Final

“An investigation into the strategic

planning process at JD

Weatherspoon”?

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181172

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CHAPTER 1

1INTRODUCTION

1.11 INTRODUCTION

The strategic planning process is essential for success of an

organization. So achieving organization goal is very important for the

progress of an organization. This project will describe the strategic

planning process for constant achievement for JD Wetherspoon plc,

Baxter’s court, pub 185, London, E8 1HE.

“In general, businesses strategy exist to make a profit, i.e. when the

revenue from selling their goods and/or services exceeds the costs

of producing that output. In economic theory, the assumption made is

that a private sector business will seek to maximize its profits.”

Source: Harris (2001), Business Economics, Reed Press,

Oxford.

In the 1970's, many medium sizes organization adopted a formalized

top-down strategic planning model. Under this model, strategic planning

became a deliberate process in which top executives periodically would

formulate the JD Weatherspoon's strategy and then communicate it

down the organization for implementation.

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1.12 PURPOSE OF THE STUDY

A study of the strategic planning process to achieve organization

goal of JD Wetherspoon Plc, Baxter’s Court, Pub - 185, defining and

contrasting the marketing strategies to undertake the appropriate uses

in order to identify areas of improvement. This research used the action

research methodology to develop a new framework about how JD

Wetherspoon Plc, Baxter’s Court, Pub - 185 use the new strategic

planning process to achieve its goal. This structure is the first that

explores the issues within UK- based organizations JD Wetherspoon

Plc, Baxter’s Court, Pub - 185 in practical terms. The results show that

the competence level of all employees and the updated product

knowledge, on the job training and proper supervision is the main

factors to achieve its goal.

And I have chosen J D Wetherspoon plc. Pub 185 as my research project

because JDWetherspoon has become one of the most popular pub

chains in the UK, weekly welcoming millions of people for everything

from a quiet cup of coffee to a big Saturday night out. They have gone

from 70 to 740 pubs in under ten years.

The other purpose of the study is how we can overcome the present

recessionary climate in the pub sector in the Great Britain. At present

there are 52,500 in the Great Britain (BBPA). According to the

British Beer and Pub Association (BBPA)’s latest survey released on

04/02/2010, there are 39 pubs closing per week and in first half of 2009

it was 52 pubs per week. A total of 2,365 pubs closed in 2009 and jobs

lost 24,000 in this sector in 2009. Between July, 2009 to December,

2009 a total of 1,013 pubs closed down and 10,000 jobs lost in local

communities across the Great Britain.

In the national economy and community life, pubs make a significant

and valuable contribution to both. BBPA thinks the tax burden a key

issue to closures of the pubs.

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1.13 AIMS AND OBJECTIVES

1 AIMS

The aim of the research is to define JD Wetherspoon Plc, Baxter’s Court’s

(Pub 185), and influence to local market by using integrated the

strategic planning process for the continuous growth of profit .

2 OBJECTIVES

The objectives of the research are as follows:

1. Determine and strategic development of JD Wetherspoon

Plc, Baxter’s Court, pub - 185 local best markets for sales

and leads.

2. Track the trends of JD Wetherspoon Plc, Baxter’s Court, pub - 185

visitors to analyze the most effective marketing strategies for

pricing.

3. Modify JD Wetherspoon Plc, Baxter’s Court, pub - 185 marketing

solutions to take advantage of the customer's needs.

4. Run JD Wetherspoon Plc, Baxter’s Court, pub - 185 costs

and expenses with a variety of tools.

1.14 JDW’S COMMITMENT TO MEET THE RECESSION IN PUB SECTOR IN THE UK

All pub managers are responsible for delivering the best CQSMA

standards - that's cleanliness, quality, service,

maintenance and atmosphere. These are the five

cornerstones of the perfect J D Wetherspoon pub; they act as

the building blocks on which they assemble each welcoming pub

experience.

“Pubs across Britain are closing at a record rate. So how does JD

Wetherspoon feel confident enough to promise to open 250 new outlets

in the next five years?”

Source: James Thompson reports on The Independent 2 Dec, 09.

We’ll wether the Recession – Chain to create 10,000 jobs with 250

pubs. (Source: The sun 2 December, 09.)

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Wetherspoon to open 250 pubs, creating 10,000 jobs.

Source: The Guardian 2 December 09.

10,000 new pub jobs in pipeline

Source: Daily Star 2 December 09.

1.15 RESEARCH PROBLEMS

“Identifying a suitable research problem is one of the most important but a

difficult phase of research process. A research problem is exactly that a

problem that someone would like to research. A problem can be anything that

a person finds unsatisfactory or unsettling a difficulty of some sort, a state of

affairs that needs to be changed, anything that is not linking as well as it might

problems involve areas of concern to researchers, conditions they want to

improve, difficulties they want to eliminate, questions for which they seek

answers.”

Source: Kumar, R. (2008), Research Methodology,

APH Publishing, New Delhi.

Research problems:

1. What is strategy and why it is imperative for business objectives?

2. How top down strategic model can improves the performance of an

organization?

3. What is the present financial practice of JDW’s

financial strategies?

4. What is the consequence of strategies to achieve organization goal?

1.16 SITUATION ANALYSIS

Once JD Weatherspoon has specified its objectives, it begins with its current

situation to devise a strategic plan to reach those objectives. Changes in the

external environment often present new opportunities and new ways to reach

the objectives. An environmental scan is performed to identify the available

opportunities. The situation analysis therefore involves an analysis of both the

external and internal environment.

