Business Strategy Assignment: Case Study Analysis Of Adnams
Read the case study of Adnams: a living company by Julie Verity and Kim Turnbull James and address the following parts in this business strategy assignment:
PART A case study questions:
- Discuss the strategic capabilities and core competencies of Adnam Brewing Company. How do they contribute to its success?
- Using Porters Generic strategies evaluate Adnam’s cost-leadership, focus and differentiation strategy.
- In what way do you think the organizational culture has contributed towards its success?
PART B is self-reflection
In this section you are required to highlight your key learning’s. Explain how your key learning’s will help you to become an effective strategic leader.
Adnams Brewing Company is a medium-sized company which is based in Southwold in Suffolk, UK with a turnover of about €65m. Adnams also operates hotels and pubs mostly in and around the city. The Brewing Company gradually increased its size in the market with its high proficiency skills, capabilities, and resources in order to achieve a competitive advantage so that it can survive and maximize its value over the period (Teece et al., 2016). Few strategic capabilities and core competencies helped him to succeed in the market. The company provides its customers with the quality product and service, listens to their requirements, meets the demands successfully with diverse skills of production.
- Connection with the city- Everyone can recognize with the name itself from the place the company belongs. The strong connections that he has formed over time with the city have helped him to increase his business growth and gain a competitive advantage (Teece et al., 2016). The visual identity of his company has also helped him to reach the top. In 2003, Simon Loftus who is a chairman and partly owns the company launched an advertising campaign called ‘Beer from the coast’; it helped him to reach out to diverse consumers in a short period.
- Family connection- Both Loftus and Adnams had strong family connections in the business and for 250 years they have run the business together, invested together, and overcome all the challenges together. This family connection has helped Adnams to grow his business successfully.
- Customer connection- He grew a strong connection with the customers with the help of Loftus. Loftus's idea was to shorten the distance between Adnams, his customers, and suppliers to build a strong connection with them. This helped them to communicate properly and maintain a strong family relationship with them (Teece et al., 2016). This helped the company to build its profile and fulfill the demands.
- Internal connection- He made such a great connection with his employees that they feel proud to work with him. This helped the company to increase production and build strong relations with the employees to increase the growth of the company.
As per Johnson et al., (2017), the strategic capabilities and core competencies have played a major role in the success of Adnams. Strategic capabilities have assisted Adnams with the ability to employ all its expertise, competencies, and assets to achieve competitive benefits. This increases the survival instincts of the enterprise increasing its value over time. As per Irtaimeh, (2018) Core competencies provide the benefits of having long-term competitive preferences. Such competencies have created a bridge between the performance of Adnams and its opportunities.
The major contribution of capabilities and competencies in Adnams’ is the reduced staff turnover. Since people have a sense of belonging and the existence of interpersonal relationships has kept the turnover low. Moreover, the sense of stability prevails in Adnams’ despite the fact of it being a medium-sized Enterprise. Leadership skills are also emphasized to encourage the constant adaptiveness and survival characteristics of the Enterprise. Karen, then director of Adnams, encouraged the need for communication. She interacted with the brewery staff once a month to enable better interactions.
Adnams' middle-sized Brewing and Distillery Enterprise is struggling to outlast in the long run. The business is determined to enclose competitive advantages, commercial administration, planning competencies, and capabilities. Also, its strong local grading has brought in customer loyalty, cultural benefits, and decision-making in the favour of increased revenue (Johnson et al., 2017).
Referring to Porter’s Generic Strategies, it can be said that an enterprise itself locates its position through resilience. According to the strategy the strengths of an enterprise can be categorized under cost-benefit and differentiation. The application of cost advantage and differentiation into the target scope 3 generic strategies outcomes are retrieved. The three generic strategies are cost leadership, differentiation, and focus.
