Background of the UK Buffet Restaurant Industry - Case Study Example

? Business Plan Executive Summary The buffet restaurant industry has established a strong position at today’s fiercely competitive global marketplace. This dramatic role of the buffet restaurant industry can be highly observed due to the changing food habits of the global customers and their changing preferences towards the ethnocentric food items. The primary intention of this paper is to devise a plan for a multi cuisine buffet restaurant that is to be initiated in the region of Liverpool in the UK. In precise, the idea is to open a restaurant that offers diverse food items comprising of national and international flavours in the selected region of the UK. Contextually, this business plan provides an overview of ownership and structure of the proposed business along with the team formation that is to be followed in the operational department of the business. The plan also depicts the marketing strategy of the business to penetrate and get established in the market of Liverpool. Contextually, an analysis of the competitors and their strengths and weaknesses has also been depicted in the plan in order to get a comprehensive understanding about the competitive nature of the overall market. The business proposal also incorporates an effective and relevant estimation of investment needs along with the required budget for the first three years from the start-up of the venture. 2. The Business Idea In relation to the present unconventional scenario of the global restaurant industry, a dramatic growth of the buffet restaurant business can be observed as obtaining greater interests of the modern entrepreneurs. The emerging trend of the changing food habits along with growing performance of the world-cuisine business concept have been rapidly demonstrating a greater opportunity for the marketers to achieve a stable business position in the fiercely competitive restaurant industry. Correspondingly, the rising popularity of the ethnic cuisines have also been witnessed to play a pivotal role for the buffet restaurants in terms of enjoying continuous growth as well as extensive numbers of global customers from each part of the world (Tung, 2003). The primary objective of setting up a new multi-cuisine buffet would be to obtain recognition as the most preferred and reliable restaurant company in terms of delivering customers with exceptional and quality based multi-cuisine food items, exhibiting a wide range of global cultures and thereby, taking a plunge towards generating awareness regarding the ethnic richness of the corresponding global nations. Moreover, the other core objectives of the venture would be focused on achieving a minimum growth of 10% in its profitability each month after the start up. In addition, attaining the desired sales target of ?80,000 in the first year and augmenting its annual sales around 15% in the 2nd year of the venture can also be considered as the other primary objectives of the organisation. With regard to the changing trends of the global customers along with increasing demand of world-cuisine restaurants, the primary aim of this report is to prepare an effective and relevant business plan for establishing a multi-cuisine buffet store in the growing UK buffet restaurant industry. The proposed business plan would be included relevant information and idea with respect to the management body, operational functions along with financial projections to be a successful entrepreneur in the growing buffet industry of the UK. In order to increase the efficiency of the proposed plan, the proposal would also focus on accumulating relevant information about the ownership structure and the relevant legal frameworks in order to protect the organisation from different external threats and issues that might be witnessed in its initial phase of development. 3. Background of the UK Buffet Restaurant Industry In relation to the present trend of the global restaurant industry, it is obvious to recognize dramatic changes in the food habits or preferred food items of the global customers. Moreover, a growing trend of the world-cuisine buffet has also been witnessed to gain tremendous growth in the continuously expanding and diversely developing UK restaurant industry. According to the present scenario, the private marketers along with the investors commonly seek to expand their business units in different geographical locations in order to fuel the spontaneous growth of the global restaurant industry. In relation to the present restaurant market within Liverpool, the multi-cuisine buffet market has been recognized to gain adequate opportunity for the global marketers to expand their buffet units in the respective location(s) (Ernst & Young, 2012). According to the present market scenario, the world-cuisine buffet restaurants in Liverpool have been experiencing a growing demand from the global customers for different types of food items. This changing trend in the food habits of the consumers has significantly influenced the world-cuisine buffet market of Liverpool. The current scenario has also evidently influenced greater opportunity for the entrepreneurs to open multi-cuisine buffet restaurant (Ernst & Young, 2012). Therefore, the growing demand as well as fiercely changing food habits of the customers towards the multi-cuisine food items can be noted as few of the primary motivational factors for this business proposal. 