Good Porcini’s Pronto Case Study Example

In the world of globalisation and constant competition, business needs to be very careful and thoughtful about its strategy and potential for expansion. Often business strategy and its influential factors need to be analysed from different perspectives in order to realise their potential. The aim of this paper is to analyse the case of Porcini’s Pronto in the framework of a 5-forces analysis, a Diamond-E strategic analysis, in order to suggest core competencies and HR practices the business will need to develop.
First of all, it needs to be outlined that Porcini’s Pronto main idea is to create a chain of fast-food restaurants of Italian cuisine. In this regard, this concept is an extension of Porcini’s network of qualified full-service restaurants. This extension concept is aimed at expanding company to new markets within the country rather than expanding globally, which would be too expensive. Placing this discourse into 5-forces analysis, it should be outlined that in industrial rivalry, the competition in the fast-food market is very high. There are brands like McDonalds and Burger King, not to mention various world cuisine fast foods that are famous for their products and particular specialisation in fast food branding. In this regard, in order to compete with fast-food titans the concept will need to invest in innovations and creation of a product that would appeal to the same needs to target marked demand yet would be different from competitors’ brands. In this regard, by advertising Porcini’s Pronto products on big boards along the highway, online and TV ads, company can attract the target audience. The main competitive power of the new product would be appealing to its healthy and home-made nature like famous Porcini full-menu restaurants but faster for people on the move. In other words, the new concept can use the popularity of the main chain Porcini restaurants in order to attract clientele. Thus rivalry is high in this sector.
Regarding other four elements of 5-forces analysis, they are analysed below. Concerning the threat of new entrants in this industry it is very high, because the sector of fast food is very popular and profitable, that is why new entrants would want to enter it.
The potential barriers would not be in barriers to entering the market, would not be government or policy related but the matters of product differentiation (in contrast to other competitors), brand equity in the new target market. In this regard, attention of the brand will have to orient towards requirements of fast food environment – speed, low cost and quality. Regarding the third threat of substitution of products with competitor’s equivalent, it is very high because there is high competition and diversification of products in fast food market. Consequently, the concept needs to appeal to another aspect of its product or service, which is not present in competitors. In other words, the product differentiation is crucial. In this case, the best appeal company can make to the fast-food customers is that Porcini’s Pronto is a healthy, home-made option on the fast-food market. For a relatively small price, customers would be able to get a fraction of Porcini restaurant experience and menu on their way. Another crucial factor is the location of Porcini’s Pronto on the exits of highways, which would make them more attractive to travellers and easier to access; this would give an extra advantage in contrast to competitors because it would be a rationale choice of traveller to go to eat somewhere near, fast, healthy and low-cost. The new chain of fast-food facilities located in shopping malls would not survive severe competition of shopping malls.
The fourth threat is buyers’ bargaining power, which is quite high, because there are many alternatives on the fast food market and the cheapest will have the greatest demand among customers. On the other hand, the company can decrease this threat by applying the following measure. It should be outlined that taking into account the ratio of customers’ concentration in contrast to company’s facilities ratio, the location of restaurants on the highway exits overrules this concern, making the concept more advantageous. In this regard, the number of travellers on highways is immense, and people do need to eat, and they know the brand of Porcini already. Concerning customer’s price sensitivity, the costs will have to be decreased to the point of making the product affordable to ordinary travellers, and not the traditional clientele of Porcini Finally, the fifth threat is the bargaining power of suppliers. The company can rely on its existing diversified supplies network that it uses for the main chain Porcini restaurants, placing emphasis on purchasing less sophisticated and easier in use ingredients. Consequently, the bargaining power of suppliers will be relatively low since they have an established network of suppliers and if suppliers decide to bargain, the company can easily switch to other suppliers because there are more fast food suppliers than those for high-level restaurants.
According to the Diamond-E model, the correlation between management preferences, organisation, resources, the final strategy and environment need to be analysed. With the regard to managerial preferences, the main rationale of this project is to expand business to a new segment of a market. Since the expansion abroad is not an option, a new aspect of the local market, meaning fast food was chosen. In this regard, managerial concerns would be final profit, cost-efficiency, time of results and preservation of brand’s quality. Referring to the component of organisation, in order to preserve the level of quality of the brand and fulfil managerial preferences, most likely the organisation of the new concept would be based on company own-and-operate approach instead of syndicates and franchising. In other words, the existing Porcini organisational structure will have to incorporate new bodies in order to support the development of new facilities. Regarding capabilities and resources, the fact that the company has already established its famous brand in the field of catering, gives a profound resources and qualifications basis for the new chain of restaurants. According to a company-owned approach, it would be more expensive and long-term than two other options, but it would secure quality and correspondence to company’s standards. Finally, the chosen strategy is in facilitating all these factors and requirements of the external environment, meaning the totality of competition in the industry, desires of customers, policy and economic criteria. Thus, from all mentioned above it can be summed up that Porcini’s Pronto strategy is to expand into the local fast food market by targeting travelling customers on interstate highways, offering them reasonably-priced, good quality dishes with a table service. The goal is to remain on the level of industrial average and not grow any further.
In accordance with the posed strategy, the company will have to develop certain core competencies and consequent HR practices. In this regard, the core competencies of Porcini Pronto should be good quality food, prompt service, good money value and accessibility. In order to preserve a good quality of food, the standards would have to correspond to the recipes of the main brand, although with a simpler menu and fewer sophisticated ingredients than in the main chain. Food will have to be made from fresh products and presented according to restaurant standards. On the other hand, although table service like in a restaurant is a crucial element of the strategy, it has to be fast and efficient rather than relaxing and comforting like in the main chain restaurants. In order to achieve the good value for money, the new brand needs to correspond to the standards of the main Porcini, but has to give a glimpse of what the experience of dining in the main chain restaurant would be. In this regard, money value is for paying less for less sophisticated but still good quality product of Porcini production. Finally, the location of diners on the highway exits is great idea; however, it should be secured that facilities are located on the right-hand side on the way of cars exiting the highway, so that customers did not have to make extra circles and changing direction in order to visit Porcini Pronto restaurants.
Finally, in order to correspond to the posed strategy and core competencies, HR practices will need to include the following suggestions. First of all, the company will have to hire young, dynamic people who could work flexible shifts, preferable from the nearby towns, so that they could come to work at first notice. Regarding candidates’ qualifications, previous catering experience would be required, but not as sophisticated as in the case of Porcini main chain. The HR department will have to develop quality training guidelines corresponding to the posed objectives of the new brand and company’s strategy. The HR will have to monitor training programmes and the implementation of standards in the service. In order to secure employees’ efficiency and rapid service, introduction of IT technologies and consequent training for employees would be required. Otherwise, the HR department will have to carry on with usual duties of salaries, pension schemes and compensation payments.