The external and internal analysis considers the situation within the firm itself,

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such as:

• Company culture

• Company image

• Organizational structure

• Access to natural resources

• Position on the experience curve

• Operational efficiency

• Operational capacity

• Brand awareness

• Market share

• Financial resources

1.17 RESEARCH STRUCTURE

1 CHAPTER 1

Chapter 1 This part includes background and rationale of the study. It also

includes aims and objectives, research questions and conceptual model.

2 CHAPTER 2

Chapter 2 Included l i te ra ture rev iew (strategy, strategy

objectives, performance management,management control,

balanced score card, budget.

3 CHAPTER 3

Chapter 3 This part is for research methods, that includes

research plan, policy, process working in this study, reasons of

employing the

method

.

4 CHAPTER 4

Chapter 4 Includes data presentation and analysis, that includes

Introduction, employee data, customers’ data, direct observation,

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discussion and findings.

5 CHAPTER 5

Chapter 5 This part is for interpretation and conclusion that includes

findings review and conclusion.

1.18 CONCLUSIONS

Chapter 1 includes the purpose of the study, and that includes

the present recessionary climatein the pub sector

in the UK, JDW’s commitment to meet the

recession in this sector in the UK. This chapter also includes aim, and

objective of the research, research question, and conceptual model,

fundamental of financial performance analysis and research structure.

CHAPTER 2

LITERATURE REVIEW

PART 1 CONCEPT

2.11 INTRODUCTION

In today's highly competitive business environment, budget-oriented

planning or planning methods are insufficient for a large corporation to

survive and prosper. The firm must engage in strategic planning that clearly

defines objectives and assesses both the internal and external situation to

formulate strategy, implement the strategy, evaluate the progress, and make

adjustments as necessary to stay on track.

This research project investigates the use of new strategy in businesses.

Academic literature is reviewed on the development of the marketing

theory in selling, the benefits and risks of individual sales proficiency etc.

Primary research is based on the study of a focus group using

questionnaires; secondary research is based on the literature review.

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Conclusions are made about the effectiveness of marketing specially up

selling strategy for JD Wetherspoon Plc, Baxter’s Court, Pub 185.

The characteristic of pub and food industries marketing is to attract its

local customers and enter into a relationship with its prospective regular,

non-regular and visitor customers. In addition to its existing marketing

strategies, new sales techniques may also include reducing

operational costs, increasing customer loyalty, partner or channel

development, and market analysis.

2.12 STRATEGY

‘Ninety percent of business still fails to execute their strategies

because their leaders do not understand how to break each strategy

down into groups of activities and sequences of events that drive

the company steadily toward its desired goal. Beyond that, managers

often fail to prioritize these activities, assign responsibility for them,

and decide on measures of their success.’

Source: Morgan, Levit, Malek (2008), Executing Your Strategy, HBS Press,

USA.

Strategy has been defined in many ways. For example, strategy has been

described as a pattern of decisions about the organization’s future

(Mintzberg, 1978) which takes on meaning when it is implemented

through the organization’s structure and processes (Miles and

Snow,

1978). Johnson (1987, pp. 4-5) stated that strategic decisions occur at

many levels of managerial activity. They are concerned with the long-

term direction of the organization, the scope of an organization’s

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activities, the matching of organizational activities to its environment and

resource capabilities, the allocation of major resources within the

organization, and consideration of the expectations and

values of the organization’s stakeholders.

Corporate strategy is concerned with decisions about the types of

businesses to operate in, including what businesses to acquire or divest,

and how best to structure and finance the company (Johnson and

Scholes, 1889, p. 9). It is concerned with the way resources are focused

to convert distinct competences into competitive advantage (Andrews,

1980, pp. 18-19). Business (or competitive) strategies relate to each

business unit of the organization and focus on how individual SBUs

(strategic business units) compete within their particular industries, and

the way that each SBU positions itself in relation to competitors.

1 STRATEGY FORMULATION AND IMPLEMENTATION

STRATEGY FORMULATION

Once a clear picture of the firm and its environment is in hand, specific

strategic alternatives can be developed. While different firms have

different alternatives depending on their situation, there also exist generic

strategies that can be applied across a wide range of firms. Michael Porter

identified cost leadership, differentiation, and focus as three generic

strategies that may be considered when defining strategic alternatives.

Porter advised against implementing a combination of these strategies for

a given product; rather, he argued that only one of the generic strategy

alternatives should be pursued.

IMPLEMENTATION

The strategy likely will be expressed in high-level conceptual terms and

priorities. For effective implementation, it needs to be translated into

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more detailed policies that can be understood at the functional level of the

organization. The expression of the strategy in terms of functional policies

also serves to highlight any practical issues that might not have been

visible at a higher level. The strategy should be translated into specific

policies for functional areas such as:

• Marketing

• Research and development

• Procurement

• Production

• Human resources

• Information systems

In addition to developing functional policies, the implementation phase

involves identifying the required resources and putting into place the

necessary organizational changes.

CONTROL

Once implemented, the results of the strategy need to be measured and

evaluated, with changes made as required to keep the plan on track.

Control systems should be developed and implemented to facilitate this

monitoring. Standards of performance are set, the actual performance

measured, and appropriate action taken to ensure success.