4. Ownership and Company Structure The ownership structure plays a pivotal role for the ventures to build strategic decisions regarding the strategic, managerial along with operational functions and formulate a sustainable position in the respective business market. It is highly essential for the new venture to maintain strong establishment of its ownership structure in order to formulate effective business strategy and make business functions efferent in accordance with the market opportunities. The ownership body of the venture is also liable to deal with different strategic and operational issues, which might be formed in different stages of the business (Mellor, 2009). Correspondingly, the ownership structure of the proposed venture would be based on a sole proprietorship formation, in which the owner of the venture would be responsible of making investments along with decision making regarding the operational functions of the business. In the context of company structure, the proposed multi-cuisine buffet restaurant would initially focus on an informal orientation due to the less numbers of workforce appointed at the start-up stage of the venture. After obtaining a feasible growth in the Liverpool market, the venture would require to implement a matrix structure in order to obtain better control and management of the workforce. In the initial stage, the workforce structure of the venture would focus on including highly experienced chefs with competent skills in preparing world-cuisine buffet items. Moreover, initially the management individuals for the venture would be recruited as per their managing, controlling and communication skills in order to maintain balance between the operational and managerial staff members within the organisation. 5. The Team: Leadership, Board of Directors, Accountants and Lawyers The leadership would probably be made up of innovative and competently skilled individuals, entrepreneurs in association to obtain a varied range of professional assistance required to efficiently perform a range of business operations. In this context, the members, as the board of directors would be selected in accordance with their experiences in managing and decision making process in this relevant business industry. This would enable the new venture to get feasible numbers of investors that the business is required, in order to effectively achieve its aims at the initial stage. At the start-up stage, the board committee would be incorporated with three numbers of new directors with multiple responsibilities along with the owner of the venture, who would be likely to play the role of the Chairman of the new venture. Mr. X would be appointed as the director for the finance and accounting functions, who has five years of experience in finance and auditing in the relevant business market. In order to efficiently perform operations of the new venture, Mr. Y would be assigned as the director of Operations and Human Resource Management (HRM) of the new venture, who has more than five years of experience in managing and controlling operations that are performed within a restaurant. Correspondingly, Mr. Z would be appointed as liable to perform different marketing and technology based operations of the new venture. In order to perform different legal formalities, the venture would also require a lawyer. As the initial stage of the business, the lawyer would be temporarily hired in order to effectively deal with the legal compliance along with other issues related with the registration, patent rights and licensing activities of the company. 6. The Product Products are the core and most vital aspects of the restaurant business, especially while offering multi-cuisine food items to the global consumers. In order to gain numbers of customers at the initial stage, the venture would offer a range of cultural and ethnocentric food items to the customers. In terms of differentiating the products from the existing competitors, the buffet menu of the proposed venture plan would incorporate the concept of appropriate quality regarding the cuisine processes along with ingredients required to preserve the authentic cultural and ethnic taste of each food item. In this context, the buffet menu, for the proposed business plan, would incorporate basically the food items from Chinese, Thai, Indian and Japanese ethnic and cultural culinary heritages. Therefore, food processing operations of the venture would be an essential aspect, which also requires employing highly experienced chefs. The strategy of highly complying with utmost quality of different ethnic and cultural food items would further enable to build a strong market in Liverpool. In this regard, the pricing strategy would also be formulated in accordance with the changing demographic pattern as well as annual spending structure of the Liverpool customers. In accordance, the detail pricing strategy along with discount, guarantee follow-up and service strategies of the venture have been strategized in the marketing plan section. 