An Analysis of the Moyo Case Study

Strategic Principles

Individual Project

AN ANALYSIS OF THE MOYO CASE STUDY

Introduction:

Yu (2004, p. 300) state international hospitality corporations develop strategic marketing guides for expansion in foreign countries. Strategic marketing takes a global and long term view in planning objectives for overseas operations. Environmental scanning is used by hospitality firms to seek information about threat, opportunities, macro environment analysis, micro environment analysis and industry analysis. The critical aspect of strategic principles is identifying gaps in the global market so as to assist international companies to monitor the changing global and domestic market conditions. Domestic companies are considering expanding operations into the overseas markets to fill market gaps. International hospitality companies have identified the market gaps in many regions of the world in the midscale hotel and restaurant segment. Hospitality product and services are often modified to the local target markets and culture with regards to the hotel architecture and interior decoration of public areas and restaurants. The case study explains how Moyo as an African brand has diversified into restaurant, retail and entertainment. The perfect product mix of the three sectors has promoted the Moyo experience as a brand very well in South Africa. Here the author would critically analyse the case study with regards to Moyos experience in South Africa and how it entered the niche midscale hospitality market. The author would also evolve the future growth strategies for Moyo as a brand to evolve globally.

The analysis provided by the author portrays an explicit picture of what the Moyo experience has done to attain its present standing in the hospitality industry. To achieve the objectives of the case study the first step would be to conduct an industry analysis, micro environment analysis and lastly macro environment analysis.

Industry analysis:

(Crook, Ketchen & Snow, 2003) state that the industry analysis consists of Porter's "Five Forces" which considers the intensity of competitive rivalry, bargaining power of buyer and supplier, threat of new entrants and threat of substitutes. (Refer Appendix 1 for analysis of the Moyo case study with regards to Porter's "Five Forces").

'Moyo' is the Swahili word for 'Soul', a brand for the Africans who believe in the future that Moyo as a brand would succeed because it is African. The optimistic view of Moyo founder, Jason Lurie has successfully ventured into Johannesburg and has realised his dream of offering the Moyo experience to his customers in Johannesburg, Capetown & Spier wine estate. Lurie as an enterprising entrepreneur ventured into related and unrelated diversification which may be done to minimise risks and increase attractiveness to customers through restaurants, retails and entertainment.

The concept of offering a subtle mix of three kinds of entertainments has been successful for Moyo (brand extension), it is proven by the sales figures in the case study which says turnover from all Moyo outlets increased by 3,000% and the average number of customers visiting Moyo outlets each week was about 20,000. Thus Moyo ventured into more restaurants which are proving a great success. Moyo offers a 600 cover restaurant at Melrose Arch with different levels of entertainment and serving authentic Pan African cuisine. But the author suggests that African cuisine would not be accepted globally as the menu offers an array of meat products which may not be suitable to different cultures and nations. Thereby the cuisine would require a local adaptation with keeping in mind the African culinary aspect and after the entire goal is to keep the Moyo experience alive. The concept of Moyo CD bar would be a success in different countries and also they have a selection of customised Moyo wines (Cabernet Sauvignon & Shiraz) which if marketed carefully in the regions may give a stiff competition to the already existing French and Italian wines. The Moyo brand has its own Moyo Craft factory, and the services are offered with a traditional African touch. The product mix of Moyos strategies has a good future provided they are religiously and rigorously on par with their product and service offerings.

The close competitor for Moyo is Montecasino in Johannesburg (montecasino.tsogosun.co.za, 2007) which boasts of having a casino area with more than 1700 slot machines and 70 gaming tables, with first class conferencing and event facilities, the Pieter Toerien theatre and also offering unique shopping and dining experiences. The second competitor would be The Hotel Izulu in Durban which offers the same facilities as Moyo does, but is not into huge operations as Moyo. They have a same service and product offering, the only difference being, their retail products are outsourced. Inspite of such competition the Moyo Bar at Melrose Arch is noted to be as one of the bests bar in the world (worldsbestbars.com, 2007) Thus, Moyo has to be watchful of these competitors.

The author also claims that incorporating retail outlets at Moyo restaurants as a medium for attracting customers is a negative strategy as it would increase unnecessary crowd or retail traffic. The author is optimistic with the view point that if a customer comes in for window shopping it is called as an entertainment centre and there may be brand awareness which is generated but ultimately there is no generation of revenue. This will ward away all potential customers who are really interested to feel the Moyo experience at Moyo restaurants which would include business and family crowd. (Kandampully & Suhartanto, 2000) claim that customer satisfaction is the important outcome of marketing activities who help in expanding the business operations, gain a higher market share and do word of mouth advertising. This leads to improved profits

Micro environment analysis:

The micro environment factors consists of actors and forces close to Moyo that can affect its ability to serve customers, the company itself, marketing channel firms, suppliers and keep a close eye on its competitors. (Refer appendix 2 for Moyos microenvironment his analysis).

Kotler,