DYNAMIC AND CONTINUOUS PROCESS

The strategic management process is dynamic and

continuous. A change in one component can necessitate a

change in the entire strategy. As such, the process must be

repeated frequently in order to adapt the strategy to

environmental changes. Throughout the process JD

Weatherspoon may need to cycle back to a previous stage

and make adjustments.

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DRAWBACK OF THIS PROCESS

The strategic planning process outlined above is only one

approach to strategic management. It is best suited for

stable environments. A drawback of this top-down approach

is that it may not be responsive enough for rapidly changing

competitive environments. In times of change, some of the

more successful strategies emerge informally from lower

levels of the organization, where managers are closer to

customers on a day-to-day basis.

Another drawback is that this strategic planning model

assumes fairly accurate forecasting and does not take into

account unexpected events. In an uncertain world, long-term

forecasts cannot be relied upon with a high level of

confidence. In this respect, many firms have turned to

scenario planning as a tool for dealing with multiple

contingencies.

2.14 CUSTOMER SATISFACTION

Keno’s model of customer satisfaction distinguishes six categories of

quality attributes, from which the first three actually influence customer

satisfaction:

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Figure – 2.2

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1. Basis Factors (Dissatisfies. Must have) – The minimum

requirements which cause dissatisfaction if they are not fulfilled, but do

not cause customer satisfaction if they are fulfilled (or are exceeded). The

customer regards these as prerequisites and takes these for granted.

2. Excitement Factors (Satisfiers. Attractive) – The factors that

increase customer satisfaction if delivered but do not cause

dissatisfaction if they are not delivered. These factors surprise the

customer and generate ‘delight’. Using these factors, a company can

really distinguish itself from its competitors in a positive way.

3. The factors that cause satisfaction if the performance is

high, and they cause dissatisfaction if the performance is low. Here, the

attribute performance-overall satisfaction is linear and symmetric.

Typically these factors are directly connected to customers’ explicit

needs and desires and a company should try to be competitive here.

The additional three attributes which Kano mentions are:

4. Indifferent attributes. The customer does not care about this

feature.

5. Questionable attributes. It is unclear whether this attribute is

expected by the customer.

6. Reverse attributes. The reverse of this product feature

was expected by the customer.

Strategy maps in Appendix 2 describe how an organization can create

value: by connecting strategic objectives in explicit cause and effect

relationship with each other. Strategy Maps are a strategic part of the

balanced Scorecard framework to describe strategies for value creation.

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2.15 IMPORTANCE OF FINANCIAL PLANNING

‘Financial planning allocates a firm’s resources to achieve its

investment objectives. Financial planning is important for several

reasons.

a. Financial planning helps managers’ accesses the impact of a

particular strategy on their firm’s financial position, its cash

flows, its reported earnings, and its need for external financing.

b. By formulating financial plans, management is in a better

position to react to any changes in market conditions, such as

slower than expected sales, or unexpected problems, such as a

reduction in the supply of raw materials.

c. Creating a financial plan helps management understand

the trade-offs inherent in its investment and financial plans.

2.16 STRATEGIC PERFORMANCE MANAGEMENT

Performance management is a strategic approach for monitoring how a

business is performing. It describes the methodologies, metrics,

processes, systems and software which are used for monitoring and

managing the business performance of an enterprise. Business

Performance Management, and Strategic Performance management,

and Enterprise Performance Management, and

Corporate Performance Management are all variations of the

terminology.

Main benefits of perform management helps to

Maximize value creation consistently.

Increase corporate transparency.

Facilitates communication on strategy.

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Improves internal communication on strategy.

Facilitates the improvement of decision making.

Helps to balance short-term, middle-term and long-term

tradeoffs.

Encourages value-creating investments.

Improve the allocation of resources, streamlines planning

and budgeting.

Better deal with increased complexity and greater uncertainty

and risk.

2.17 WHY DOES BUSINESS NEED A BALANCED SCORED CARD?

An organization’s measurement system strongly affects the behaviour of

people both inside and outside the organization. If companies are to

survive and prosper in information age competition, they must use

measurement and measurement systems derived from their strategies

and capabilities. The balanced scorecard retains financial management

as a critical summary of managerial and business performance, but it

highlights a more general and integrated set of measurements that link

current customer, internal process, employee, and system performance

to long term financial success.

BALANCED SCORECARD

In 1992, an article by Robert Kaplan and David Norton entitled ‘The

balanced Scorecard – Measures that Drive Performance’ in the Harvard

Business Review caused a lot of attention for their method, and led

to their business strategies.

‘The balanced scorecard provides executives with a comprehensive

framework that translate a company’s vision and strategy into a 15 | P a g e

coherent set of performance measures. Many companies have adopted

mission statements

to communicate fundamental values and beliefs to all employees. The

mission statement addresses core beliefs and identifies target markets

and core products.’

Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press,

USA.

The Balanced Scorecard method of Kaplan and Norton is a

strategic approach, and performance management

system, that enables organizations to

translate a company’s vision and strategy into

implementation, working from 4 perspectives:

1. Financial perspective.

2. Customer perspective.

3. Business process perspective.

4. Learning and growth perspective.

This allows the monitoring of present performance, but the method also

tries to capture information about how well the organization is

positioned to perform in the future. The details are discussed in

Appendix 3.

2.18 CONCLUSION

Chapter 2 described literature review that is an important issue for

the research work. In this section we try to discuss about strategy,

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strategy objectives, p e r f o r m a n c e m a n a g e m e n t ,

m a n a g e m e n t c o n t r o l , b a l a n c e d score card. In this chapter we

are also analyse the information about the recent internal strategic

history of pub 185, current internal strategic report.

