Case Study Pizza War Essay

BSB, Inc. is a large nationally operated diet- work company. The company serves lymph node organizations on a contract basis. Its business is divided into 3 (3) market-oriented divisions of corporate, airline business and university or college. Case Summary Renee Kershaw is BSBs manager of feed returns at a medium-sized private university in the Southeast. BSB has been operating at the university for the one cartridge holder(prenominal) 10 years and Kershaw has been the manager at BSB for the past 18 months. At the university, BSB caters for 6000 students and 3000 faculty staff and support personnel via its 3 different eateries in the university campus.The three eateries atomic spell 18 a)The Cafeteria ? Open for breakfast, lunch and dinner daily b)The cornel Room ? Serves an upscale luncheon buffet on weekdays only c)The cook ? Open in the midst of 11a. m to 10p. m daily and until midnight on Friday and Saturday nights Initially, after(prenominal) 4 months cosmos in-ch arge of BSBs trading operations at the university, Kershaw conducted a keep up on customer needs and market trends. The survey revea take that students were non pleasant with the nutriment works at the university.A large amount of the nutriment for thought being consumed by students was not from BSBs facilities of importly due to a insufficiency of miscellanea and unsuitable facilities overhaul time for the students. Below ar the data from the survey nutriment prepared in dorm room20% nutriment delivered from off campus36% Food consumed off campus44% Students with cars on campus84% Students with fridges or microwaves in their rooms62% Food that students consumed outside BSB, Inc. facilities43% As a result of the survey conducted by Kershaw, she resolute to include pizza pie pies in the carte du jour. In addition to the sweetfangled menu, Kershaw a wish well introduced actors line supporter (by bicycle) for its pizzas.Currently, a serving from placing the piz za making facilities at the grillworkwork, space is in any case being allocated at the grill to store pizza ingredients, as head as to prepare and stage pre-make pizza. In order to keep the damage down and provide fast pitching, only a limited subdue of ? standard pizzas are offered in the menu. Challenges and Problems Despite the rise in sales and profit from the pizza operations, step-up in demand for the pizza has led to capacity problems and increase in speech communication times. As a result, the pizzas sales began to level off.Further to a greater extent than than, Kershaw is concerned of the competition from a new solid nutrition courtyardyard to be opened in campus which will home pizza chantey, Dunkin Donuts and Taco Bell. Specifically, Pizza Hut will be pose up a facility offering a limited menu and pizzas on a walk-up-and-order basis. Question 1 Does BSB, Inc. enjoy any combative advantages or core fightncies? set Competitive Advantage is the ability of a company to win consistently over the long term in warlike situation. Core Competencies are the unique resources and strengths that an organizations circumspection takes into account when formulating strategies.BSB enjoys competitive advantages or core debatencies in a number of ways. a)Specialization BSB is a specialized nutrient- go operator for universities and colleges. b) Experiences ? BSB has been serving the university for 10 years and then they have premiere hand knowledge relating to customer preferences and needs derived from their experiences in the market. For e. g. survey data. c)Existing facilities and services provided ? new entrants have to start from scratch. For e. g. location and delivery services in the university are very important due to the lack of parking spaces.d)Brand Recognition Familiarity among the campus community of the BSB ? brand as it has been in reality for some time. e)Close proximity Close proximity to the customers is critical for p izza delivery as it allows quicker and lower cost delivery. Question 2 Initially, how did Renee Kershaw favor to use her pizza operations to compete with off campus eateries? What were her competitive priorities? Answer Kershaw decided to use her pizza operations to compete with off campus eateries ground on the undermentioned reasons a)Available resources ?Based on time, location and staff getable for Kershaw at that time, pizza operation is the most logical choice to be adopted in competing with off campus eateries. Pizza operations do not transmit much time to be set-up. Furthermore she mickle discharge the operation from one of the available eateries (she decided at the Grill) and a marginal amount of staff training is required to run the pizza operations. b)Food salmagundi ? By introducing pizzas in the menu, Kershaw has somewhat addressed the problem of the lack of food for thought variety by only implementing stripped-down changes in her normal operations. c)Cateri ng for students squiffy schedules ?Through delivery services, Kershaw is able to cater for students with tight and whimsical schedules. This bechanceing is based on the high percentage of food not purchased from BSB facilities whereby 36% of the food is delivered from off campus. Since pizza can be kept and reheated easily, red into the pizza business seemed like the best option for Kershaw because 62% of students in the university have fridges and microwaves in their rooms. Competitive Priorities are the critical dimensions that a dish up must possess to return its internal or external customers some(prenominal) now and in the future.Kershaws competitive priorities when choosing the pizza operations to compete with off campus eateries were a)Cost ? Low cost of operating since pizza operations require minimal staff training and delivery is done by bicycle. restrain combinations of toppings