Blake Hall

BTEC Advanced Professional Diploma in Management

College
Name: ___________________________ Individual Centre
Activity title: Strategic Review - unit 11 Assignment reference: SR 1

Date issued: ________ Date due: ________ Date submitted: __________

Assessor(s): ______________________________________________

Outcome Evidence for Feedback Assessor’s Internal

the criteria decision Verification

Examine Section in the a

existing short- report
and long-term identifying
environmental environmental
factors factors
affecting an
organisation or
sector
Section in the b
(1.1) report
analysing the
needs and
expectations of
stakeholders

Section in the c
report
assessing the
environmental
factors that
affect strategy

Review the
effectiveness of Section in the a
existing report using
business appropriate
strategies, tools and
policies and measures to
plans analyse the
effects of
(1.2) business plans

Section in the b
report
summarising
the position of
the
organisation in
its current
market

Section in the c
report evaluate
the
competitive
strengths and
weaknesses of
the
organisation’s
current
strategies
Develop and
consider Section in the a
options for report using a
strategic range of tools and
planning models to develop
strategic options
(1.3)

Section in the b
report showing a
comparative
understanding of
activity from
organisations in
the market

Section in the c
report indicating
range of feasible
options as the basis
of future
organisational
strategy

Lecturer’s additional feedback and comments

Internal verification of assignment brief (final agreed version)

IV name (print) Date

I confirm that this is all my own work Learner signature

Scenario

Délys Ltd is a private company that makes cakes under the brand name “délys”. It
was founded in 2000 by Jo Brown who liked the chocolate based cakes and
patisserie that was on sale in Paris whilst she was working there. Nothing similar
was available in the United Kingdom so when she returned home a career change
and business opportunity beckoned. With £75,000 Délys Ltd was founded. It makes
a variety of desserts and sweets for the premium end of the market. All the output is
of chilled products. Production is carried out at Délys Ltd’s own factory and by one
other food manufacturer in England that is not owned by Délys Ltd. Sales are
through the main supermarket chains such as Tesco, Sainsburys, Asda and
Morrisons. Some independent grocery chains also stock “délys” products and the
products also sold by Harrods and Fortnum and Mason. The national press has
praised the quality of the products and a number of organisations have identified
some “délys” products as being the best of their kind in taste tests. Jo Brown has
found fame as a dynamic entrepreneur and is a dragon on the BBC business show
“Dragons’ Den”. Jo is a hands-on managing director and would always want to be
seen as such in any business she worked in.

Sales of the company’s products have currently grown by more than 15% per annum
every year since the company was founded and they currently amount to £6 million
annually. The net profit on sales ratio is a very healthy 10% and at this level other
businesses have been attracted to Délys Ltd’s business model. The company has a
balance sheet that shows there are assets of £20 million funded by a mortgage of £7
million, a long term bank loan of £2 million and retained profits over the last 10 years
of £6 million. The residual amount comes from the shareholders’ equity. It employs
60 people. Apart from one factory with attached offices, Délys Ltd owns no
distribution businesses and no retail outlets.

The value of the prepared sweet and dessert market in the United Kingdom,
according to some estimates is reckoned to be £850 million annually and it is
dominated by chilled products that account for 65% of the market. The rest is
accounted for by frozen and ambient products. In recent years it has become clear
that consumes will buy luxury food in good times as well as bad. They are seen as
an affordable treat in bad times. The market seems recession proof. Recognising
this many of the large supermarket groups have developed luxury lines that sell at
premium prices. Tesco have a “Finest” range and Sainsbury’s have a “Taste the
Difference” range. Other companies such as Gü and Rachel’s Organics have also
started up offering their products to the sweet and dessert market. It is clear that
there are plenty of niche markets for organic products, gluten and dairy-free
products, ready foods, party food, healthy food, British food and children’s food.

