Construct a space matrix for the pizza business

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Reference no: EM133216896

Assignment:

STRATEGIC PLANNING AT D & D ELECTRONICS LTD

Mr. Mukasa and Mr. Econyu own a modern eatery (Meco Eats Cottage Ltd) housed in Metropole house along Entebbe road in Kampala city. The company has four business lines: pizza, confectionary products, non-alcoholic beverages and Fried Chicken. The pizza products are the highest revenue generating business unit. It replaced the sales of non-alcoholic beverages that used to generate the highest revenue but had stagnated due to the many new shops opened around the city. The market for pizza has continued to grow with the increasing size of the middle class in Uganda and the future looks bright.

The confectionery business is the oldest business but whose market has declined due to the sugar concentration in the products as well as its association with "junk foodies". The Fried Chicken Business is the most recent business line to be introduced by Meco Eats Cottage Ltd and is only six months old. However, the market for Fried Chicken has been growing steadily over the years attracting such large layers as KFC. However, due to its newness Meco Eats Cottage Ltd market share in this sector is still very small.

Meco Eats Cottage Ltd has the challenge to compete favourable in each of its business lines and choose the most relevant strategy for each business. The pizza business enjoys considerable strategic position in its external environment. In this environment its greatest industry strength is the huge growth potential (rated at 5 out of 6), followed by two factors, that is, its huge financial resources and mastery of the pizza preparation technical know-how (each rate at 4 out of 6). Its last industry strength is the relative difficulty in entering the business as many Ugandans lack the required knowledge to prepare pizza and operate a pizzeria (rated at 3 out of 6).

The pizza business unit's environmental strength consists of (i) availability of machinery for preparing pizza (rated at -1 out of -6), (ii) Transportation costs when delivering pizza (rated at -2 out of -6), (iii) rate of inflation that affects the price of imported inputs is also rated at -2 out of -6 and (iv) price variability (rated at -6 out of -6).

The internal environment of the pizza business unit at Meco Eats Cottage Ltd is also characterized by a number of factors. In relation to Financial Strength, Meco Eats Cottage Ltd best strength is its high level of liquidity that is also matches with its level of Cash flows (each rated at 4 out of 6). It enjoys positive Return on Investment (rate at 3 out of 6) and considerable working capital levels (rated at 2 out of 6). In the same internal environment, the pizza business enjoys Competitive Advantage in terms of high level of product quality (rated at -1 out of -6), considerable market share (rated at -2 out of -6), fair brand image (rated at -3 out of 6) and relatively poor control over suppliers and distributors (rate at -5 out of -6).

Required:

With specific reference to the BCG matrix identify and name the business lines cited in the Case study above that are:

Question Marks

Stars

Cash Cows

Dogs

Justify your answer in each of the choices above

With specific reference to the Case Study construct a SPACE matrix for the Pizza Business unit at Meco Eats Cottage Ltd

Based on the Matrix in 2) above suggest two best Strategies that Meco Eats Cottage Ltd should pursue in its Pizza business unit give the information provided in the case above. Justify your answer.

Reference no: EM133216896

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