Food4u, Inc - the Pizza Competition

CASE STUDY 1

                                           Food4u, Inc - The Pizza Competition

Question 1:

Does Food4U, Inc. enjoy any competitive advantages or core competencies?

Competitive Advantage refers to favourable business positions and more superior market perceived value a company has as compared to its competitors. Competitive advantage results from matching core competencies to the opportunities, and YES, Food Inc definitely has the privilege to accomplish its competitive advantage aspects given the listed influencing factors.

The Competitive Advantages Food4u enjoys include the following:-

1. Specialisation & Professionalism

Food4u is a specialised food service provider; their business covers multiple market segments such as corporate, airlines, university and colleges. It is a large nationally operated food services company serving client organizations, and it has been operating the food services for the past 10years.

1. Experience & Market Knowledge

Food4u has been operating in the university for the past 18 months, they have knowledge of their customers’ preferences and the sales trend from the regular surveys carried out.

1. Strategic Location & Close Proximity

Food4u’s business facility is located in the centre of the campus, which is isolated from the rest of the town. If students want to go for other food choice they will have to drive into the town. Besides, the location is also equipped with peripheral parking lots.

1. Exclusivity

Food4u is the only food vendor under contract to provide food services for the entire campus.

1. Variety in Food Range

In its primary facility, Food4u has a large cafeteria which provides food for the whole day, starting from breakfast to lunch, and to dinner. In addition to ordinary meals, Food4u also serves other range of food such as upscale luncheon buffet, and grill style.  

Question 2:

Initially, how did Renee Kershaw choose to use her pizza operation to compete with off-campus eateries? What were her competitive priorities?

Initially, after 3 to 4 months of getting oriented to new position, Kershaw had begun to conduct surveys to determine customer needs and market trends. Feedback received from the survey was reviewed and actions were taken for improvements in order to compete with off-campus eateries. Renee Kershaw chose to implement the following competitive priority strategies:-

1.  Expand the menu at the grill to include Pizza

From the feedback collected from a survey, Food4u was lack of variety in their food offerings. Adding Pizza with multiple topping selections can enhance the food variety.

1. Provide food delivery service to entire campus

Delivery to the doorstep can add value and offer convenience to its customers especially to those who do not own a car to drive out, or those who do not have time to eat out. In addition, delivering using bicycle can ensure quick delivery within the campus which was considered short distance.

1. Upgrade its operating facilities and personnel skills

Kershaw decided to install a pizza oven in the grill, and to allocate some space to store the pizzas ingredients, to make cut-and-box pizzas, and to stage premade pizzas that were ready to cook. The existing staffs were trained to make pizzas, and new staffs were hired to deliver the pizzas using bicycle.

1. Keep costs under control

Kershaw decided to limit the combinations of pizza toppings available. This would avoid wastage while ensuring easy and quick preparation once an order was received. Besides that, the delivery was using bicycle which is a cost effective way.    

Question 3:

What impact will the new food court have on Kershaw’s pizza operations?

What competitive priorities might she choose to focus on now?

The new food court has several impacts on Kershaw’s pizza operations. It posed a significant competition as there were other types of food offered by the food court as such snack food (Dunkin’ donuts) and fast food (Taco Bell). Her on-campus market was being affected greatly by some “pizza war” off campus and the proliferation of specialty pizzas. To add to the problem, student groups were beginning to order pizzas in big volume for various on campus functions. Now Kershaw should focus on the capacity problem and delivery time. Several positive impact and negative impact created by having the new food court can be identified as follows:

1. Negative Impact:

1. Decreased Sales

With the opening of new food court, Food4u would face a great competition as both were offering food. In addition, the food court not only selling other types of food such as snack food (Dunkin’s Donut) and fast food (Teco Bell), but also there will be the key competitor, Pizza Hut.

Newly open food court can easily attract customers to try out their food. In the event the newly open food court offers promotions or special price, the effect of competition would become worse. In such situation, if Food4u is unable to maintain it running costs, it might face the risk of making a loss or being closed down.  

1. Impact to the expansion plan of Pizza operations

Food4u’s plan to enhance the service facility in its Pizza operations would be affected because the sales return has become uncertain. There is a risk that the profit is insufficient to cover the costs.

1. Positive Impact:

1. Eliminating the challenges of over demand

The growing Pizza business over the past 10 months has resulted in a strain on the grill’s facilities, whereby the grill was running out of space for working area, and the delivery was being delayed often. Food4u was not able to cope with the increasing demand, at times they had to split the preparation and cooking into several sessions during peak order times. Now with the opening of new food court, all these challenges can be eliminated and customer dissatisfaction can be addressed.