OPTP- Corporate Strategy

EMBA PS V – IBA

Main Campus

0333 2117414

abidbutt@yahoo.com, zaki.anwer89@yahoo.com

3/22/2012

Abid Butt & Zaki Anwer

The first ever One Potato Two Potato dine-in outlet was opened in Karachi. Since then One Potato Two Potato Karachi restaurant has established a casual and contemporary two-story eatery.

Table of Contents

How well is the OPTP present strategy working? 3

Evaluate Present Strategy 3

Choice of Location/outlets 3

Choice of Partner/Franchise 4

Choice of Menu4

Choice of customers 5

The best empirical indicators: 5

Are the OPTP Prices and Costs Competitive 6

The Marketing Environment 6

Micro-environment: 6

Macro-environment: 7

BCG Matrix 7

Product: 7

Pricing: 8

Promotion: 10

Placement: 10

BRANDING10

PACKAGING 10

LABELLING10

POSITIONING 10

CONCLUSION 11

DEVELOPMENT 11

RECOMMENDATIONS 12

Is OPTP Competitively Stronger or Weaker Than Key Rivals13

STEPS FOR COMPILING A COMPETITIVE STRENGTH ASSESSMENT 13

Competitive analysis 13

Competitors 13

STEP 2: RATE THE RIVALS ON EACH FACTOR 14

STEP 3: SUM OF STRENGTH RATINGS ON EACH FACTOR TO GET AN OVERALL MEASURE OF COMPETITIVE STRENGTH FOR EACH COMPANY BEING RATED 14

What are the OPTP Resource Strengths and Weaknesses and Its External Opportunities and Threats 15

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Positioning Statement: 15

Mission statement: 15

Goal: 16

Vision: 16

Objective: 16

Strategies:16

Differentiation 16

Organizational structure: 16

SWOT ANALYSIS 16

STRENGTHS: 16

WEAKNESS: 17

OPPORTUNITIES: 17

THREATS: 17

CONCLUSIONS FROM SWOT ANALYSIS 18

IDENTIFY ,DRAW CONCLUSIONS AND TRANSLATE INTO STRATEGIC ACTIONS 18

IMPLICATIONS FOR SWOT ANALYSIS FOR STRATEGIC ACTION 18

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How well is the OPTP present strategy working?

The urban populace is loaded with a bunch of cafes and restaurants which are offering mouthwatering delicacies and all food menu items to the people in the metropolis. One Potato Two Potato (OPTP) is one of the best places for eating out with branches all over Pakistan.

The first ever One Potato Two Potato dine-in outlet was opened in Karachi. Since then One Potato Two Potato Karachi restaurant has established a casual and contemporary two-story eatery.

The Story behind One Potato Two Potato OPTPTwo brothers who had a craze for potato fries have put this idea to the test. They started by experimenting with various types of potatoes and cooking techniques in an attempt to create the perfect fries. After continuous experimentation they managed to replicate the centuries-old formula; this they presented to their friends and family. It was then realized that they had found the recipe for success.

Evaluate Present StrategyIn order to evaluate OPTP present strategy, we must understand the KEY COMPONENTS of its strategy and ensure that its competitive advantage is unique and distinctive.

This differentiation would lead us to certain factors that would indicate OPTP s competitive scope within the fast food industry. Since it is a new local brand in the making, it has certain indicators that need to be understood in order to counter the rivalry in the environment. This has a definite impact on the strategy adapted by OPTP.

Choice of Location/outletsOPTP is concerned in opening the outlet; they always prefer to locate at the same place where other Fast Food chains giants exist, like KFC, Dunkin Donuts, Mr. .Burger and Pizza Hut. They prefer only those fast food chains which are not strong in the Fries category.

