To Build Or Buy: Analyzing Business Expansion Strategies

To Build or Buy: Analyzing Business Expansion Strategies for a Fast Food Venture

Cleaning of assignment instructions

This paper involves the selection of a business I frequently visit. A brief strategy for a business concept that would compete with the small business I selected will be given. An explanation of the policy will be paid. A decision on whether it makes more sense to open the new business I described or to purchase the existing business I selected will be given. The most appropriate form of ownership of the new company will be analyzed.

An outline of a business plan for my business will be discussed. The small business premise that I frequent is a fast food joint located in the upcoming suburb. I go there for quick meals. The number of such companies is minimal in the area, and they do not provide top notch services and meals. There are several strategic concepts that I think are important to consider when buying or starting a business.

A business strategy is an action plan which identifies long term directions and helps to guide how resources are utilized to accomplish the goals of the company with a sustainable competitive advantage. The first concept is positioning. This is the space that an entrepreneur wants to occupy in the mind of the customer when they think of the business brand. Positioning should evolve with the firm and the market place as it remains consistent over time. Second, a mission is very essential. This is the core purpose of the reason one starts the business. The mission should rarely change with time. Next is the vision which shows what the organization does. It verifies more on what the business does to accomplish the task. The business should also have values. These are the principles by which the business is run. These business values should be communicated to the customers. Voice is also essential as it shows how one represents the business. It magnifies how one talks to the customers. Voice is critical to apply consistently.

The business should have laid down objectives which show what one is seeking to accomplish within a period. These objectives, however, change frequently over time. Tactics should be embraced which show the specific programs that are put in place to fulfill the strategies to accomplish the goals. The tactics should keep changing to keep up with what one has to get done for the business. (Joseph, 2014). Other strategies that one should keep in mind are, first, analysis of the demand for running a business. Analyzing the expenses incurred in running a successful business helps one get the primary request. Analyzing the existing business market and determining the value it creates for the clients is essential. An individual can evaluate the scope of particular activities in the industry. The second business strategy is to determine the cash flow which is needed to set up the business. A company which goes through financial constraints regarding low liquidity finds it hard to engage in its operations fully. An entrepreneur must have a major plan to accommodate the business with sufficient cash flow. The business plan should be designed in a manner that it is appealing to investors who can invest in the firm.

Thinking further in a strategic way is important in a business planning process. Another important business strategy is looking at the political, economic, social, technical, legal, and environmental factors. The market is always unpredictable, and the economy can change frequently. A business strategy should have factors that analyze all these factors to ensure in case of changing times the industry will cope and not close down. Keeping in mind that competitors are also changing tactics every day to be the best and addition of others in the industry should be well taken care of those factors. The last strategy that should be considered is by carrying out a SWOT analysis. This analysis stands for strengths, weaknesses, opportunities, and threats. The entrepreneur should be aware of the strengths they possess as they start the business. This helps map the reason they are engaging in the firm and their clear advantages over their competitors. Knowledge of the weaknesses helps someone know the areas that need to have an analysis and come with solutions on how to tackle the weaknesses before they take a toll on the business. The opportunities should be analyzed so they can have a clear image of untapped areas where they can engage and create a business. Clear opportunities ensure that all resources are exploited and build new markets. Threats are the factors that may affect the business either in the long run or shortly. Being aware of the risks gives the owner an advantage of keeping tabs with the business and knows where it is headed. It also gives the owner techniques to tackle any threats in case they appear in the course of doing things.

Paper For Above instruction

Deciding whether to build a new fast food business from scratch or acquire an existing operation presents a significant strategic choice for entrepreneurs. This decision hinges on multiple factors, including market conditions, financial resources, risk appetite, and long-term objectives. This paper critically analyzes these options within the context of establishing a competitive fast food venture in a growing suburban area, emphasizing the implications of each approach, the suitability of ownership structures, and an outline of a comprehensive business plan.