7. The Patent Situation In relation to the fiercely competitive environment in the global buffet restaurant business market, a strong set of Intellectual Property Rights (IPR) regarding the various aspects of the business shall be rationally deemed as highly essential for an organisation. Therefore, emphasizing the current competitive pace of the buffet restaurant market, the IPR formalities would focus on protecting the brand name of the organisation along with different cuisines that are to be exceptionally prepared and delivered to the Liverpool customers. Later on, the IPR processes of the organisation would encompass the different aspects of the business including its buffet menu, marketing and advertising activities. The IPR strategy for the proposed business would enable to protect the brand value and loyalty of the organisation along with its different cuisine buffet products and/or services. 8. The Marketing Plan The plan of any business can be broken into several other categories, which will include customer segmentation, market research and marketing mix. 8.1. Customers Segmentation Customer segmentation is a process that involves dividing customers of a particular target market on the basis of their needs and demands and devise strategies accordingly (Sandhusen, 2000). For the business idea of multi-cuisine buffet restaurant in the area of Liverpool, the target customers will be the people who are attracted towards different varieties of culinary experiences from around the world. In this regard, the segmentation of the customers will mainly intend to identify the food loving people of Liverpool, especially for those who are quite enthusiastic towards diversified food, which might include people from various age groups. Likewise, strategies will be made accordingly to be able to meet their expectations and demands with the intention to ensure their maximum loyalty towards the business. 8.2. Market Research It is an organised effort that is concentrated towards acquiring maximum information about the target customers and their needs, demands and purchase behaviour (Sandhusen, 2000). For the business idea of multi-cuisine buffet restaurant in the area of Liverpool, the fooding needs, preferences and patterns of the customers will be analysed. Observably, the customers of this market usually seek for variety in flavours offered through the menu in the restaurant. Moreover, the customer of Liverpool also appreciates fast and effective services, which provide them better experience wasting minimum time. Additionally, the preference of the customers in this particular sector also includes the demand of a clean, friendly and eye-catching dining atmosphere. Undoubtedly, these aspects will be crucial in devising the strategies for the business. 8.3. Marketing Mix This section of the marketing deals with strategizing the 4P’s and 4C’s of marketing the business. 4P’s Product: The product for the multi cuisine restaurant, to be initiated in the area of Liverpool, will include those food items that are influenced from the culinary richness of diverse nations from around the world, mostly the Asian continent. As expected, it will offer the customers flavours of a diversified range of food items. Price: The pricing strategy for the product offered in the multi cuisine buffet restaurant will be generic and will be based on the spending behaviour of the people of Liverpool. This will ensure that the business attracts maximum number of customers. However, considering the current market trends in the region amid the buffet restaurants, the price for the food items will range from ?8.00 to ?12.00. Promotion: The business will be promoted in the regions of Liverpool with the help of both print and digital media. The quality of food and services of the restaurant will be intended to be conveyed to maximum number of people with the help of televising advertisements, hoardings, newspaper advertisings, sample menu distribution and advertising in social media among others. The restaurant will also promoted through organising special programs such as New Year day, Valentine’s Day, happy hours apart from the organisation of various sorts of contests to keep consumers satisfied in experiencing a varied range of offers in the restaurant (Shah & D’Souza, 2009). People: The promotion of the product will be directed towards attracting people on the basis of their age, gender, and income level as well as food habit among others, especially those of the diverse food loving people. 