development team to know how J D Weatherspoon is very keen
to have competitive advantages over the competitors and when the
author had asked him to describe a little further about the procedures of
the new strategic development. He described that, the first step of new
strategic development requires gathering ideas to be evaluated as
potential product options, followed by idea screening, concept
development and testing, market analysis, test marketing and finally
commercialisation.
Interviewee 2: He also told same thing
Question 5: What are the factors behind the strategic
development?
Interviewee 1: he says, there are various factors behind the strategic
development such as: to meet the customer’s needs and wants which are
dynamic in nature, Companies develops in order to explore the
opportunity that is available to them, new strategy are developed so as to
tight competitors in the market, new products are been developed to
ensure continuity of any business ventures through making utilization of
the idle and excess capacity thereby making better profit, new strategic
development increases the total sales volume of the firm and it also
increases its market share. Hence, he added that, J D Weatherspoon has
been successfully achieving reasons behind the new strategic
development.
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Interviewee 2: he further added that, to meet customer’s demand and
bring them into the store to purchase the products. Finally, the one of key
driver behind the strategic development is total customers’ satisfaction
because it leads to profitability.
Question 6: How do you assess and measure the perception and
satisfaction levels of your customers?
Interviewee 1: there are various firms adopting very seriously customer’s
focused strategy to achieve 360-degree view of the customer and it is
ambitious goal to achieve. J D Weatherspoon has been assessing and
measuring regularly the perception and satisfaction levels of the
customer. J D Weatherspoon has conducting a forum where customer can
view their opinions, suggestions and the company has changing the
operations in accordance with customer feedback.
Interviewee 2: as mention in question no 1, the store conducing regularly
survey in order to determine customer perception and satisfaction levels
of the customers and then the special team helps to assess and measures
the levels of the perception and satisfaction of the customers.
Question 7
What is the target retail price and how have you determine it?
Interviewee 1: he emphasised on the price and Price is major factor to
determine the success of new strategic development which leads to
customer satisfaction. He further added that determining price levels and
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pricing policy affects revenues and consumer demand and thus remains
one of the most important elements in determining profitability and
market share. Part of the pricing process involves the anticipation of
competitive reactions to price changes and its economic effects on supply
and demand. However, the mentioned various factors behind the target
retail price such as economic conditions, customer’s segments, costs of
the products and profitability.
Interviewee 2: There was no further added by interviewee 2.
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