Sample Business Paper on Application of Value Chain Analysis and Competitive Advantage by Food Chain Outlets to Accomplish the Strategic Goals

Businesses especially food and beverage industries are experiencing an escalating
business rivalry in an attempt to meet consumers demand. The objective of this essay is to
provide a detail explanation of competitive advantage and value chain analysis in the food
and beverage industry. The essay includes detailing the competitive the two concepts,
traversing competition in Sydney and Australia food & beverage industry, and analyzing
how menu engineering is used to achieve profitability in the industry.
Competitive advantage from a food and beverage industry perspective is the unique
position of a business establishment in the market environment in comparison to its
competitors. However, the competitive advantage perception has changed to focus on
consumers expectations. From the customer’s viewpoint, competitive advantage refers to the
subjective opinion that a company is able to offer high value for the products offered to the
consumers (Szwacka-Mokrzycka, 2010). Therefore, competitive advantage means outdoing
competitors by identifying the needs of consumers and successfully satisfying the demands
to exceed their expectation. With the increased globalization and use of technology, it is easy
for consumers to identify exactly what they want and where to get it. Therefore, companies
need to develop products and services that make them distinguishable among their
Value chain in F&B industry entails the manufacturing and production of goods and
services. According to Gómez et al. (2011) food value chain refers the blend of all tasks
involved in the process of bringing farm products to the consumer (Gomez et al., 2011).
These tasks include agricultural activities, processing of farm products, storage, bringing
them to the market, distribution and ultimately, consumption. Gómez and Ricketts (2013)
cited that value chain analysis involves linking the actors involved in the food value chains

such as consumers, retailers, manufacturers and farmers (Gómez & Ricketts, 2013). It also
refers to examining the flow of food and beverage products from the farmers to the
consumers through manufacturers, distributors and retailers. Value chain analysis is an
important component in the F&B industry as it ensures that consumer needs are satisfied.
Sydney is unique for this study due to the rapidly growing population hence its
potential needs to be tapped to the maximum so as to enhance the social, environmental and
economic aspects of their citizens’ lives. Therefore, there is need for a balance between the
various agro-industrial and housing demand of the population. This has led to the growth of
the fast-food industry in the region and the emergence of unhealthy eating habits (Mason &
Knowd, 2010).
Sydney F&B industry is known by the prolonged competition between local and
imported products. According to Dixon and Isaacs (2013), the residents of Sydney perceive
locally produced food products to be very expensive, and prefer food from other parts of the
world that is cheaper and more appealing. Also, other factors such as decent housing and car-
reliance prevent them from prioritizing high-cost food from local producers (Dixon & Isaacs,
Hostility in advertising is evident in Sydney as every company struggles to achieve a
customer share among the huge populations. Outdoor advertising such as the Sydney Train
network is used by hundreds of companies to market their products since they reach a large
portion of the potential consumers. However, these advertisements often market unhealthy
products such as snacks, sugar-sweetened foods and beverages and intense-sweetened foods
(Sainsbury et al., 2017).  Basically, Sydney’s population growth has resulted to unhealthy
competition in the F&D industry. The companies no longer prioritize the health of the
consumer. They are focused on the appealing to the consumers.

The food and beverage business establishment has become highly competitive and
firms need to prioritize innovation so as to remain relevant in the market. Also, they need to
maintain quality customer relationship management (Chiu & Chang, 2016). Examples of
bars and upmarket restaurants that have invested heavily to achieve competitive advantage in
Australia include RockPool Dining Group and Berowra Wates Inn.
Rockpool Dining Group is a restaurant that has been in operation for nearly 25 years
and offers quality dining experiences to customers. The restaurant offers Australian food
from local farm produce with the aim of promoting Australia’s culture. The restaurant’s
brands include a wide range of cuisines. The uniqueness of the restaurant lies in its
prioritization for tradition (Tourism Australia, 2019). Similarly, Berorwa waters inn is a
restaurant that offers a wide variety of Australian menu. The produce from local farmers and
suppliers is used to make unique Australian menus. The uniqueness of the restaurant is that
dietary requirements are prioritized such as vegetarian, gluten free and dairy free. Australian
beverages are also provided in the restaurant (Tourism Australia, 2019). These restaurants
have taken advantage of the increased consumption of unhealthy imported food and
beverage products. They derive their competitive advantage from using local farm produce
to provide the best dining experiences. The strategy has enabled them to remain unique and
survive in the F&B industry.
Food and beverage outlets experience major challenges in balancing between the
needs of their customers and maintaining profitability. Most consumers visit restaurants and
food outlets to experience quality service and purchase quality food and beverage products.
Meeting the needs of consumers while balancing labor costs is quite challenging (Raab et al.,
2009). Menus play a vital role in simplifying operations while ensuring profitability and
quality of service.

Menu is a crucial component in the food and beverage industry. According to
Ozdemir and Caliskan (2014) menu is a core component in operation within the F&D
business environment (Ozdemir & Caliskan, 2014). It is basically a communication and
selling too. Menu labeling also plays an important role in influencing consumer behavior, and
health outcomes (Smith, 2015). Menu labeling and pricing needs to be done an informed
manner so as to ensure a balance between consumer satisfaction and profitability. Menu
engineering is an important solution to achieve the balance
Menu engineering is used to analyze the popularity of items against their profitability
(Raab, et al., 2009); hence can be used to increase potential profitability of menus (Linassi et
al., 2016). Menu engineering is technique that enables managers in F&B outlets to classify
items, analyses them, and decide on the items that should be retained o removed, increased n
price o put on promotion. It supports the consideration of impotent concepts such as
unnecessary cost, accounting activities and non-financial; measures. The tool is used to
measure the cost of expected labor in the preparation of each menu against its profitability
(Linassi et al., 2016).
In brief, business in the F&B industry has significantly been affected by globalization.
The industry has significantly grown due to as a result of low barriers to entry. Customers
have also diversified their needs and demands. Therefore, the acquisition and retention of
customers has become a major challenge for firms in the industry. Menu engineering is a
technique that every restaurant should adopt to ensure profitability.



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