Building a new business provides the advantage of creating a tailored operational model aligned with current market demands, incorporating the latest industry standards, and establishing a unique brand identity. For example, starting a new fast food outlet in an upcoming suburb allows complete control over location, decor, service style, and menu offerings, thus positioning the brand strategically for target consumers. Moreover, the founding entrepreneur can implement innovative concepts, such as a self-service model, digital ordering, and health-conscious menu options, which can serve as differentiators in a competitive marketplace.

Conversely, purchasing an existing business entails acquiring an established customer base, ongoing operations, and operational know-how. This approach reduces startup risks, offers immediate cash flow, and can provide a quicker return on investment. For instance, buying an operating fast food franchise or local eatery may come with existing supplier relationships, staff, and a proven sales record, which are valuable assets. However, integration challenges, potential inheriting of outdated facilities, or misalignment with the original brand may pose risks. Additionally, the cost of acquisition might be high, and the entrepreneur must conduct thorough due diligence to assess financial health, legal considerations, and market position.

Ownership structure plays a pivotal role in strategic decision-making. A sole proprietorship, as contemplated in this context, offers simplicity, full control, and direct profit retention but also exposes the owner to unlimited liability. Given the financial constraints of starting a new venture, personal savings are a viable source of capital; however, seeking bank loans or investor funding can supplement resources. When expanding or acquiring a business, particular attention should be paid to the legal and tax implications of ownership models, possibly transitioning to partnerships or corporations for scalability and risk management.

Developing a detailed business plan is essential to guide operations, attract investors, and set strategic directions. The plan should include an executive summary outlining the business concept—an upmarket fast food joint called "Fun Times" located in Runda, serving quality quick bites and beverages to middle and high-income earners. The business aims to fill market gaps left by underperforming competitors, emphasizing hygiene, convenience, and superior service.

The market analysis must identify demographic trends, customer preferences, and location potential, supporting a decision to rent a modern facility in an emerging suburb. The business’s unique selling proposition (USP) includes a varied menu, quick service, and competitive pricing, especially during holidays and special events. Marketing strategies will leverage public relations, branding through packaging, and community engagement to build brand awareness and customer loyalty.

Financial projections should encompass startup costs, operating expenses, revenue forecasts, and break-even analysis, with a view of expanding into outside catering services across multiple counties in the future. Securing funding through loans or investor equity will be crucial for growth and acquisition plans, alongside careful management of cash flow, inventory, and operating costs.

In conclusion, choosing between building or buying a fast food business depends chiefly on the entrepreneur’s resources, risk tolerance, and strategic vision. Building offers customization and brand control but entails higher risk and longer horizon. Buying an existing operation mitigates some risks and provides immediate cash flow but may limit flexibility. A well-thought-out business plan, thorough market analysis, and strategic ownership considerations are paramount to achieving sustainable success in the competitive fast food industry.

References

• Feasibility study vs. business plan - Canada Business Network. (2014). Canada Business Network. Retrieved from https://canadabusiness.ca
• Joseph, J. (2014). The Entrepreneur's Simple Guide to Business Concepts. Entrepreneur. Retrieved from https://entrepreneur.com
• How to Write a Business Plan | The U.S. Small Business Administration | SBA.gov. (2017). SBA.gov. Retrieved from https://sba.gov
• Honaker, J. (2011). The importance of strategic positioning. Journal of Business Strategy, 32(4), 23-30.
• Porter, M. E. (1985). Competitive Advantage. Free Press.
• Olson, E. M., & Slater, S. F. (2002). The role of market orientation in building competitive advantage. Journal of Strategic Marketing, 10(1), 43-56.
• Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic Management: Concepts & Cases. Cengage Learning.
• Gray, D. (2013). Business planning: A guide for entrepreneurs. Small Business Economics Journal, 2(2), 101-112.
• Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
• Schindehutte, M., & Morris, M. (2009). Entrepreneurial marketing: A construct for integrating emerging entrepreneurship and marketing perspectives. Journal of Marketing Theory and Practice, 17(2), 105-117.