Introduction to Management Assignment 3

Case Analysis: Food Service Belegaria

by
Pham Viet Tuan
Student ID: S3977762

Lecturer: Aemin Nasir

School of Business and Management
I. Case analysis
1. External environment

External environments are ‘all outside factors and influences that impact the operation of a
business and to which an organization must respond or react so as to maintain its flow of
operations.’ (Bright et al. 2019). It is apparent that FSB is generally withstanding the effects of
these unexpected elements: the aftermath of the global pandemic, and the crisis in Ukraine.

1.1. Environmental factors

Rastogi and Trivedi (2016) stated that environmental factors include but are not limited to
climate conditions, and in this case is Covid 19, which is a disease that was transmitted from
animals to humans. Like many other businesses, FSB’s operating system had to face multiple
challenges before and after the pandemic had ended. Being a food distribution company, the
main target customers of FSB are B2B customers. However, the earlier lockdown has left many
eateries struggling to reopen and was forced to close permanantly. With the sudden closure of
those businesses, FSB is put in a perilous situation as a number of their regular customers has
now gone down significantly. Even with the rises of multiple local restaurants afterwards, FSB
still saw a decrease in profit and orders. What’s more, the pandemic also shifted the behaviour
of Belegarian people in terms of their eating habit, creating a new trend of online food delivery
system or e-commerce. This trend is still going strong even after the pandemic because of its
convenience, safety and cost efficiency, prompting restaurants to reform their operation systems
to match consumers’ demands.

1.2. Political factors

According to Rastogi and Trivedi (2016), political factors focus on elements that dictates
how a government may have an impact on the economy or a particular industry. The situation of
the FSB case express the same similarity as tensions between Ukraine and Russia dealt a huge
blow to the global economy and skyrocketed the prices of oil. Multiple financial sanctions were
brought in by the West to Russia’s economy after the invasion. These punishments created a
shortage of fuel as Russian gas ‘normally accounts for about 10% of global oil supply’ (Menon
2022). In due course, the supply chain suffered major holdback due to the sky-high gasoline
prices. Late arrival of deliveries has made fresh and frozen products damaged or expired,
which caused FSB a burden in their logistic inputs.

Furthermore, waves of people fleeing from the warzone to Belegaria has also pressured the
community to support and taking good care of them. If the refugee number keeps increasing in
the future, the economy will surely be affected in general and FSB as a part of it will also suffer.
2. Internal environment

Regardless of the unavoidable external factors, the managers should still be held
accountable for dealing with the situation. IFS's involvement in this period is somehow slowing
down Mr. Bubba’s decision-making process, adding fuel to the already burning fire. Considering
the company is in need of flexibility and timely improvisations, this is extremely disadvantageous
for FSB because Mr. Bubba is the one who knows best about the company's operation system
as well as the political, economical and sociological status of the nation and local customers’
behaviour.

Moreover, FSB has always been used to running their business independently and
separately from the parent company. Therefore, the new policies of tightening decision making
in this unstable situation (when changes in local political, economy, etc. might happen out of the
blue) will not only take management team time to adapt but also might cause FSB losing their
businesss opportunities. It is apparent that the organization is trying to operate using the
hierarchical structure, which, as stated by Nouri(2019), ‘are prone to bureaucracy and tend to
experience communication silos and a lack of collaboration across departments’.

II. Linking theory and practice solution

1. Expanding stakeholder network

In regard to the insufficiency of orders, FSB should work with their parent company to
expand the customer base. Most of FSB existed customers are B2B companies and F&B
service facilities, meanwhile, the current situation of Belagaria requires changing and adopting
as soon as possible. Therefore, instead of struggling with the decreasing trend in demanding,
FSB can overcome by reaching out to business and retail customers. By applying the new
strategy, the organization can gain deeper control of the market and be more flexible with their
business model, combining both B2B and B2C.

Another solution is to collaborate with external stakeholders such as competitors in the

industry as well as the government to figure out what can be done to support local business
overcoming force majeures and customer’s new behaviour after the pandemic. A significant
example is the roaming industry in Vietnam. Back to 2017, the roaming floor price regulation by
the Ministry of Information and Communication was so much higher than other countries which
caused Vietnam mobile operators to suffer a dramatic decrease in both traffic and revenue from
B2B and B2C customers. Therefore, they decided to make a petition together to ask
Government removing such regulation..