3 RESEARCH METHODOLOGIES

3.11 RESEARCH OBJECTIVES

‘The purpose of research is to discover answers to questions through

the application of scientific procedures. The main of the research is to

find out the truth which is hidden and which has not been discovered

as yet. Though each research study has its own purpose, we may think

of research objectives as falling into a number of following broad

groupings:

a. To gain familiarity with a phenomenon or to achieve new

insights into it.

b. To portray accurately the characteristics of a particular

individual, situation or a group.

c. To determine the frequency with which something occurs or

with which it is associated with something else.

3.12 RESEARCH METHODOLOGY

‘Typically, any discussion of research method is dichotomized

and presented in either a quantitative or a qualitative category

because the two paradigms have been assumed to be polar

opposites and, among some, even separate and distinct scientific

absolutes.’

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Source: Newman and Benz (1998), Qualitative – Quantitative Research Methodology, Congress Publishing,

USA.

Research methodology is the concept of processes (Sarantakos, 1998); it

is the system in which one creates logic of the thing of analysis. Robson

(2002) stated that, the academic, political and thoughtful surroundings to

societal study and their propositions for study practice, and for the use of

particular research methods. The largely common methodologies

in societal sciences and humanities research methodology are

quantitative and qualitative research. (Morvaridi, 2005)

The first stage of the action research project involved convergent

interviews to the management levels to get knowledge of the current

strategic approach. The focus groups were held to use group

dynamics to elicit understanding on the research problem and research

issues. Their information will be analysed through content analysis and

use as input into the next action research stage.

The final action research will examine secondary data and

observation on the success or failure of marketing strategy in selling.

Detailed analysis of past marketing strategy in pricing result is

controlled by the strategic marketing manager in his role within JD

Wetherspoon Plc; careful analysis of selling strategy failure will be

made.

3.13 RESEARCH PROCESSES WORKING IN THIS STUDY

1 INTERVIEW

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An interview is a purposeful discussion between two or more people

( Kahn and Cannel 1957).The use of interviews can help you to gather

valid and reliable data that relevant to my research question and

objectives. However, interviews may help to formulate the research

question and objectives. In reality, the research interview is a general

term for several types of interview .This includes structured interviews,

semi –structured interview and unstructured interviews , respondent

interviews and informant interviews this fact is significance since the

nature of any interview should be consistent with research questions

and objectives .

The interview is clearly and completely a communication among the

interviewer and interviewee matter within which together contestants

generate and build story forms of the societal area (Silverman, 1997).

Records for example the corporation’s annual statement will provide as a

balance to the interviews, so as to have entrance to established

and printed data that widens over an extended period of time. This data

is considered as secondary data.

2 SECONDARY DATA AND OBSERVATION

Secondary research and observation are research techniques those are

often implicit in the data- gathering approach’ and “observation is

something we cannot fail to do as people, we are all expert observers”

(Hackley, 2003). Furthermore, participant observation will be chosen as

“it puts the researcher where the action is” enabling them “to

experience the lives of informants , one optionis to observe consumers’

behavior and their conversations in an actual store Meiselman, 2000; ).

The objective through a survey is further common plus the

required responses are of a broader environment than by case

analysis (Creswell,

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2002). Surveys can together consist of prearranged interviews and

official questionnaires. Within this situation, equally official

questionnaires have been managed and a thoroughly interview survey

has been performed.

3.14 CAUSES FOR EMPLOYING THIS METHOD

A questionnaire-depend method can be a very well-organized process.

Information gathering and investigation are simpler and speedier than is

attainable through interviews. Conversely, it is able to acquire

quantitative information about consumers’ reaction about online

business (Bell, 1999). The success of the method based totally on the

feature of the questionnaire answers acquired. This sequentially

depends on the attentiveness, goodwill and stage of understanding of

respondents. Earlier the chance of individual get in touch with

respondents is fewer time- consuming for the researcher.

In contrast, interviews present a well-off basis of information, which

presents the researcher with thoroughly information how persons

observe a certain circumstances or incidence, information which may

not be available employing more quantitative methods or still

observations by way of slight or no contact. In isolation, they present

a nearby into the range of views, or to set up approaches so as to

structure hypotheses concerning the fundamental motivations of the

interviewee (Gilbert, 2002).

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3.15 LIMITATIONS OF THE STUDY

One of the major weaknesses of questionnaire is be short of deepness

and detail information. As soon as researcher distributes the

questionnaire via the post or e-mail, is the regularly small answer rate

(Bell, 1999). Wrongly

filled out questionnaires or still lost responses, will not provide the quality

of the information attained to complete research aims.

A further restriction of questionnaires can originate in the

constitution of the process itself. Questionnaires usually give unspecified

common information of the topic being examined and force the

respondent to response problems that he/she may be uninformed.

On the more realistic area, a large-scale study employing many of

interviews to get primary data can establish to be an expensive

and period-consuming matter. The disadvantage is that it presents huge

quantities of information to investigate, much of whose importance

and effectiveness is hard to recognize.