The company realises that its position as a single product company making just
chilled products that sells through existing retailers is a risky one. Currently Jo’s
preference is to continue doing more of the same thing which is based around
expanding the chilled sweet and dessert range and selling through established
retailers. However the board is concerned about this approach. Some of the options
it is considering include:

• Expanding the range of desserts and sweets it makes to

include Viennese and Italian styles.

• Expanding the range of products to include ambient and

frozen products

• Producing healthier products to chime in with consumers’

changing tastes and government initiatives on healthy lifestyles

• Increase the number of retailers selling the “délys” range

 • Producing own label products for the supermarket chains

• Expanding internationally

• Diversifying into other product areas such as bakery

• Making products for niche markets such gluten intolerants

and products for specific ethnic and religious groups who have specific
dietary needs.

• Supplying mass-market caterers and airlines.

• Licensing producers to use the “délys” name on other food

lines.

• Opening “délys” retail outlets in retail centres.

• Taking over other businesses. Two local firms with good

regional reputations which might be targets are Maggie’s Farm Breads, an
artisanal bakery, valued at around £1.5 million, and Chocolaterie de Groote a
company that hand makes Belgian style chocolates that is worth around £1
million.

• Selling out to a large food producing business. Jo believes

she could probably get £25 million for Délys Ltd. and get a seat on the board
with a view to moving up to be in charge of a FTSE listed company.
Alternatively she could just walk away with the money and find new
businesses and ideas to develop. She also knows that Ben and Jerry’s lost a
lot of its carefully developed image as a hippy ice cream maker when it sold
out to Unilever and she does not want to lose the market image she has built
up for Délys Ltd by selling out. But she knows everything has its price.

Required:

Task 1

You work as a project manager for the BlueSky Consultants which is a firm of
management consultants with expertise in the food sector. You will need to research
the UK market for desserts to identify its size, the trends and the structure to inform
your work for Délys Ltd. Prepare a report that will be presented to the management
of Délys Ltd in which you:

• Using some models of business environmental scanning, identify the

environmental factors that affect Délys Ltd’s operations.

(1a)

• Analyse the needs and expectations of all Délys Ltd’s stakeholders and how
you will balance those conflicting needs.
(1b)

• Critically assess the major changes taking place in the general economic
environment and the market for food stuffs especially luxury items that will
affect Délys Ltd’s strategy

(1c)
• Use appropriate tools to analyse and measure the effects and effectiveness
of Délys Ltd’s current business plans.

(2a)

• Summarise the position of Délys Ltd’s in its current market.

(2b)

• Evaluate the competitive strengths and weaknesses of Délys Ltd’s current

strategies

(2c)

• Use a range of tools and models to develop a range of strategic options for
Délys Ltd
(3a)

• Analyse the comparative strategic position taken by competitors in the market

and how it may affect the choice of future strategy by Délys Ltd

(3b)

• Create a range of feasible options as the basis of future organisational

strategy for Délys Ltd

(3c)
Grading

Pass All criteria identified in the assignment are met.

Marking guidance

The report is a substantial piece of work and this must be reflected in the submitted
material. The food market needs to be researched and it the results of the
investigation should be validated, analysed and evaluated in order to provide a
reliable basis for reviewing the activities of Délys Ltd and making the subsequent
strategy proposals for the company. Allocate around 2,500 – 3,000 words for the
report although this is only a guide.

All work must use suitable formats and be of a standard expected in organisational
settings.

Notes

• Use a standard business format for the report.

• Word process the material as far as is possible.
• Use 12 point Arial or Trebuchet script.
• Identify any references.
• Use the Harvard referencing system.
• Complete the title page and sign the statement of authenticity.
• Use a butterfly or treasury tag to keep the pages of your work together.
• Late work will only be marked on the next occasion the unit is taught in
semester 1 in 2011. If the unit does not run again then you will need to pay a
late assessment fee in line with the requirements of the college’s assessment
policy.
• Submit the work to Shital Keer in the faculty office by 7 April 2009 at 16h00.