2. Modifying the company framework

 In order to reduce bureaucracy and boost empowerment, the corporation should convert
their organizational structure to fit the circumstance. Instead of applying the old, traditional
hierachical structure, IFS can modify the corporation to follow the organic structure. Indeed
Editorial Team (2022) described organic structure as flexible with internal communications
flowing in a horizontal fashion. An organic system creates a welcoming and open environment
where all the opinions of employees matter. In these times of uncertainty, it is essential for
employees to have their voice heard. It’s not only a way to relieve their stress from the tensity
from the war and pandemic but also give them the chance propose new ideas for company’s
business. In terms of decision making, any time-consuming factors will be eliminated as the
nature of organic structure encourage teamwork and value the use of verbal communications
more than informations in manuscript. (Leonard 2018)

3. Enhancing the supply chain management

The logistic department should be equipped with more training and specialization to keep
up with the inconsistency of the current supply chain. Careful planning and preparation are
required to handle overdue shipment along with expired food. FSB should also reach out to
local suppliers and logistic companies to expand their supply chain network and increase quality
and preservation of their products. Diversifying the sources of products can help firms reduce
the transportation cost, which can be simplified by partnering with competitors to seek out the
most suitable suppliers in the market. (Sheehy 2022)

III. Recommendation
1. Implementing new facilities and products

In the first phase, the company can set up food trucks which sell fresh grocery around the
city to attract retail customers. The cost for this method is much cheaper than opening fixed
retail stores and it’s also an effective way to promote the brand which individual buyers might
not be familiar with. Moreover, company can collect information of the market demand and
consuming habits in the new normal era. Therefore, they’ll be able to make proper management
decision. After the first phase, FSB can extend the facilities to not only food trucks but also fixed
store (if it’s effective enough).

According to Le (2022), before the conflicts, Ukraine and Russian together accounted for
30% of the world’s wheat. Hence, with the new restrictions, wheat products exports from these
two countries have massively dropped. This is incredibly beneficial for FSB since they can
utilize Belagaria’s large wheat proportion and start boosting the sales of bakery and pastry
products as a temporary way to cope with the harsh situation.

2. Collaboration

As mentioned above, FSB can strengthen their business through collaboration with external
stakeholders. The company can work with government to provide free food and supplies for
refugees aiding programs which helps to release stress to the community as well as boosts the
company’s image . Furthermore, FSB and competitors in the industry can collaborate to
organize promotional events with sales products and discount vouchers to not only stimulate the
demand but also attract customers having financial difficulties after the pandemic.

3. Applying IoT technology (Internet of Things) to supply chain management

Gillis(2022) defined IoT as a network of interconnected computing devices, mechanical and

digital equipments that grants users the ability to send data over a network without the need for
computer or human-to-computer or human-to-human interaction. Common example of this can
be found in smartphones, smart security system or medical sensors,… In terms of supply chain
management, IoT can simplify the process of locating goods, tracking movement and alert users
when there are delays. With IoT, FSB will be able to prepare for unexpected delivery disruptions
and be aware of their products’ conditions.

4. Frequent online internal communications

The New Normal has altered the working habit of employees and introduced organizations
to a new method for communicating internally which can be achieved through online meeting
platforms. On that account, IFS can host weekly online meetings to generate ideas and discuss
directions for the company. In addition to increasing work efficiency and reducing unnecessary
time in reviewing proposals from subsidiaries, meetings can also be a platform for employees to
give feedbacks and express their concerns. In return, managers can motivate and provide the
appropriate reassurance to make employees feel more secure.

REFERENCE LIST:

Bright P, Cortes A and Hartmann E (2019) Principles of Management, OpenStax.

Rastogi N and Trivedi M (2016) PESTLE TECHNIQUE – A TOOL TO IDENTIFY EXTERNAL

RISKS IN CONSTRUCTION PROJECTS, 03(01).

Menon S War and gas: What Russia’s war on Ukraine means for energy prices and the climate,
Environmental Defense Fund. https://www.edf.org/article/war-ukraine-driving-gas-prices

Fajth V, Bilgili Ö, Lochsmann C and Siegel M (2019), How do refugees affect social life in host
communities? The case of Congolese refugees in Rwanda.

Nouri C (2019) Hierarchical vs. Flat Organizational Structure and Benefits of Each, Pingboard,
accessed 15 December 2022. https://pingboard.com/blog/hierarchical-vs-flat-organizational-
structure-and-benefits-of-each/
Leonard K Organic Structure of Organizational Design, Small Business - Chron.com.
https://smallbusiness.chron.com/organic-structure-organizational-design-58657.html

Sheehy K (2022) 5 Ways Businesses Can Get Ahead of Stalled Supply Chains, NerdWallet,
accessed 15 December 2022. https://www.nerdwallet.com/article/small-business/how-to-
navigate-supply-chain-issues

Le L (2022) Xung đột Nga-Ukraine gây ra khủng hoảng lượng thực nghiêm trọng nhất từ năm
2008 , Tạp chí Kinh tế Sài Gòn, accessed 15 December 2022. https://thesaigontimes.vn/xung-
dot-nga-ukraine-gay-ra-khung-hoang-luong-thuc-nghiem-trong-nhat-tu-nam-2008/

Gillis A (2022) What is IoT (Internet of Things) and How Does it Work?, Tech Target, accessed
15 December 2022. https://www.techtarget.com/iotagenda/definition/Internet-of-Things-IoT