Today OPTP has six outlets in Karachi along with numerous potato fry stalls spread all over the city of Karachi. The small business is looking towards franchising for its expansionary needs. Major outlets are:

1- Stadium Lane 4- D H A -52- Naheed Super Market- Shaheed e Millat road

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3- Dolmen Mall Food Court- Tariq road4- Agha super Market – Clifton5- Park Towers – Clifton6- Bahadurabad Chowk

Choice of Partner/FranchiseIn order to achieve a qualitative stand point, for its completeness, internal consistency, rationale and relevance it needs to diversify and collaborate. OPTP endeavors in the selection of strategically partner and ensures that:

1) Its Partners are financially strong and stable with the ability to achieve the financial objectives in mind.

2) Reputation is the main criteria in selection of any partner and whether he is an above average industry performer.

3) Must not be in the Food chain business previously.

4) OPTP would like to avoid creating a competitor by sharing its own trade secrets.

Choice of MenuOPTP choice of menu has been the superior brand of Belgian Fries. During the research and findings OPTP discovered that the best fry potatoes were initially branded by the peasants of Belgium. The method of creating the “Belgian Fries” is to cook thrice using fresh potatoes.

One Potato Two Potato specializes in gourmet French fries which are made from fresh, premium potatoes and served with various sauces and toppings. Also on the menu you can find classic fries, hamburgers, hot dogs, wings and other tasty side dishes.

There are other OPTP favorites which include chicken wings, the famous hotdogs and grilled burgers. Both the fries and wings are served with a variety of signature dipping sauces and toppings. New products are continuously being developed and there are also seasonal items

Choice of customersTarget customers are the younger generation with the passion for fast food with health safety concern and hygiene. It targets value addition in the industry by providing ambience to the middle class in affordable prices. Management and the marketing team in particular, get greater insights into consumer perception about price and quality. This

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helps the company in bridging the gap between price and quality and taking the lead in competition.

The best empirical indicators:1- OPTP is achieving its stated financial

and strategic objectives within a short span of time.

2- It is an above average fast food product in the making and will soon establish its credibility in middle east as well

3- OPTP sales have gone down a little during the past 3 to 4 years as its competitors have tried to replicate its taste and flavor.

4- Management needs to have an elaborate marketing research on the price and quality perception of its customers and REVAMP its strategy.

5- Trends in OPTP net profits and return on investment are almost the same as its competitors.

6- OPTP image and reputation with its customers is of pivotal importance.

7- The management of OPTP had realized the lack of technology usage and resistance its firm facing by the non-technical staff. They hired a seasonal IT consultant to help the organization in IT and Organizational change management.

It has a strong current overall performance and is less likely to have radical changes in its strategy.

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Are the OPTP Prices and Costs Competitive

The Marketing Environment

Micro-environment:

1. SuppliersOPTPs basic needs for their daily operations are

Potatoes for fries are imported by OPTP through a supplier, the potato Factory international.

Bun breads for burgers Bread and other such baked products are purchased from DAWN BREAD.

Vegetables for burgers Purchased from local vendors.

Mayonnaise, ketchup and other sauces purchased locally.

2. BranchesOPTP have branches in three major cites of Pakistan (Karachi, Lahore, Islamabad) strategically located at prime spots for entertainment. Moreover they have small vending outlets at various shopping malls and departmental stores, OPTP also provides on the spot catering for occasions such as parties, melas etc.

3. Intermediaries

Physical Distribution Firms:OPTP does not cater home deliveries. All business is done via their outlets.

Marketing Service Agencies:Most of the marketing operations are handled internally.

4. CompetitorsCompetitors are, KFC, McDonalds .And other major and minor fast food outlets.

5. ConsumersConsumers comprise of people of any age but majority are teenagers and younger population.

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Macro-environment:

1. Technological ForcesOPTP uses conventional cooking and frying equipment. No innovation in this particular area is done as for the demand at current level, the current equipment is sufficient.

2. Cultural ForcesThe current culture of Pakistan s metropolitans is shifting towards the trend of eating out and the society is rapidly adjusting to this change.

3. Economic ForcesDuring the recently ended economic boom, such businesses thrived and much growth was seen, but currently prevailing situation has shown a great decline .