According to Islami, Mustafa, and Latkovikj (2020), the utilization of the generic strategies into Adnam's brewing and distillery business can bring in several benefits. The enterprise has an effective distribution which is internal strength and helps the growth. Adnam's business has more focus on beer. It is sold through different licensed pubs and directly through shops and hotels to autonomous pubs. Beer is also sent to large companies with pubs and distributors. Supermarkets and off-trade outlets are also a major focus. Also, the manufacturing process of the enterprise is highly skilled along with designing the products. These factors have helped in the success of the cost leadership of the firm.
Differentiation strategy demands the development of the product which provides a uniqueness that is appreciated by customers. The need for innovation was duly recognized by Adnams. In the year 2010, the ‘Good Pub Guide' acknowledged the uniqueness provided by Adnams with the seasonally changing range. Andy Wood, then the chief executive of the business had faith in innovation and highly encouraged innovative minds. Also, the scientific research and creative product devolvement added to the success of the Enterprise.
A focus strategy makes efforts to either obtain cost advantage or differentiation incorporating a wide range of product evolutions into a narrow market accounts for success in focus strategy. According to Johnson et al., (2017), Adnams however had the distribution center stocking 3000 lines. They distributed spirit, mixers, bottled mineral waters, and other requirements throughout the estate.
However, Viltard, (2017) highlighted the application of Porter’s Generic Strategy into Adnams demonstrating 3 issues. Firstly, there was the need of incorporating a competitive strategy into a small and mid-size enterprise (SME). Adnams, being an SME, can be criticized for adopting a competitive strategy. Since the competition is approaching heights, constant adoption of a particular strategic plan can be harmful to the Enterprise. Secondly, the choice of the strategy adopted by the Enterprise influences the ultimate performance. The combination of cost leadership, differentiation, or focus strategy may extract ineffective outcomes also adversely affecting the performance. Adnams have not however inculcated the focus strategy to a higher extent keeping them protected. Lastly, the issue was the lack of any practical evidence demonstrating the use of a particular strategy for a longer period by an SME.
Adnams’ Brewing company maintains a good organizational culture that has helped to increase its size in the market. The company achieved its goals successfully because of its strategic thinking and potential skills in order to reach out to its customers and increase its profitability (Froehlich et al., 2017). Adnams always maintained a strong connection with his employees and they used to feel proud of working with him. They never used to feel that they are working in a company rather they felt a homely bonding with the company.
The work culture was very flexible, he never used to put strong rules and guidelines on his employees that are why employees loved to work in his company which resulted in an increase in productivity and contributed towards success. Communication is an important aspect of the organization; the business operator is used to maintain a proper relationship with the staff by communicating with them properly (Froehlich et al., 2017). Adnams always thought that with the help of communication he can get all the information that was beneficial for the company. Every day he used to communicate with the design and distribution staff so that every work remained in sync and contributed towards the success of the company.
The customer service team used to listen to the customers and solve their problems with great efficiency, constant feedback from the customers they used to take which again helped the company to resolve the issues within less time (Froehlich et al., 2017). He also used to maintain a connection with his tenants who were the tied estate of him. He always welcomes their ideas even if they do not have any direct connection with the company, this helped him to gather diverse ideas of diverse entities and made the company a successful one. Being a mid-size company, it increasingly grew in the market with all the strong connections which he made over the years, and also the outside influences helped him to succeed.
Every employee talk about the culture of the organization, Adnam’s main priority was to give respect and feel proud for them, the confidence that he used to have inside him made the employees feel connected to the company and helped the company to grow. Another important aspect is teamwork, he always believed in teamwork and trained his employees to work accordingly which helped him to increase productivity (Bhatia and Bhatia, 2019). The flexibility in the organization, bonding with the employees, and good communication all these factors helped his company to reach the target and gain a competitive advantage.
Listening to the customers and meeting their demands is another factor. Believing in the employees and taking them as an asset also helped him to grow his company. The organizational culture was based on respect and pride, this helped the company to increase productivity and maximize profitability in a huge manner (Bhatia and Bhatia, 2019). Also taking ideas from diverse entities and implementing them successfully helped to build its profile and enhance the decision-making process which led to the success of the company.