4C’s Customer Services: The restaurant business will intend to provide efficient and fast services to the customers as per their demand and preferences in Liverpool. Proper service strategy will be devised in order to accomplish this goal. Cost The cost of the product offered in the multi cuisine buffet restaurant will mainly follow a penetrating pricing strategy. Correspondingly, at the initial phase, the product will be offered at an affordable cost of around ?8.00 to ?12.00, which will fluctuate as per the seasonal demands, increasing the same in the later stages following the brand loyalty of the company. Convenience Apparently, customers in this particular market is deemed to appreciate clean and a friendly dining atmosphere. Therefore, the business will ensure the deliverance of the same with utmost efficiency. Communication The specialty of the products and the services of the business will be conveyed to the customers in Liverpool appropriating a wide range of effective advertising tools. 9. Sales and Distribution The sales and distribution of the product of the buffet restaurant will mainly be done from the outlet itself. In the initial stage of the business operations, products will only be sold directly to the customers from the restaurants. The business will also provide home delivery services but after a certain period of time, i.e. after getting acquainted with the customer behaviour of Liverpool. Apart from this, the restaurant will be available to organise V.I.P parties, functions and other private affairs and serving a diverse range of clients. The restaurant is also intending to provide franchising options in the later stage of its operations in order to spread its functions in a wider demography (Gupta, 2009). 10. Competitors Competition and the corresponding influential forces are undoubtedly one of the biggest challenges for the business, when it initiates its operations in the market of Liverpool. In this regard, the business will need to analyse the potential competitors and contextually depict their strengths and weaknesses. The main competitors for the business, in this particular market will be Jimmy’s World Grill & Bar and Red Hot World Buffet and Bar. Both the players have their operations well established in this market for quite a long tenure and will ultimately pose stern competition for the business. Strengths and Weaknesses of Jimmy’s World Grill & Bar Strengths Operates in a large scale market Have considerable experience of operations in this market Good brand image with considerable number of loyal customers Weaknesses Have certain concerns with regard to the quality of food The customer services is deemed to be on the weaker side Source: (TripAdvisor, 2013) Strengths and Weakness of Red Hot World Buffet and Bar Strengths Quite well known with appreciative brand image Provides diverse range of food Provide products (food and services) at affordable price Weaknesses Concerns over the quality of food Lack of diversification in workforce Source: (Leeds, 2013) To be noted, all these strengths and weaknesses of the competitors will be taken into consideration while devising strategies of the business. This will ensure that the business will be able to get a competitive edge in the market of Liverpool and enhance its performance to a considerable level. 11. Customers Analysing the customers and their behaviour is deemed to be quite crucial with regard to enable smooth and successful operations for the business in the concentrated restaurant industry of Liverpool. The customers will therefore be categorized into various segments on the basis of life style, behaviour, buying pattern and demographical and geographical pattern among others. Life Style: People of Liverpool mainly spent their leisure time in pubs, bars and dining with families in restaurants. Moreover, majority of the people in this particular region prefer to enjoy their leisure at night, having dinner in their selected restaurants. Accordingly, this group of people will be the primary target for the business (BBC, 2013). Behaviour: Observably, there are a large bunch of customers in this particular market that is deemed to appreciate diverse food items with national and international diversifications. This group of people will be segmented as the potential customers for the business of the proposed multi cuisine buffet restaurant (BBC, 2013). Buying Pattern: The people of Liverpool mainly prefer variety in food with national and international flavours. Moreover, hygiene is also one major aspect that influences the buying behaviour of the customers in Liverpool. The business will therefore purposefully emphasize fulfilling these varied needs of the customers and ensure their loyalty to the highest extent (BBC, 2013). Geographical Factors: Maximum percentage of the population of Liverpool lies in the city region, including Warrington, Flintshire and Chester. Hence, the business will mainly target this geographical section of the region for acquiring customers (BBC, 2013). Demographical Factors: Observably, maximum percent of the people in Liverpool belongs above the working age, i.e. 30 years. This group includes male, female and senior citizens of the region. These groups of customers will constitute the group of the potentially targeted customers for the proposed business (BBC, 2013). 