Good Company History Case Study Example
Management case study
1. Company History and market opportunity
Calveta Dining service started as restaurant specializing in traditional meals that enticed the aged people due the nutritious and originality of the food. Since its inception in 1966, the restaurant had maintained a steady market growth under the leadership of Antonio Calveta and currently run by Frank; Antonio’s eldest son. The restaurant expanded its operations in 1972 in residents at the serving self-living facilities (SLF) whose taste and preference are characterized by quality food and affordability. The company employs approximately more than 15000 people who undertake various operation and service functions across the 976 Self Living Facilities (SLF) chains. Antonio’s innovative approach was on developing a competent team of workers and invests a customer oriented product and services improvement. Outstandingly, Antonio and his management created a strong rapport with the SLF residents by embracing a customized menu development to suit the residents’ tastes and preferences.
Despite fierce competition in the Senior Living Facilities target market, the company has managed to withstand pressure and succeeded to record a remarkable revenue of $2billion clinching a distant fourth behind Culinair, Robertson and Pine Hurst. With a market dominance of 976 clients, the company’s strategic plan can capture the target market of more than 900 nursing homes as a generic strategic approach to reinforce the intense competitive rivalry from other market players. Concentration on serving Self Living Facilities (SLF) is a sustainable strategy considering the projected increase of elderly population to 72 million by 2030.
2. General environment
The United States boasts of a stable political environment that entices foreign and local companies to diversify their investment resources.
Economically, America ranks as the best economic hub in the world due to possession of enormous resources and flexible policies that support foreign and local investors. With a stable increase in Gross Domestic Product (GDP), Calveta incorporation can easily advance their profitability growth.
The Census Bureau of Statistics asserted that elderly population would continue to rise in the ensuing years and subsequently lead to an increase in Self Living Facilities (SLF).Further the society has gained conscious of health issues especially the organic food. Hence, the company would require staying abreast with the market developments.
The United States has a strong technological background that could enhance research and development to improve product quality and market-oriented service delivery.
The global awareness of recycling and use of biodegradable inputs is a relevant corporate citizenship to the Calveta management. For instance, use of palm oil for cooking as an alternative for normal cooking fat would enhance quality products and protect the environment.
3. Primary competitor, and how the company against these competitors.
The major primary competitors are Culinary Pinehurst and Robertson, who not only specialized in serving SLF community, but ventures in a diversification strategy to other sectors such as sports and education target market as a tactical approach to expanding the pool of risk. Based on Antonio’s core strategies, the company applies a customized program dubbed “At youth service” that allow customers to provide customized menus as well as negotiating for low priced foods. Further, the company creates a value chain approach that links the firm with quality suppliers for ingredients.
4. Use five force model (supplier, entrance, competitor customer and subtraction) to assess it is attractive or unattractive
The Porters five force model is a framework that evaluates a company’s capability to sustain a long-term market advantage over competition firms in the industry.
Bargaining power of suppliers
The Calveta Company has succeeded in maintaining the bargaining power of suppliers at low level by creating a value-chain based system that holds close interaction with input suppliers under flexible terms and affordable payments.
Bargaining power of consumers
The bargaining power of SLF target market is very high due the increased global awareness campaigns on health and nutrition. The unpredictable variation in consumer change in tastes and preference require the company to maintain a continuous process of product improvement and service delivery.
Threat of new entrants
Frank expresses his worry that growing competition from new entrants due the sectors projected growth could deprive the firm a wide market base and revenue. New entrants could focus on differentiation to capture the vast market of self-Living facilities clients.
Threat of substitutes
A Threat from substitutes is at a low level since the target market of aging population values indigenous foods that provide nutritious elements as compared to spicy meals sold at fast food restaurants.
Intense competitive rivalry
Internal competition level from existing firms such as Culinair is high thus product innovation based on customer demands would boost sustainability.
5. SWOT analysis (strength, weakness, opportunity and threats)
Calveta incorporation has a strong brand identity entrenched in the minds of its clients and the wider market. Further, continued product and service innovation in response to market and consumer changes is strength to the firm. The management conducts periodical training to the employees to upgrade their skills and boost their motivation.
One of the major weaknesses is the frequent change of organization structure where clients have persistently complained of incoherence in interacting with the firm management. Further, the company suffers from the unpredictable changes in health nutrition for indigenous foods.
The company has an opportunity for expanding the target market as the United States Census bureau project an increase in elderly population to 72 million by 2030. Through product differentiation, the company can expand the market base and increased revenue.
Calveta faces an external threat from existing companies as well as infiltration of new entrants in the same industry especially in the Self living facilities (SLF). However, the company can withstand the competitive forces by investing extra resources in research to boost innovation in product and service delivery to the customers.
8. Does the company have a clear business-level strategy? Does the firm’s strategy seem to be working?
Based on the firm’s continuous growth and innovation strategy, the company’s business level strategy is yielding progress. Frank inherited Antonio’s focus business level strategy by focusing on differentiated products and low costs products and services. Focus business level strategy emphasizes in producing customer –oriented products and services under low cost than competitors. In summary, if the company maintains market-oriented approach and innovation, it would serve a market base and retain consumer loyalty.
What should the focal company do?
Calveta company should consider expanding its market operations and capture the unserved market capacity of more than 1000 Self Living Facilities (SLF) as well as seize the projected expansion of the target market to 72 million by the year 2030.To remain abreast with market and consumer changes the management should undertake intense research to enhance product and service distinction and reinforce sustainable competitive advantage.
A potential market strategy would be to develop long-term contracts with the SLFs in order to raise the entry barrier for potential entrants and deter diversification strategy from existing market players.
What are the main reasons for your recommendations for what the company should do?
The company’s expansion strategy will increase revenue and incur economic benefits from economies of scale. Further, conducting periodic research on market change reinforces the firm’s operation strategy thus boosting innovation and product differentiation. Finally the tactical approach to form contractual agreements with the clients shields the company from forces of competition from market rivals.
What are the financial performance implications for your recommendations?
The project requires additional investment in establishing new restaurants, employ workers and conduct market research on market and consumer change as a tactical approach to withstand market forces.