3.16 ETHICAL ISSUE OF RESEARCH

Consumers were firstly observed without interruption, allowing their

natural behaviour will be recorded. Only once they complete their actual

purchase decision, the researcher will approach them .Such a method

has a clear ethical advantage as consumers can choose to

decline to participate if they do not want to disclose information

regarding their purchase choice. When developing an understanding of

consumers’ behaviour, it is important to ask consumers why they are

carrying out a certain action. Indeed, some researchers maintain that

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the richest data come from informal conversation between the

researcher and the informants. Those shoppers who will picked up a

product to purchase were intercepted as they walk away from the

cabinet and will be asked to answer a few short questions regarding

their purchase choice.

CONCLUSIONS

Chapter 3 explained about research methods. It also explained the

research plan i.e. primary vs. secondary data, classification of research

data. It i s explained h o w t h e r e sea rch p rocessed i n t h i s

study and also explained the reasons for employing proper research

method, limitation of the study, and ethical issue of the research.

4 ANALYSIS OF THE FINDINGS

4.11 Findings and Analysis

PRIMARY DATA ANALYSIS

This part has divided into two parts, first part will be begun with the

findings from the manager’s interview, and the interview has conducted in

branch (Buxter court) of JD Weatherspoon in London through small

session. The interview has taken from two mangers (manager and

Assistant Manager) and also the author has taken interview from the area

manager see in Appendix 5.

According the question no 2 managers of JD Weatherspoon, it was the

biggest new product launched in JD Weatherspoon’s products. They have

also included the new Bistro line of “Bar quality” which contains of 23

products designed to appeal shoppers to drive them into the food court of

JD Weatherspoon.

According to question no 3, the above findings have showed that all the

three interviewees are agreed that new strategic development is the

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revolution in 21st century in terms of fulfilling customer’s needs and

desires and overall satisfaction. This study found form the secondary data

that J D Weatherspoon has been striving to crate values for customers

which lead to earn their lifetime loyalty. J D Weatherspoon believes its

success depends on the people, the people that work with them and shops

with them (Govin and Lacy, 2011). If J D Weatherspoon is able to provide

products and services according the consumers’ expectations then

consumers will go back to the superstore again and repeate purchase will

be done by the loyal customers.

The manager’s question no 5, clearly indicated that there are various

factors behind the new strategic development such as: to meet the

customer’s needs and wants which are dynamic in nature, new products

are been developed to ensure continuity of any business ventures through

making utilization of the idle and excess capacity thereby making better

profit.

The question no 7, Manager’s question result indicated that Price is major

factor to determine the success of new strategic development which leads

to customer satisfaction. He further added that determining price levels

and pricing policy affects revenues and consumer demand and thus

remains one of the most important elements in determining profitability

and market share.

SECONDARY DATA ANALYSIS

‘Any data which have been gathered earlier for some other purpose are

secondary data in the hands of researcher. In contrast those data

which are collected at first hand either by the researcher or by

someone else especially for the purpose of the study are known as

primary data.’

Source: Kumar, R. (2008), Research Methodology, APH Publishing, New

Delhi.

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JDW Record first-half profits, a successful refinancing and the

reinstatement of a dividend”

Highlights:

o Turnover up 4.1% to £488.1m (2009: £468.7m)

o Profit before tax up 41.4% to £36.2m (2009: £25.6m)

o Profit before tax before exceptional items* up 17.5%

to

£36.2m (2009: £30.8m)

o Free cash flow per share of 15.3p (2009: 28.2p)

o Total and special dividends per share of 19p (2009: 0p)

o 17 pubs opened; 2 closed; total now 746

Source: JDW Interim report on 11 Mach,

2010.

In 2009, the average number of people directly employed in JDW

was

20,357 and it was 19,703 in 2008. Of the full time equivalent

managerial

/ administration employee was 3,199. Full time hourly paid staff

was

8,353 and total (full time + part time) hourly employees were 17,158

and were 16,631 in 2008.

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The ordinary shareholdings at 26 July, 2009 was: number of

shareholders was 5,231 nos. and number of share issued 138,974,009,

and 69.73% of total shares held with over 1,000,000 nos. share

category.

The share price was 450.00p on 26 July, 2009 and 231.25p in 27

July,

2008

.

Year 31 July,05 31 July,06 31 July,07 31 July,08 31 July,09Revenue £m 809.9 847.5 888.5 907.5 955.1

Operating profit 71.5 83.6 91.1 90.5 97

Profit before tax 47.2 58.2 62 58.2 66.1

Table

4.11

Source: JDW Annual Report,

2009.

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5 PUB 185 SALES – FOOD – (FROM AUG, 09 TO FEB, 10)

The food sales for the period were £ 186,702 and budget for the

period was £ 170,611. Last year the sales for the same period were £

165,925. So

the pub achieved its forecasted food sales for the period.

6 PUB 185 GROSS PROFIT – (FROM AUG, 09 TO FEB, 10)

The gross profit for the period was £ 417,101 and budget for the

period was £ 378,906. Last year gross profit for the same period was £

359,917.

So the pub achieved its forecasted gross profit for the period.

7 PUB 185 PUB PROFIT - (FROM AUG, 09 TO FEB, 10)

The total pub profit for the period was £ 87,956 and budget for the

period was £ 64,455. Last year the pub profit for the same period was

£ 55,088.

So the pub achieved its forecasted pub profit for the period.

4.12 DIRECT OBSERVATION

Direct observation has chosen in this research to allow the researcher to

acquire the live observed experience to evaluate directly from his

personal

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observation and evaluating experience.

The researcher also visited the following local pubs to compare

the observation and the experience with pub 185.

o Marie Lloyd

o Old Ship

o The Cock

o The Globe

o The Railway

Traven

1 PRICE OBSERVATION

The price of all products in pub 185 is very cheap in compare to all

local pubs.