and ? standard pizzas available enable Kershaw to keep cost down. b) tractableness ? Through minimal changes, Kershaw is able to add a survival of the fittest of pizzas to her menu as part o her efforts to increase the variety of food offerings. c)Time ?The limited number of pizzas that can be prepared and cooked would be able to speed up readying and delivery time since ? standard pizzas can be pre-assembled and ready-to-cook once orders are received. QUESTION 3 a) What jar will the new food court have on Kershaws pizza operation? The immediate impact would be direct competition from separate food operators. As denote by the University, the new food court would accommodate, among others, food certifys such as Dunkin Donuts, Taco Bell and Pizza Hut.BSB, Inc was the sole contractor and provider of food services in the University campus prior to the announcement, thus it has, until latterly, enjoyed somewhat monopoly status. Of even more concern to BSB is the particular that the new food operators are coming in as established brand names, hence making competin g with them an even more difficult task. Competition to BSB, Inc would occur in the form of alternative food types. Dunkin Donuts, for example, would offer snack-type food for the students, where as the likes of Taco Bell offers balmy-to-go fast food. Students would find these types of food suitable for life on campus.Students are normally render to hectic schedules and are always on the move, therefore having the convenience of easy and ready-to-go food services (as offered be the new operators) would suit them very well. Of more significance (to BSB) is the publication of Pizza Hut on campus. Kershaws BSB has recently introduced grilled pizza as an item on its grill menu, and has so far enjoyed considerable success too. Of course, this was before Pizza Hut came into the picture. on that point is little argument that Pizza Hut would provide the keenest and most direct competition to Kershaws pizza business.In fact, Pizza Hut, being a reputable and an established franchise coup led with its financial muscle, would be a serious and immediate threat to BSBs market share in pizza sales. However, Kershaw should take note of the fact that the Pizza Hut franchise on campus has its limitations. For one, the Pizza operator does not offer delivery service (for now), as it operates on a ? walk-up-and-order basis. Secondly, it is only offering limited filling of toppings for its pizzas, preferring to taper on a ? standard menu. QUESTION 3 b) What competitive priorities might she choose to focus on now?BSBs competitive priorities can be divided into three main categories Cost, Flexibility and Time. With the establishment of the new food court and the emergence of the new food franchises at the food court, Kershaws BSB would now have to decide which competitive priorities would give it a competitive advantage and thus allow it to break off compete with its more established competitors. BSB may choose to focus on its wide array of food option it provides on campus v ia its three main food facilities the Cafeteria, the Dogwood Room and the Grill.Compared to its competitors which serve mainly homogeneous products i.e. donuts, tacos and pizzas, BSB offers a better selection of food items including those offered by its competitors i. e. pizza, which may work to BSBs advantage in serving customers who longing for an ? expanded menu to satisfy their culinary instincts. As part of its efforts to offer a variety of food selection, BSB can also look at change magnitude the topping combinations for its pizza to compete head-on with Pizza Huts limited selection of toppings. BSBs efforts at expanding its menu should not be at the set down of lineament, while at the same time attempt to maintain the determine for its food items.Another competitive priority that Kershaw and BSB would do well to leverage on is its ability to provide delivery service. Since BSBs competitors do not offer delivery service, BSB has an edge in this area, as students, which ma ke up the absolute majority of it customers, would usually prefer not to dine out disposed(p) their hectic schedules. Also, BSBs customers would be able to enjoy food in the comfort of their own dwellings. In addition, Kershaw may want to set a minimum amount limit for delivery orders to ensure the service body cost viable, and also to ? encourage customers to order more food or higher priced food items.QUESTION 4 a) If she were to change the competitive priorities for the pizza operation, what are the gaps between the priorities and the capabilities of her processes. In its efforts to add variety to its food selection and in response to a customer survey conducted, BSB has started offering pizza to its customers. BSBs pizzas were well received by the students, and in short after, sales increased, resulting in higher profit margins for the company. However, the new found success comes with new challenges. Kershaw soon found that her be capacity is not sufficient to cater for the increasing demand for her pizzas.She lacks storage space for pizza-making equipment and facilities i. e. ovens and space for her pizza ingredients. Her pizza operations are putting a strain on her other grill activities, which is forcing her to re-look at some of the selection on the grill menu. Given her existing facilities, she faces the dilemma of increasing her pizza supply at the expense of other food items. This may defeat her initial purpose of attempting to offer a variety of food selection. b)How might that affect her operating processes and capacity decisions?Kershaw was also faced with the problem of longer delivery time for her call-to-order pizzas. She deduced that the gap arising between her existing capacity and the growing demand for her pizzas has, to some extent, caused