The Management of Sylvia's Bar - Case Study Example

?Case Study – Sylvia’s Bar Contents Contents 2 Introduction 3 The Analysis of Falling Profits and Recommendations Thereof 3 High Costs of the Menu 4 Salaries and Conditions of Staffing 4 Entertainment Shows 5 Addressing the Competition 5 Enhancing Relationships with the Staffs and Consumers 6 Recommendations 7 References 8 Introduction Located in Birmingham the high street bar and night club, Sylvia earned a lot of fame and thereby reaped high amount of business profits from its inception of business during 1986. The bar in the initial stages focused mainly on the bank owners offering them wine and cocktail and earned a lot of reputation in a limited period from its starting thereby also gained on profits. However the bar and night club in recent times is found to trip down from its past position on account of earning losses and this fact had made the outlet also lose on its past popularity. It is found that the bar in recent times has started accounting a lot of problems both in its financial, structural, marketing and human resource sectors that in turn made the firm start gaining losses. The paper herein would tend to study in depth the causes of the bar’s downfall and thereby render some positive recommendations to revive its past stature. The Analysis of Falling Profits and Recommendations Thereof It is found that the bar from the period tending from 2005 to 2007 reflects a continuous fall in monthly profits from a whooping 3500 Pounds Sterling to only 750 Pounds Sterling. Comparing again on the basis of a year to year fall it is found that the profits of the bar had reduced by 20 percent from the 2005 to the 2006 period while again from the 2006 to 2007 period it had recorded a fall of profits in around 73 percent. However the bar again from the 2007 to 2008 period gained a rise of around 38 percent in profits thus reflecting a chance to revive. From the period ranging from 2008 to 2011 the firm not only started declining its profit position but finally slumped down into heavy losses of around 250 Pounds during 2010 and 400 Pounds during 2011. The above facts reveal that the firm is steadily suffering the effects of some grave internal policy decisions that are causing the heavy downfall in profits. High Costs of the Menu It is found that the high street bar Sylvia only focuses on the preparation of expensive foods and drinks for its consumers. The prices for the main courses are found to range from 23 Pounds and rise up to 35 Pounds. In that the bar needs to conduct large amount of promotion to highlight its niche image to the consumers of being a high priced store only focusing on the delivery of high class products. Further apart from investing on print and visual communication to enhance its high class image the bar can also go for designing its interiors accordingly and rendering a boutique look into it. Working on a particular theme with enhanced store atmospherics using colours and sound effects the store can focus on gaining larger footfalls. On the contrary the high street bar Sylvia can help form another category of food products that would be priced in a moderate manner ranging from 12 to 18 Pounds and would involve the same kind of quality and service offered to the customers. Separate packages can also be rendered that would help the bar in gaining both expensive and moderate consumers. This strategy would certainly work in reducing the amount of food wastage by Sylvia. Similarly it is also found that the prices of cocktail and wine drinks are also charged quite heavily and above the market average. The prices charged for the cocktail and wine drinks by Sylvia are more or less the double of the ranging market prices. Herein also the bar is required to create a niche market or association for consuming such high class products while also making area for moderate consumers to gain access to such drinks. This policy would help the company gain a larger number of consumers and thereby help to gain both in revenue and sales profits (Porter and Prince, 2010). Salaries and Conditions of Staffing The management of Sylvia should try considering the lowering of the compensation package of the staffs working in the outlets and also of its managers by matching such with the available industry average in United Kingdom. However the motivation of the people in the store can be enhanced through proper reward and competition policies in which the people pertaining to the different departments would be aptly rewarded based on their performances in meeting the needs of the consumers. Such reward and benefit systems can either be rendered financially by the company or the staffs can be empowered to take potential decisions thus enhancing the opportunity of the people to grow. Again the uniform of the staffs can be changed from such classic black and whites to providing a contrast to the colour used in rendering the theme to the stores. Such activities are considered in helping the people to get duly motivated to perform more productively. The concern with the new set of policy recommendations can help reduce operational cost and gain in sales revenues. Entertainment Shows The management of Sylvia should firstly try to gain the support of a cheaper brand group than the present band, Razzle Dazzle charging a hefty amount of 1200 