MANAGEMENT 48: DEVELOPMENTAL STUDY

ESTABLISHMENT: Bon Appetea

REVIEW ON RELATED LITERATURE
The milk tea craze continues to grow in the Philippines, as a result of the rapid expansion of
kiosks selling milk tea. These include brands such as Gong Cha and Cha Time. These outlets
have reinvigorated the market and are capturing students and young professionals as their
consumer base. ue to the introduction of these chained foodservice outlets, !ilipino
consumers are being exposed to more tea "avors and variants, further increasing the
sophistication of the market.
#on $ppetea recently entered the market in umaguete City $ugust %&'(, and is performing
as one of the key players in their given industry. #on $ppeatea o)ers its customers a wide
variety of tea*based drinks to choose from. Customers will also be able to choose the base
teas such as +asmine Green Tea, $ssam #lack Tea, and toppings such as tapioca pearls,
coconut ,ellies, egg puddings and many more.
$s an business, asside from developing kiosks-stalls, #on $ppetea is looking into developing
and putting up full*sized dine*in stores. These stores will be o)ering a wider array of drinks
and toppings to choose from. These store will also be o)ering food to complement its
existing beverage lines.
!or the past months ./ovember %&'( and still ongoing0, a group of students have decided to
make #on $ppetea the focus their developmental study. This study aims to provide a given
organization a set of recommendations which could possibly help them do better or improve
on their current position.
#ased on the observations made by the researchers, they have come up in using three
di)erent management and marketing models as their guide to properly lay out their ideas
and come out with their modest recommendations for their chosen organization. These are
the following1
'. Porter2s !ive !orces $nalysis
%. 3arket*driven 4rganization
(. $nso)2s Product-3arket 5xpansion Grid
The following is the detailed discussion of the mentioned models-methods1
PORTERS FIVE FORES ANALYSIS
This model will speci6cally be used to discuss the current position of the milk tea industry
itself, within umaguete City and partly, including its present condition in the country.
The Porter7s !ive !orces tool is a simple but powerful tool for understanding where power lies
in a business situation. This is useful, because it helps in understanding both the strength of
the current competitive position, and the strength of a position where the organization is
considering moving into.
8ith a clear understanding of where power lies, an organization can take fair advantage of a
situation of strength, improve a situation of weakness, and avoid taking wrong steps. This
makes it an important part of their planning toolkit.
Conventionally, the tool is used to identify whether new products, services or businesses
have the potential to be pro6table. 9owever it can be very illuminating when used to
understand the balance of power in other situations.
!ive !orces $nalysis assumes that there are 6ve important forces that determine competitive
power in a business situation. These are1
S!pp"#e$ Po%e$: 9ere the organization assesses how easy it is for suppliers to drive up
prices. This is driven by the number of suppliers of each key input, the uni:ueness of their
product or service, their strength and control over you, the cost of switching from one to
another, and so on. The fewer the supplier choices a business have, and the more they need
suppliers7 help, the more powerful the suppliers are.
B!&e$ Po%e$: 9ere the business asks how easy it is for buyers to drive prices down. $gain,
this is driven by the number of buyers, the importance of each individual buyer to the
business, the cost to them of switching from their 6rst choice of products and services to
those of someone else, and so on. ;f a business deals with few, powerful buyers, then these
customers are often able to dictate terms to the business itself.
o'pet#t#(e R#(a"$&: 8hat is important here is the number and capability of the existing
competitors. ;f a business has many competitors, and they o)er e:ually attractive products
and services, then the business will most likely have little power in the situation, because
suppliers and buyers will go elsewhere if they don7t get a good deal from them. 4n the other
hand, if no*one else can do what that organization does, then it can often have tremendous
strength.
T)$eat o* S!+,t#t!t#on: This is a)ected by the ability of the business2 existing customers
to 6nd a di)erent way of doing what the business does < for example, if a business supplies
a uni:ue software product that automates an important process, people may substitute by
doing the process manually or by outsourcing it. ;f substitution is easy and substitution is
viable, then this weakens organization2s power.
T)$eat o* Ne% Ent$&: Power is also a)ected by the ability of people to enter the market. ;f
it costs little in time or money to enter the market and compete e)ectively, if there are few
economies of scale in place, or if an existing business has little protection for their key
technologies, then new competitors can :uickly enter its market and weaken its position. ;f a
business has a strong and durable barriers to entry, then it can preserve a favorable position
and take fair advantage of it.
The following 6gure illustrates how the 6ve forces designed by Porter relate to one another.
Porter7s !ive !orces $nalysis is an important tool for assessing the potential for pro6tability in
an industry. 8ith a little adaptation, it is also useful as a way of assessing the balance of
power in more general situations.
#y thinking about how each force a)ects an organization, and by identifying the strength
and direction of each force, an organization can :uickly assess the strength of their position
and their ability to make a sustained pro6t in the industry.
;n this way, the organization can then look at how they can a)ect each of the forces to move
the balance of power more in their favor.
So!$-e,:
Porter, 3.5. .'==>0. Competitive ?trategy1 Techni:ues for analyzing industries and
competitors .'
st
ed.0. /ew @ork1 !ree Press.
Porter2s !ive !orces $nalysis. .n.d.0 Aetrieved from
http1--www.mindtools.com-pages-article-newT3CB&>.htmCsthash.//p8br$o.
dpuftftgy on +anuary '(, %&'(
ANSOFF MATRI. /PRODUT0MAR1ET E.PANSION GRID2
5very business owner wants to grow their business but it is often diDcult to determine the
best way forward. The product-market grid of ;gor $nso) is a model that has proven to be
very useful in business unit strategy processes to determine business growth opportunities.
The product-market grid has two dimensions1 products and markets. 4ver these %
dimensions, four growth strategies can be formed1 3arket Penetration, 3arket evelopment,
Product evelopment, and iversi6cation.