BCG MatrixOn the BCG matrix the OPTP is classified as a Question mark (?) due to high market growth and low market share

P’s of the Marketing

Product:OPTP offers basic fast food products like fries, burgers, hotdogs and sandwiches. Here is what OPTP is known for; OPTP specializes in fries and has unique varieties ranging from typical plain fries to much elaborate Garlic Mayo fries and specialty Bar B.Q fries.

Pricing:OPTP prices its products at affordable levels and fall in relatively moderate priced products. Even though they are not charging low compared to market to fall in market

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penetration strategy, they call it so because they consider the foreign fast food chain as their competitor ignoring the competition from locals.

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Promotion:But when we talk about OPTP, there has not been any sort of advertising or promotional campaign from the company s side. We talked to several people and all of them were aware of this brand, yet none could recall watching a OPTP commercial, seeing a OPTP billboard but some remember receiving a OPTP flyer long time back.

Placement:OPTP have branches in three major cites of Pakistan (Karachi, Lahore, Islamabad) strategically located at prime spots for entertainment. Moreover they have small vending outlets at various shopping malls and departmental stores, OPTP also provides on the spot catering for occasions such as parties, meals etc.

BRANDINGA name, term, sign, symbol or design, or a combination of these intended to identify the products and services of a seller or a group of sellers and to differentiate them from those of the competitors. Today, consumers view brand names as an important part of the product. Branding adds value to a product. Branding has become really common these days. And almost everything available is branded. Branding has many advantages; it helps consumers identify the products from which they might be benefited. When a person buys a branded item he would be aware of the benefits, quality and features associated with it.

PACKAGINGThe activities of designing and producing the container or wrapper of the product Since OPTP is a fast food product, it is mostly consumed within an hour of its manufacture, for this reason the OPTP does not concentrate on intensive packaging. The OPTP packaging includes simple small paper envelope for fries and a cardboard box for burgers. All the packaging bears the OPTP brand logo.

LABELLINGLabeling of products is very essential. Labeling performs multiple functions. It identifies the product. It might also describe many things about the product- like who made it, where and when it was made, its contents etc. it can also help in the products promotion. OPTP does not concentrate on packaging therefore labeling of OPTP has been ignored until now

POSITIONINGA product to occupy a clear, distinctive and desirable position in the market, it needs to target the minds of the target consumers. Positioning the brand actually refers to successfully placing the product in the minds of the consumers. Commonly, positioning is done by aggressive advertising and promotion of the product. Companies also use the brand recall strategy. In this, a company uses different ways to remind he customers about their product over and over again. This again is done through repetitive television commercials, billboards, posters, flyers and various marketing offers. But when we talk

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about OPTP, there has not been any sort of advertising or promotional campaign from the company s side.

We talked to several people and all of them were aware of this brand, yet none could recall watching OPTP commercial, seeing OPTP billboard but some remember receiving a OPTP flyer long time back. So, how has OPTP positioned itself in the market? Even though OPTP does not advertise its product, it still occupies a distinct position in the market. OPTP has focused on the fundamentals; it identified the needs of the consumers when it was launched, and is still satisfying their wants. OPTP emerged as a product to satisfy the potato fry craze (known as French Fries) of the Pakistani people. It was a very innovative product and was not segmented. It targeted everyone- all age groups, genders, social classes and groups.

OPTP has a unique set of loyal customers and they have been consuming it from day one. However OPTP is struggling to capture further market. Thus it is deduced that OPTP does need a stronger positioning strategy to grow further

CONCLUSIONAfter completing our research we came to the conclusion that most of the people are satisfied with the current variety, quality and hygiene. Hence OPTP has been successful in making its place in consumers mind within a short period. Given below are the recommendations for the organization to enhance their customer equity and acquiring a bigger market share.

DEVELOPMENTOPTP was launched as an innovator in eating out when it was initially launched in1998. At that time there was no concept of eating out or fast food among the common people. Since the product was new in the market, OPTP had a few large competitors, which were expensive and out of reach for many. OPTPs aim was to provide a high quality product at an affordable, yet profitable price. Due to its fine quality and innovation, the product was very successful. Hence began the products brand development.