2 QUALITY OBSERVATION

The researcher’s own experience in compare with the said local pubs,

the quality of the products is very good in pub 185 and all products are

stored in a perfect temperature, which is a quality. But the all other local

pubs are not maintaining perfect temperature in all products.

3 SERVICE OBSERVATION

The service and presentation practice of the pub 185 is above

the standard.

4 CLEANLINESS OBSERVATION

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According to shopper’s report, he /she put 100% for cleanliness and

the researcher agree with the report as the pub is clean apart from

some exceptional situations.

5 OTHER OBSERVATION

The researcher’s own experience while working in pub 185 is that the

turnover of the staffs is very high here. And all the new staffs need on

the job training for the better performance of the working team. It is to

be noted that staffs are needed to be trained in updated product

knowledge.

4.13 SALES FORCE REPORTS

Sales force reports represent a rich and largely untapped potential

source of marketing information of JD Weatherspoon. Sales personnel

do generally not report valuable marketing information.

Sales personnel often lack the motivation and/or the means to

communicate key information to marketing managers

4.14 MISCILLENAOUS REPORTS

JD Weatherspoon sells a variety of distinct products to identical or

similar target markets. An analysis of the media habits conducted for

one product could be very useful for a different product that appeals to

the same target market. Again, this requires an efficient marketing

information system to ensure that those who need them can find the

relevant reports.

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4.17 CONCLUSIONS

This chapter showed the data presentation and its analysis. In above I

discussed about findings of the management interviews, observation

analysis and secondary data. Presentation of the findings shows rating

on strategy, quality, service, maintenance, atmosphere, price and

safety. Secondary data shows the JDW’s revenue, operating profit and

profit before tax (2005 to 2009).

Analysis of the findings chapter explained the analysis of direct

observation on strategy on price, quality, service, cleanliness and

others. Interview analysis focused on pub 185’s price of the product,

quality of the product, service practice, cleanliness, and recommending

necessary improvement of pub 185.

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Appendix 1:

Business strategy diagram analysis:

For any given objective there is normally a series of alternative

strategies which may be seen as being viable ways of achieving the

objective.

Business strategy

The

business

The

business

The

Strategic

market

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Figure 2.1

Types of strategy

Figure 2.1a

Source: Segal-Horn (1998), The Strategy Reader, Blackwell Publishing,

UK.

‘To take a perhaps over-simplistic example let us assume that your

objective is to get from your home in London to Your corporate

headquarters in Brussels. There are obvious, a number of alternative

strategies for achieving this objective. You could drive from London to

Dover, you could then pick up the ferry from Dover to Calais and drive

through France to Belgium and Brussels. You could take the Dover to

Zeebrugge or Ostend ferries and drive down from there. Alternatively,

you might decide to a train at London, travel through the Channel

Tunnel rail link direct to Brussels. You might decide to fly so you travel

from London through to Heathrow; Heathrow to Zaventem and from

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Zaventem to Brussels which may involve the use of trains or

taxies. You might even be one of those elite who have access to

company jet or helicopter. Whichever route you choose your preferred

strategy will probably be based on other aspects such as the time

available; the relatives desire to see other stops en route, the

convenience and timing of the schedules and so on.

Bringing the entire question back into the realm of business strategy,

the discussion and decision as an essential part of the process since it

clarifies top management’s views on the environment and the ways in

which it wishes its organization to operate. What is clear is that the

organization can, and ideally should, only choose one single

strategy to achieve its objective. Moving back to our travelling from

London to Brussels as an

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example, if there was to be a meeting and five different people had to

get Brussels, it they all took five different routes it would be most

unlikely that anybody would arrive at the same time and therefore the

meeting could not take place.’

Gill, J. and Jhonson, P. (1999) Research Methods for Managers , Paul Chapman, UK.

Appendix2:

Strategic map

Operational effectiveness v. Strategic planning

Figure – 2.2a

Source: Segal-Horn (1998), The Strategy Reader, Blackwell Publishing, UK.

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Figure – 2.3

Source: 12manage.com date accessed 25/01/2010, In the 2001 book ‘The Strategy-

focused Organization’, Kaplan and Norton transform their Balanced

Scorecard. In 1992 they introduced the Balanced Scorecard

in the Harvard Business Review as system to measure performance;

now they change it to a strategic management system. A lot of this

transformation was done by future emphasizing the so called strategy

map.

Appendix 3:

Balanced score card:

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Figure – 2.3a

Source: Kaplan and Norton (1996), Translating Strategy into action: The Balanced Scored Card, Harvard Press, USA.

FINANCIAL PERSPECTIVE

‘The BSC retains the financial perspective since financial measures

are valuable in summarizing the readily measurable economic

consequences of actions already taken. Financial performance

measures indicate whether a company’s strategy, implications, and

execution are contributing to bottm- line improvement. Financial

objectives typically relate to profitability – measured.’

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USA.

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Kaplan and Norton do not disregard the traditional need for

financial data. Timely and accurate funding data will always be a

priority, and managers will make sure to provide it. In fact, there is often

more than sufficient handling andprocessingof financial

data. With the implementation of a corporate database,

it is hoped that more of the processing can be centralized and

automated. But the point is that the current emphasis on financial

issues leads to an unbalanced situation with regard to other

perspectives. There is perhaps a need to include additional financial

related data, such as risk management and cost benefit data, in this

category.