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Market Penetration (selling more o t!e same t!ings to more o t!e same
"#stomers$
3arket penetration normally focus on changing incidental clients to regular
clients, and regular client into heavy clients. Typical systems are volume
discounts, bonus cards and customer relationship management.
Market De%elo&ment (selling more o t!e same t!ings to 'i(erent
"#stomers$
This strategy often try to lure clients away from competitors or introduce
existing products in foreign markets or introduce new brand names in a
market.
Pro'#"t De%elo&ment (selling ne) &ro'#"ts or ser%i"es to t!e same
"#stomers$
8ith this strategy, it often try to sell other products to .regular0 clients. This
can be accessories, add*ons, or completely new products. 4ften existing
communication channels are leveraged.
Di%ersi*"ation (selling ne) &ro'#"ts or ser%i"es to 'i(erent "#stomers$
Company strategies based on diversi6cation are the most risky type of
strategies. 4ften there is a credibility focus in the communication to explain
why the company enters new markets with new products. This Eth :uadrant
.diversi6cation0 of the product-market grid can be further split up in four
types1
9orizontal diversi6cation .new product, current market0
Fertical diversi6cation .move into 6rms supplier7s or customer7s
business0
Concentric diversi6cation .new product closely related to current
product in new market0
Conglomerate diversi6cation .new product in new market0.
Gsing $nso)2s matrix, business owners can evaluate each of the growth strategies in turn to
assess which is likely to result in the best possible return.
So!$-e,:
Product/Market Grid..n.d.0 Aetrieved from http://vectorstudy.com/management-
theories/product-market-grid on January 13, %&'(.
Ansof Matrix. .n.d.0 Aetrieved from http://www.hjmbd.ie/use-ansoffs-matrix-to-identify-your-
growth-strategy on January 13, %&'(
MAR1ET8DRIVEN ANALYSIS MODEL
#eing a franchise in nature, one of the constraints that #on $ppetea is facing is the fact that
they have no power to decide on the products and services they can o)er to the market.
8ith this in mind, the researchers have agreed that 3arket*riven $nalysis 3odel can be
used as a good framework to appropriately discuss their ideas while considering the
limitations of organization itself.
This model shows the multi*disciplinary process of translating a corporate strtegy into a
marketing and sales policy and the client*related activities that are integral to the process.
The marketing and sales plan of an organization derive from corporate strategy. The plan
needsto be measurable in terms of speci6c activities and behavior of all employees, whether
they are focused on customers within organization, or are more outward*facing. The label
market*driven impliesthat the customer is the central point of focus in the organization, and
that all activities and systems are designed from a customer2s perspective. Gsing the
market*driven organization framework ensures that all processes in the organization are
aligned with corporate goals.
This model is perfect when evaluating a company2s marketing and sales e)ectiveness and
eDciency. ;t can be applied to two speci6c situations, ach with its own :uestions1
E3e-t#(ene,, o* t)e ope$at#on:
?pecify or evaluate the marketing and sales policy by asking1
?egmentation of the market1 8hich customers should we focus onH
i)erentiation of the proposition1 9ow should we approach this customersH
Target*setting1 8hat levels of sales, revenues, or market share should we strive forH
E9-#en-& o* t)e ope$at#on
4rganize or evaluate both the front and back oDce by considering 1
Iowering costs1 9ow can we improve the eDciency of the marketing and sales
departmentH
#uilding synergies1 what can we do to improve co*operation betweens department so
that we focus more e)ectivly on the resultsH
#alancing market-sales and operations1 how can we deliver tailor*made products in
the front oDce withour negatively a)ecting e)ectively in the back oDceH
;n order to plan for appropriate marketing, sales and other supporting activities, it is
necessary to decided upon1
3arket ?egmentation1 markets in which the company has tobe active.
Customer !ocus1 which customers are most relevant in each marketJ and
Company Targets1 which goals the company wants to achieve in each market
segment.
The optimal marketing mix will combine clear knowledge of the speci6c needs of the chosen
market segments with a deep understanding of customer2s priorities and the criteria that
in"uence their buying decisions.
?ources1
Kotler, P. .%&&&0. Marketing Management: The millenium edition (10
th
ed.). /ew @ork1
Prentice 9all.
$ssen, 3.F., en #erg, G.F. et. al. .%&&=0 e! Management Model: The "0# models e$er!
manager needs to kno% (&
nd
ed.). Great #ritain1 $shford Colour Press Itd.