A brand is an identity, and it strengthens as the product becomes more popular and its consumption increases. Over the years, OPTP has never compromised on the quality of their product. They took all possible steps to restore the taste when they received some negative customer feedback. OPTP has now been serving us since 10 years and their  top-most priority is still the provision of superior value.

OPTP has developed its brand in 10 years, but it is still struggling for its market share against a number of world leaders in this industry.

RECOMMENDATIONSPrices should be reduced

More marketing should be done

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Packaging should be changed

Burgers should be improved

Proper dining facility should be available

More outlets

More flavors of fries should be introduced

Home delivery system

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Is OPTP Competitively Stronger or Weaker Than Key Rivals

Using value chain analysis and benchmarking to determine company s competitiveness on price and cost is necessary but not sufficient. OPTP provides distinguished edge to competitors on each of the important factors that determine market success. It has a net competitive advantage over major competitors.

Quantitative strength ratings for OPTP have been developed and its key competitors on each industry key success factor and each competitively decisive resource capability.

Competitive analysis

Steps 1: Compiling a Competitive Strength AssessmentFast Food industry key success factors and most telling measures of competitive strength or weaknesses are

CompetitorsYou cannot enjoy the business without competitors. No organization can afford to ignore these competitors. It is very important for marketing managers to monitor the activities of these competitors, what they are doing? OPTP adopted such sort of strategy that there is no competitor for French fries, which is made OPTP. OPTP beats its competitors through the revising marketing strategy at every movement.

o Customers must see a consistent difference between your product/service and those of your competitor's. This difference needs to be obvious to your customers and it must influence their purchasing decision

o Your competitive advantage must be difficult to imitate. Avoid falling into the incompetence trap.

o The above two items combined must be activities that can be constantly improved, nurtured, and work at to maintain that edge over your competition

Step 2: Rate the Rivals on Each FactorA high competitive strength ratings signal a strong competitive position and possession of competitive advantage; low ratings signal a weak position and competitive disadvantage.

Competitive strength assessments provide useful conclusions about a company s competitive situation.

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Step 3: Sum of Strength Ratings on Each Factor to Get an Overall Measure of Competitive Strength for Each Company Being RatedOPTP strengths are more as compared to its rivals and its weaknesses are far less as compared to its adversaries.

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What are the OPTP Resource Strengths and Weaknesses and Its External Opportunities and Threats

Appraising OPTP resource strengths and weaknesses and its external opportunities and threats commonly known as SWOT ANALYSIS, provides a good overview of whether its overall situation is fundamentally healthy. People from all ages are aware of its taste and quality.

The best part of one potato two potatoes is that, it has small counters placed at different shopping malls and supermarkets which make it successful in acquiring equitable customers. Whenever hunger for French fries is there one potato two potatoes is the first name that comes in consumer s mind which includes urban areas of Pakistan. Though it has a limited variety of fast food but still it has long term plans which include dine-in facilities more out lets and a wide variety of food. Their outstanding brand recognition, experience management, high quality food, site development expertise, advance operational systems ensure a position that enables them to capitalize on urban opportunities. They plan to expand their leadership position through great tasting food, superior service, everyday value and convenience.

Positioning Statement:We fry first class only

Mission statement:We serve people with good quality food, fast and at low cost:-

One potato two potatoes vision is to dominate the Pakistan s food service industry .Dominance means setting the performance standard for customer s satisfaction and increase market share and profitability through successfully implementing our convenience, value and executive strategies.

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Goal:One potato two potatoes goal is to become Pakistan s best and quick service restaurant experience. Their core focus is on customer’s satisfaction, high quality, hygienic food, and well trained staff.

Vision: One potato two potato is highly successful in capturing the taste buds of Pakistani people and is looking forward to do the same with the global market. They are also planning to open their outlets in UAE and KSA in recent future.

Objective: To cement the company pre-eminent position in the eyes and taste buds of the customer maintaining its present customers and making new one by providing high quality and taste, being the customers first choice.