CUSTOMER PERSPECTIVE

Recent management philosophy has shown an increasing realization

of the importance of customer focus and customer satisfaction in any

company. These are called leading indicators: if customers are not

satisfied, they will eventually find other suppliers that will meet their

needs. Poor performance from this perspective is thus a leading

indicator of future decline. Even though the current financial picture

may seem (still) good. In developing metrics for satisfaction, customers

should be analyzed. In terms of kinds of customers, and of the kinds of

process for which we are providing a product or service to those

customer groups.

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‘In the customer perspective of the balanced scorecard, managers

identify the customer and market segments in which the business unit

will compete and the measures of the business unit’s performance

in these targeted segments. This perspective typically includes several

core or generic measures of the successful outcomes

from a well-formulated and implemented strategy.

The core outcome measures include

customer

Satisfaction, customer retention, new customer acquisition,

customer profitability, and market and account share in

target segments.’


BUSINESS PERSPECTIVE

This perspective refers to internal business process. Measurement

based on this perspective will show the managers how well their

business is running, and whether its products and services conform

to customer requirements. These matrixes have to carefully design by

those that know these processes most intimately. In addition to the

strategic management processes, two kinds of business processes may

be identified:

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ܞ Mission-oriented process. Many unique problems are

encountered in these processes.

ܞ Support processes. The support process is more repetitive

in nature, and hence easier to measure and to

benchmark. Generic measurement methods can be used.

‘In the internal-business-process perspective, executives identify the

critical internal processes in which the organization must excel. These

processes enable the business unit to:

¾ Deliver the value propositions that will attract and

retain customers in targeted market segments, and

¾ Satisfy shareholder expectations of excellent financial

returns.’

The internal business-process-value-chain perspective

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Figure – 2.3b


LEARNING AND GROWTH PERSPECTIVE

This perspective includes employee training and corporate cultural

attitude related to both individual and corporate self-improvement. In a

knowledge worker organization, people are the main resource. In

the current climate of rapid technological change, it is becoming

necessary for knowledge workers to learn continuously. Government

agencies often find themselves, unable to hire new technical workers

and at the same time are showing a decline in training of existing

employees. Kaplan and Norton emphasize that ‘learning’ is something

more than ‘training’; it is also includes things like mentors and tutors 40 | P a g e

within the organization, as well as that ease of communication among

workers that allows them to rapidly get help on a problem when it is

needed. It also includes technological tools such as an intranet.

‘The fourth perspective of the balanced scorecard, learning and growth,

identifies the infrastructure that the organization must build to create

long- term growth and improvement.’


USA.

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MODEL OF BALANCED SCORE

CARD

The integration of these four perspectives into a one graphical

appealing picture has made the Balanced Scorecard method very

successful as a management methodology.

Figure – 2.4

Source: 12manage.com, date accessed:02/02/2010.

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Objectives, Measurements, Targets, and

initiatives

For each perspective of the Balanced Scorecard four things are

monitored:

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ܞ Objectives: major objectives to be achieved, for

example, profitable growth.

ܞ Measures: the observable parameters that will be used

to measure progresstoward reaching the

objectives. For example, the objective of

profitable growth might be measured by growth in net

margin.

ܞ Targets: the specific target values for the measures,

for example, 7% annual decline in manufacturing disruption.

ܞ Initiatives: projects or programs to be initiated in order

to meet the objective.

Appendix 4:

Strategy and

budgeting

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Figure – 2.4a

Source: Fabozzi and Drake (2009), Finances, Wiley Publishing, NJ.

1 CAPITAL BUDGET

‘Capital budgeting is a required managerial tool. One duty of a financial

manager is to choose investments with satisfactory cash flows and

rates of return. Therefore, a financial manager must be able to

decide whether or not an investment is worth undertaking and be able

to choose intelligently between two or more alternatives. To do

this, a sound procedure to evaluate, compare, and select projects is

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needed. This procedure is called capital budgeting.’

Source: Groppelli and Nikbakht (2006), Finance, Barrons Publishing,

NY.

STATISTIC BUDGET

Development of the statistics budget in the first step in budgeting.

It provides the basis for subsequent development of the revenue

and expense budgets. Together, these three budgets are sometimes

referred to as the operating budget.

The objective of the statistics budget is to provide measures of workload

or activity in each department or responsibility centre for the next

budget period.

3 EXPENSES BUDGET

With estimates of activity for individual departments developed

in the statistics budget, department managers can proceed to develop

expense budget for their areas of responsibility. Expense budgeting is

the area of budgeting ‘where the rubber meets the road.’ Management

cost control efforts are finally reflected in hard numbers that the

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department must live with – in most cases, for the budget period. Major

categories of expense budgets at the departmental level include payroll,

supplies and others.

4 REVENUE BUDGET

The revenue budget can be set effectively only after the expense

budget and the statistics budget have been developed. Revenues must

be set at levels that cover all associated expenses, plus provide a

return oninvested capital. This is a fundamental rule of finance and is

equally valid for voluntary, not-for-profit firms and investor-owned firms.

5 CASH BUDGET

The cash budget is management’s best indicator of the

organization’s expected short-run solvency. It translates all the previous

budgets into a statement of cash inflows and outflows. The cash budget

is usually broken down by period, such as months or quarters, within

the total budget period.

Appendix 5:

Question 1: Describe briefly about the strategic planning of JD?