12. Agreements and/or Alliances The proposed venture plan in the Liverpool buffet restaurant industry has been principally designed as a new concept of offering multi-cuisine buffet. In this regard, the venture would not focus on making any agreement or alliance with other venture or resellers. The venture would only establish formal alliance with the suppliers in terms of procuring raw materials that are required to produce multi-cuisine products in line with the cultural and ethnic backgrounds of the different countries. After obtaining significant interests of the customers, the venture would also focus on making relevant agreement with the expert and renowned brands from Thailand, China, India and Japan for the purpose of product development. Moreover, the venture would also highly focus on formulating effective media strategy encompassing print, telemedia and online promotional media tools such as organisational blogs and social media sites. With regard to the barriers associated with health and social care, the organisation would also focus to maintain quality in accordance with promoting health and wellbeing of the customers. Additionally, the use of disposable materials and biodegradable products would also help the organisation to minimize its impacts on the environment to a legitimate extent. 13. The Budget The budgetary plan of the proposed multi-cuisine business would be focused on encompassing different investment and costs to be required for the first three years of the venture. In this regard, the budgetary plan of the proposed plan has been demonstrated hereunder. (Note: Assumed Tax Rate = 10%) 14. Investment Needs 15. Any Barriers According to the increasing volatility within the investment market associated with restaurant ventures, investors often seek to find extra capital to deal with the unforeseen situations. Moreover, the investors are also likely to avoid the potential risks or any types of unpleasant surprises due to the volatility of the markets (Mellor, 2009). Therefore, the investment issues that are raised by the market volatility may be a major influencing factor for the proposed multi-cuisine buffet business. In order to mitigate the future risk prevailing in the investment markets, self-funding will be considered as the most beneficial mechanism at the initial stage of the venture that would minimize the credit risk likely to be caused due to the increasing variation of the restaurant business industry. Nevertheless, business loans under the relevant small business funding scheme of the UK legislation will also be availed as another source of funds in this business. After obtaining a feasible growth in the local market of Liverpool, the venture would focus on building its numbers of investors and ensure them feasible return on their investments. 16. Profit and Exit If, in case, the business fails to perform as per the expectation, companies need to develop exit strategy with involving minimum wastage of the cost spent in establishing the same (Jones, 2013). Observably, a bulk has to be spent in establishing or setting the restaurant business. Hence, the business needs to devise plans so that in-spite of making an exit from this particular market, they can earn a considerable amount as profit or gain at least 100% return on the actual investment. Contextually, this business will take the approach of leasing (lending the business to others for a particular duration in return of rent or a sum of money) as the primary strategy of exit and take the approach of selling the business to a third party as an alternative exit strategy (Jones, 2013). References BBC. (2013). United Kingdom profile. Retrieved from http://www.bbc.co.uk/news/world-europe-18023389 Ernst & Young. (2012). Pubs and restaurants outlook. Retrieved from http://www.ey.com/Publication/vwLUAssets/Pubs_and_restaurants_outlook_2012/$FILE/EY_Pubs_and_restaurants_outlook_2012.pdf Gupta, S. L. (2009). Sales and distribution management. New Delhi: Excel Books India. Jones, M. (2013). Exit strategies for restaurant buyers and owners. Retrieved from http://sellingrestaurants.com/news/EXIT-STRATEGIES-FOR-RESTAURANT-BUYERS-AND-OWNERS.html Leeds, H. (2013). (2013). Red hot world buffet and bar. Retrieved from http://www.tripadvisor.in/Restaurant_Review-g186411-d1950210-Reviews-Red_Hot_World_Buffet_and_Bar-Leeds_West_Yorkshire_England.html Mellor, R. B. (2009). Entrepreneurship for everyone: A student textbook. London: SAGE. Shah, K., & D’Souza, A. (2009). Advertising n promotion. New Delhi: Tata McGraw-Hill Education. Sandhusen, R. L., 2000. Marketing. Barron's Educational Series. Tung, W. C. (2003). A customer perception and satisfaction survey for a Chinese buffet. Retrieved from http://www2.uwstout.edu/content/lib/thesis/2003/2003tungw.pdf TripAdvisor. (2013). Jimmy's world grill, Wimbledon. Retrieved from http://www.tripadvisor.com/ShowUserReviews-g186338-d2251428-r135257565-Jimmy_s_World_Grill_Bar-London_England.html Read More