Refocus on cost of Sales but with no Trade-off in the “Slow Food’” Ideology
For instance, the case study shows that Eataly business model sells Gragna Pasta at the rate of 7.5 euros for 500g, which is thrice the rate of other past sold in the market. Now Eataly convinces clients of their local sourcing and the need to healthy, so consumers would not have heeded to the price. Price is an important factor especially in the context of the economic recession. It was stated that in Piedmont, the estimated average disposable income was 18,000 euros (Ali et al., 2013). Nevertheless, after the recession, the Eurostat is not able to register such disposable income for Eataly. Eataly in order to retain its customers and sustain in its initiative it will have to work on a better cost plan
Eataly has been valued at 618 million Euros as of 2016. In terms of global sales, it has shown a record profit of 380 million euros and core profits in the 2015 financial year was 30 million euros (Reuters, 2016). According to the BCG matrix quadrants, the company can be placed in the Stars category. Internationally, the food market is a high growth market especially now (Guta, 2017). The food conservation movement aims at the responsible use of food with emphasis on sustainability. This is a concept that is fast growing in popularity. Eataly operates in the right geographic regions and hence has a high growth market with a high market share. To ensure that it would not fall to a cash cow state where consumer retracts from buying the products because of its high prices, its is recommended that the company refocus on the cost of sales (Humphrey & Schmitz, 2000; Roth et al., 2008). By this way it can afford to be strategically consistent in following the “slow food” ideology.
Eataly strategic consistency was analyzed with respect to its external environment and internal environment. It is situated in a high-quality market positioning. In order to sustain its position, it will be necessary for Eataly to work on reducing costs to customers with no reduction in value (the slow food ideology). In order to do this, it has been recommended that Eataly revamp its supplier relationships within the clusters and also reduce the costs of operating the restaurant.
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