Strategies:

DifferentiationBy pursuing a strategy of differentiation, the organization gives an emphasis to a particular element of marketing mix that is seen by the customer to be important and as a result provides a meaningful basis for a competitive advantage. This de-massification of markets has led OPTP towards strategies of product variety marketing and ultimately target marketing.

Organizational structure:One potato two potato has horizontal hierarchal structure. It has a limited number of loyal employees called as team members .It has got following departments, Marketing department, Human resource department, Operational department quality, service and value department. Segmentation, targeting and positioning is done by these departments. It handles what next scheme or deals are to be used. They plan out what promotional tools are to be used in the upcoming days.

SWOT ANALYSISSWOT analysis is basically a study to find out company s strengths, weaknesses, opportunities and threats. SWOT analysis tells the company about their strong points and gives them an opportunity to work on their weaknesses. The SWOT analysis for OPTP is as below:

STRENGTHS:The biggest strength of OPTP is its committed workforce and emotional attachment with the brand and company. The company has a loyal and committed workforce whose basic goal is to deliver a premium quality product. Workforce maintains absolute secrecy and does not allow outsiders in their processing premises as they fear leaking out their secret recipe.

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It has a very strong brand image in the making and has strong customer loyalty as well. It has the potential of being a successful market leader as the market is diverse and no one can claim this hegemony.

OPTP product value is massive and has an exceptional brand equity. It has encompassed wide range of environmental standards of cleanliness and quality.

Flexibility is valuable intangible asset the OPTP has achieved mastery in a short time.

WEAKNESS:The biggest weakness of OPTP is their lack of vision to grow and expand. Had OPTP wanted to grow, they would have really succeeded due to their increasing demand in Karachi, Lahore, Islamabad and other cities of Pakistan where OPTP is not available. Hence if OPTP wanted to grow, it could have grown in terms of size as well as introduce different variant of fries, burgers and hotdogs. Coverage has been the main issue for OPTP SO FAR , IT HAS A HUGE POTENTIAL BUT LACKS COVERAGE and in return losing margins and profitability.

OPTP resistance to technology innovations has also restricted the growth.

OPPORTUNITIES:The market potential is growing and so does OPTP needs to grow. The market for fast food is always diversified and people need for variety is also at the increase. E-commerce and technology innovations can be of great assistance if adapted at correct timings.

Due to a considerable demand of their fries in the areas where it is not available, the biggest opportunity is to grasp the high market share and make it proficient enough to enter the star cell of BCG Matrix.

Promotional offers do attract people , it must also be envisaged.

THREATS:Economic problems

Political problems

Poor performance in one outlet, effects other outlets.

Rising health issues.

Negative advertisements by competitors.

One of the biggest threats for OPTP is that of fake brands that are copying the product. The brand is considered to be one of its kinds but still is unable to grasp a higher market share. They fear that if any competitor will enter the market they will lose the existing market share.

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CONCLUSIONS FROM SWOT ANALYSIS

IDENTIFY ,DRAW CONCLUSIONS AND TRANSLATE INTO STRATEGIC ACTIONSOPTP has an attractive set of resource strengths.

The weaknesses and deficiencies are not so pertinent and they cannot be overcome by an insight and little effort.

The OPTP resource strengths and competitive capabilities outweigh its resource weaknesses and competitive deficiencies by an attractive margin.

The threats are negligible and can be dealt with amicably.

OPTP overall situation is commendable and has lots of potential if its vision , mission and overall strategy is aligned properly.

IMPLICATIONS FOR SWOT ANALYSIS FOR STRATEGIC ACTION

Competitive capabilities need to be strengthened immediately.

OPTP has limited liabilities and should not be bothered in this aspect AND SHOULD GO ALL OUT TO EXPAND its outlets all over Pakistan in order to achieve all what it has lost by not going national and restricting to urban populace only.

Market is diverse and with lots of potential. Any initiative will go big time and earn profits and margins.

OPTP should immediately adapt to technology changes and innovations within this industry.

OPTP resource strengths are generally the cornerstone of its strategy and represent its success in the market.

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