delivery time for pizza orders to slowly increase, possibly leading to ensuing complaints from its customers. The poor service (delay in delivery orders) may influence customers to seek alternative food services in and off campus. As a consequence of the gap, customers felicity may decline, potentially leading to loss of regular and existing customers as they opt for alternatives.As a result, sales will suffer, and unavoidably bear on BSBs bottom-line, if not immediate, in the long run. Lower margins and ultimately declining favourableness will in turn impact the companys boilersuit performance and viability as a going concern. QUESTION 5 What would be a computable service strategy for Kershaws operations on campus to meet the food court competition? With the emergence of new food services in campus namely Dunkin Donuts, Taco Bell and Pizza Hut, Kershaw should first invest time and resources in understanding the impact of the emergence of these competitors on customer preferences.Knowing very well the fact that Pizza Hut are of world class standard with regards to quality and taste, Kershaw needs to come up with a better business strategy. Our group has deliberated on the following recommendations as part of Kershaws strategy 1. Offer Variety of Pizzas at Cheaper Price Off Campus food outlets, especially those offering Pizzas have emerged as a serious source of competition to BSB. These food operators are possible to offer many pizza combinations. Thus, Kershaw could maintain its competitive advantage by offering a variety of pizza with a wide epitome of toppings at reasonable prices.The key to this strategy is to maintain quality and to insert on product offerings. For instance, Kershaw could offer pizza selections which are different from what Pizza Hut currently offers (such as Spicy Tandoori Pizza, Vegetarian Pizza and Chicken acerbic Pizza). This might allow the customers to have more choices that are superior in quality yet affordable. By offering Vegetarian Pizza which is not being offered by Pizza Hut, the international students who are vegetarians (i. e. students from India and China) could also indulge in the pizza. This could create a niche market for BSB among vegetarians.Due to the fact that the majority of the universitys residents are students who do not earn a primed(p) and stable income, Kershaw should offer pizzas that are affordable to them. To beat her competitors, Kershaw should sell the pizza at lower prices than Pizza Hut. By offering a variety of pizzas at lower prices, Kershaw could increase the demand for its pizza, ultimately increasing its profits. 2. adduce Good and Consistent Quality Understanding customer needs and maintaining well-behaved quality are paramount in ensuring success, especially in the food industry because customers are extra value conscious when it comes what they ?consume i. e. food and beverage. For some customers, price may be of less importance compared to quality.Kershaw should interminably reinforce its pizza quality and standards to remain ? relevant with in-campus and off-campus customers. 3. Phone smart set and On-time Delivery Kershaws direct competitor, Pizza H ut could probably learn BSBs pizza prices, but may lose out in terms of selection and delivery. Since Pizza Hut does not accept squall orders and do not offer delivery services, Kershaw should take advantage by offering these services to the customers.Kershaw should allow phone orders because most of the students face erratic schedules that discourage them from eating out In addition, the delivery should be made timely to ensure customers satisfaction. 4. Longer Operation Time Due to the fact that the schedule of students are tight and normally did not fit with cafeteria serving hours, Kershaw should tender its business operations until midnight. Some students tend to study until midnight and like to have supper. In fact, they will find the nearest food court for convenient. Many students tend to study and have a group sermon outside the library while having supper at the same time.Thus, it is important for Kershaw to extend its operation hours and serve food such as pizza or bur ger at the cafeteria. As a result, Kershaw could maintain its competitive advantage and compete against the likes of Pizza Hut and Taco Bell. 5. Expanding the Distribution Network Presently, Kershaw is renting three food-service facilities namely the cafeteria, Dogwood Room, and Small Grill. However, she is nearing full capacity on her pizza operations and is looking to expand. Thus, she may have to consider a new location, as there seems to be limited space at the grill location.Clearly, she can choose to set up new convenient and taking food-facilities such as the Kiosk and Bistro-type facilities, provided that the return on investment is worthwhile. closure AND RECOMMENDATION In conclusion, by adding variety to the menu while maintaining the quality and delivery speed, it is possible for BSB to maintain its competitive advantage despite the emergence of new rivals such as Pizza Hut and Dunkin Donut. The increase in requests for additional topping combinations and levelling of s ales suggest that BSB should expand its product variety.This suggests customers desire for a variety of selection, and the expanded hours will enable BSB to offer its services when the Pizza Hut is closed, or when students are in their dorm rooms. However, an increase in product variety will affect both service and cost. Kershaw probably cannot have as many pre-made pizzas ready to be thrown into the oven. She will also need to stock additional toppings. If she wants to maintain good service, she will need to hire additional workers. Hence, there will inevitably be some trade-offs between quality service and cost if she decides to focus on product flexibility.