Pounds for their shows. Sylvia should however invest in large amount of promotions through use of hoardings and printing of pamphlets to highlight the use of the new band for the store while keeping the price of entry same. Again special road shows can be organised by the bar through the use of the new band selected to help gain a larger public interest for the same. These activities would certainly help in drawing in large crowds from the society and would thereby help the bar to cover the break even and gain on profits and revenues. Addressing the Competition In order to address the emerging competition from the newly opening up bars in the neighbourhood, Sylvia should enhance on its promotional and marketing activities by conducting popular events. Sporting and other cultural events can be broadly incorporated by the bar company wherein free samples of drinks can be rendered. Moreover the bar can dress its inside and outside with resplendent colours and also showcase a part of its band selected to play popular pop songs outside the outlet thus endeavouring to gain attention of the people passing the bar. Moreover the bar managers can also focus on opening up the bar before the usual time of eleven in the night helping in creating a craze amongst the local people. The opening time of the bar can be enhanced through the use of laser beams that would help in attracting the vision of the people to the bar. Similarly the bar managers can also start working on a loyalty scheme to help enhance the interest of the regular visitor to the bar thereby treating them as niche customers. The loyalty system would help in reducing the price of cocktail and wine drinks along with the food items served to the niche customers through the presentation of the loyalty cards. Again the people can be encouraged to gain loyalty points on their visits to the bars for enjoyment which again the people can redeem effectively during celebration of different occasions. Moreover mailers can be dispatched to the people on special occasions like Christmas, the customer’s own birthdays, or also in regards to the inauguration day of the store. The people can be invited to enjoy the special evenings at the store with their families where in addition to the drinks and food the consumers would be encouraged to spend a get together with friends and family. These activities would thereby help in enhancing the awareness of the brand and logo to the consumers which in turn would help the bar to counter external competition. Again the above activities would help in encouraging the word-of-mouth activity in the extended market thereby helping the bar to gain a larger number of consumers. The above strategies are held to help the bar to effectively counter the competition from the opening up of large number of bars in and around the region catering to the young and old customer base (Farhoomand, 2005, p.219). Enhancing Relationships with the Staffs and Consumers The bar also needs to enhance its relationship with both the internal and external set of people by encouraging them to participate in informal meets and open forums thereby gaining the views of the people to help in developing the internal environment of the store. Working on the above ground would help the bar in enhancing both the communication and interpersonal relationships of the customers with the internal people in the bar and also of the lower level staffs with the higher authorities. The front line staffs being in direct touch with the customers would help the upper management gain an enhanced understanding of the feedbacks gained from the customers in developing the service and product qualities. Moreover development of communication would also enhance the relationship of the concern with the external people and thereby create a favourable social image. Recommendations Sylvia’s Bar to be successful in the long run need to conduct extensive market research to understand the market demand and pricing conditions. Accordingly resources can be allocated to modify the quality of the service and products delivered to the customers. Moreover separate categories can be created for the products produced for the elite niche and general consumer base and thereby can be priced accordingly. This process would enable the company to sustain both consumer loyalty and also the profitability position. Further the bar can also work on visual merchandising activities by both decorating the interior of the bar with vibrant colours to create a feel of a boutique and also in organising events to help attract large amount of footfalls. Moreover the company must also work in changing its internal policies to largely motivate the people to share potential feedbacks with the higher hierarchy so as to help in taking effective decisions. Incorporation of motivational tools like reward systems would help in enhancing employee loyalty and generating consumer loyalty schemes and cards would help the firm enhance loyalty of the consumers. These recommendations put forth would certainly help Sylvia’s bar gain on both productivity and profitability in the near future. References Farhoomand, A., 2005. Small business management and entrepreneurship in Hong Kong: a casebook. Hong Kong University Press. Porter, D., and Prince, D., 2010. Frommer's London 2011. John Wiley and Sons. Read More