The above question was asking two of interviewees but there was

separate session for area manager because he was not able to come at

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10.30 a.m. on 15th Feb 2011 but he kept his promise and given interview

at 4.0 p.m. in the same day.

Interviewee 1: He told in details that J D Weatherspoon has launched its

£1bn for development strategy in July 2019. According to him it was the

biggest strategy launched in J D Weatherspoon’s products. The new

product strategy has range expanded by 150 lines to 1,141 products.

They have also included the new Bistro line of “pub-quality food” which

contains of 23 products designed to appeal shoppers to drive them into

the food court of J D Weatherspoon. According to Hall and Wallop, (2010)

the J D Weatherspoon has launched biggest new strategic development

program and they have accepted to sales around £1bn per annum. They

have also stated that, all the new products were in Smart Price budget

and it has been categories in different segment which are: Premium Extra

Special range, the medium range and the standard range.

Interviewee Two: Assistant store manager was agreed with the store

manager but he mentioned that every thing has been managing under the

guidance of the main office, especially new strategic development.

Question 2

How successful was this product strategy from an overall

satisfaction of the customers?

According to interviewee 1, the concept of new product plays important

role gain customer satisfaction. He told that, their £1bn re-launched new

strategic development was very successful in order to meet customers’

demands. He mentioned that November last year their store has made

survey and found that 81% of the respondents were satisfied because of

number of new products in the store with very competitive price. This

finding is consistent with previous findings by Sukumar, (2009), he found

that the success of any commercial enterprise is depending on how they

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are fulfilling customer’s wants, needs and expectations. Customers are

not only buying products and they are only income source for the and one

of the biggest reason was new strategic development in accordance with

customer’s demands.

Interviewee 2: He further added that he was the one responsible behind

the survey and the result was very positive towards the relationship

between new strategic development and customer satisfaction.

Question 3: How successful was this new strategy from an overall

profitability standpoint?

Interviewee 1: He stated that the new strategic development is one of five

focus of J D Weatherspoon since September 2011 and the company has

targeted £1billion profit per annum from new products. He mentioned that

the year of 2010 was most successful profitable year despite difficult

economic downturn, the J D Weatherspoon’s profit was able to record

102.4% increase in net profits and the increase in profitability signifies the

cautious cost management and new strategic development. He added

that the new venture of new strategic development program has

contributed 11.5% in total profit.

Interviewee 2: he further added with agreed with interviewee 2 that traffic

of the store has been increased since J D Weatherspoon launched £1billion

new strategic development program. This store has 211 new products but

now it has increased more than 800 products in Ilford branch.

Question 4

When compared to your competitors, what was the level of

capabilities available to improve the manufacturing process for

the existing strategy?

Interviewee 1: He believe that the importance of competitive advantage

of any organisation is very important to maintain sustain business in the 49 | P a g e

21st century. Hence, J D Weatherspoon has own team to monitor

development strategy of the sub-contractor and maintain Total Quality

Management to maintain superior quality in accordance with customer’s

demand. He further added that, he was in training for three month in the

strategic development team to know how J D Weatherspoon is very keen

to have competitive advantages over the competitors and when the

author had asked him to describe a little further about the procedures of

the new strategic development. He described that, the first step of new

strategic development requires gathering ideas to be evaluated as

potential product options, followed by idea screening, concept

development and testing, market analysis, test marketing and finally

commercialisation.

Interviewee 2: He also told same thing

Question 5: What are the factors behind the strategic

development?

Interviewee 1: he says, there are various factors behind the strategic

development such as: to meet the customer’s needs and wants which are

dynamic in nature, Companies develops in order to explore the

opportunity that is available to them, new strategy are developed so as to

tight competitors in the market, new products are been developed to

ensure continuity of any business ventures through making utilization of

the idle and excess capacity thereby making better profit, new strategic

development increases the total sales volume of the firm and it also

increases its market share. Hence, he added that, J D Weatherspoon has

been successfully achieving reasons behind the new strategic

development.

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Interviewee 2: he further added that, to meet customer’s demand and

bring them into the store to purchase the products. Finally, the one of key

driver behind the strategic development is total customers’ satisfaction

because it leads to profitability.

Question 6: How do you assess and measure the perception and

satisfaction levels of your customers?

Interviewee 1: there are various firms adopting very seriously customer’s

focused strategy to achieve 360-degree view of the customer and it is

ambitious goal to achieve. J D Weatherspoon has been assessing and

measuring regularly the perception and satisfaction levels of the

customer. J D Weatherspoon has conducting a forum where customer can

view their opinions, suggestions and the company has changing the

operations in accordance with customer feedback.

Interviewee 2: as mention in question no 1, the store conducing regularly

survey in order to determine customer perception and satisfaction levels

of the customers and then the special team helps to assess and measures

the levels of the perception and satisfaction of the customers.

Question 7

What is the target retail price and how have you determine it?

Interviewee 1: he emphasised on the price and Price is major factor to

determine the success of new strategic development which leads to

customer satisfaction. He further added that determining price levels and

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pricing policy affects revenues and consumer demand and thus remains

one of the most important elements in determining profitability and

market share. Part of the pricing process involves the anticipation of

competitive reactions to price changes and its economic effects on supply

and demand. However, the mentioned various factors behind the target

retail price such as economic conditions, customer’s segments, costs of

the products and profitability.

Interviewee 2: There was no further added by interviewee 2.

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