The success of a company depends on numerous factors. From my syllabus, I learned that a company needs to apply several strategies for achieving its goals. It is vital to identify where a particular product is previously popular and the business should be run there according to strategy. Behind the acceleration of the growth of a company, this plays a very important role. In the course, it is mentioned that a company needs to maintain a great connection with the city. Sometimes, the companies are introduced with the name of the city. A company can grow several businesses closely connected to the primary one so that they can help one another and get advantages. From the syllabus, I was informed that at a stake of a company joint service and stewardship can be prioritized and should be maintained in the long-run. The people by whom the company is mainly run should never lose the local connection. Various instances show us that a business has grown locally and the employees are also the local people. In such cases, it becomes easy for the customers to get the owners as they too live in the locality. To maintain a local identity for a long time is difficult but possible. Behind the sustainable existence of a company, a good connection with both the shareholders and the consumers plays an essential role. The customers and the shareholders are the two strong pillars behind success. Strategically according to the course, a company, ought to shorten the distance amongst its suppliers. This helps in achieving competitive advantages. To set up the business outside the pack can be proved to be innovative. The employers of the company need to be quite satisfied. This helps to get down the ratio of staff turnover in a company and the people working there feel a certain kind of ownership within. For me, apart from innovativeness, an organization mostly needs a strong internal relationship.
For the expansion of a company, the presence of a strategic leader is vital. To lead a real-life organization properly, I would like to apply the key learnings learned in the course. Every business item has a specific area for expanding. It is important to grow a business at a place where people are already having a demand for the product but scarcity or limitation of supply. I, as a strategic leader, would be proposing to my CEO to expand the business where the demand is high and the product has previously gained popularity. It will also help us in achieving competitive advantages in the present market. The surrounding locality also needs to be considered with great importance. I understood from the syllabus if the local people are given importance, they will support the survival of the company in the long run. They need to be employed and I would like to be present at that locality so that they can access me whenever they need it. The employees in my company will be treated as invaluable assets. They can help the most in becoming successful. Their needs will be understood. I have to be very careful and keep an eye on the staff turnover rate. It must not be very high. By using strategic leadership techniques, I will try to maintain a proper environment for work inside the organization. The strengths will be nurtured as well as the problems will be dealt with. Strategically, I will be focusing on the background of the place where the company is located. This will help in both ways to grow the company in the market and to receive better visibility amongst the consumers. The shareholders, the leaders, and the CEOs are to be in a relationship like a family. By sharing both the issues and achievements of the organization, they can share feelings for the company. From this, a kind of ownership relationship grows. I have to be innovative at every point of time so that the products get a newer look and a better quality. Keeping the suppliers nearby, the supply-chain of the company can be effectively managed. This will reduce the travel allowances too. I will have to be focused while setting the goals of the company. As a leader, I need to have higher objectives and the ambitions need to be real. For a strategic leader to understand the strength and troubles of every individual inside the organization is essential so that I can find the appropriate remedies on time.
Bhatia, R., and Bhatia, A., 2019. A Comparative Study on Models of Organizational Culture in Higher Education in India. research journal of social sciences, 10(6).
Froehlich, C., Bitencourt, C.C., and Bossle, M.B., 2017. The use of dynamic capabilities to boost innovation in a Brazilian Chemical Company. Revista de Administração (São Paulo), 52(4), pp.479-491.
Irtaimeh, H.J., 2018. Impact of Strategic Leadership Competencies on Enhancing Core Competencies in Organizations: Applied Study on AlManaseer Group for Industrial & Trading. Modern Applied Science, 12(11), pp.169-180.
Islami, X., Mustafa, N., and Latkovikj, M.T., 2020. Linking Porter's generic strategies to firm performance. Future Business Journal, 6(1), p.3.
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Viltard, L.A., 2017. Strategic mistakes (AVOIDABLE): the topicality of Michel Porter’s generic strategies. Independent Journal of Management & Production, 8(2), pp.474-497.