SWOT Analysis of Chinese Fast-food - Business Plan Example

SWOT analysis of Chinese Fast-food A SWOT analysis is a tool that is beneficial when assessing and evaluating the internal strengths and weaknesses of a business. SWOT also reveals the potential environmental opportunities and threats of a business organization. SWOT is widely considered to be a starting point of marketing and strategic plan ; therefore , it would provide sound insight and information that could lead to a successful strategy formulation for the Chinese Fast-food. This analysis will be a tool that can help us identify areas of opportunities and strengths of the Fast-food so as to increase the market extent; moreover, the weaknesses or threats of the business would be identified so that planning can input the information from such. In today’s quick paced lifestyle , fast-food is becoming a trend of since it immediately staves off customers’ need for a quick bite . A large number of customers prefer fast-food restaurants rather than conventional types of hotels for practical reasons: convenience, taste, and style. The CBS News reported that fast-food is popular among college students since it is “quick, provides good taste, inexpensive and suited to busy life-styles” ( “ Top 11 Reasons for Fast Foods Popularity, 2008) . Most of the time, college students are too busy to cook for themselves due to the numerous work-load from academic requirements. Also, they find eating in fast-food as a venue for socializing with friends or classmates while discussing important issues. In this regard, the group decided to operate a Chinese fast-food near to the college, despite severe indirect competition from Starbucks and Costa. It is believed that the Chinese fast-food diner will be successful for a major reason: a large number of students are from China and they prefer Chinese food. Before the project was conceptualized, the group also conducted a survey among college students regarding their perception about the school’s catering services. Many students were not satisfied since the canteen offered the same food on a daily basis. Young people love variety and are quite adventurous on their food taste. Planning for a new business venture requires the concept of “demand”. Since there is a demand for Chinese food in the campus due to demographic factors, putting up a Chinese restaurant is a very feasible marketing project. On top of this is the basic assumption that college students are generally busy so fast food would suit their taste. The prospect of competing with Starbucks and other diners are not that threatening since they have a different niche from our restaurant. Below is the SWOT analysis: Table 1.1 Strengths Weaknesses Quick service Affordability Attraction Unique concept Satisfying meal Wide selection of food choice Different preferences Lack of customization as a new business Many perceive it as unhealthy Small start-up capital thereby limited resources Opportunities Threats Near to college with more Chinese students Growing trends of students towards fast-food High competition from Starbucks and Costa that are already established Readily available food in other shops near the college Strengths Fast-food provides quick service as compared to other types of restaurants, and thus students may find it convenient since it saves time The fast-food items will are affordable since we benchmarked prices from other restaurants; The servings are generous thereby it is “value for money” The theme and design of the fast-food restaurant is quite attractive to its customers especially the young generation ; Wide selection of food choice such as : fried noodles, spring roll; chicken Weaknesses As in the case of any product or service, customers will have different attitude and different preference to the fast-food items and they may find Starbucks or Costa as preferable. In some cases, fast-food items or ingredients are pre-made and therefore it may not be possible to be customized according to the requirements of the customers. Many people perceive that fast-food items are unhealthy due to some of the ingredients like Monosodium Glutamate ( Ajimonoto) Costly capitalization and there is just little staring capital Opportunities The majority of the students are from China and hence, a Chinese fast-food will be most welcomed by them. Students normally have increased trends to fast-food hotels and this will be an opportunity for the business Food choices on the menu can be expanded depending on the customer’s needs Threats Competing with Starbucks and Costa, that are also located near to college campus, will be a difficult task Some shops sell ready-made food packets and items and many students may prefer the packed food so that they can have at their convenient timings instead of spending time in a Hotel. The Chinese Fast-food is a challenge since it has a small start-up capital considering that there are overhead costs such as salary for two cooks and truck rental which costs $10 a day. Nevertheless, it is projected that the volume of customers are high since the food is delicious and affordable. Moreover, the students have a choice of their own sauce for the rice toppings. As for now, spring rolls, Chinese style fried chicken, noodles and soup is being offered with free drinks. Service time is no more than five to ten minutes which is quite fast. The concern about MSG can be overcome with promotion indicating that such ingredient is not being used in the cooking process. Projected income is estimated at roughly $ 100 a day net of all expenses. The business would be opened with an elaborate Chinese celebration so it can attract the attention of students and increase market awareness. As for the indirect competition from other restaurants such as Starbucks, the restaurant would focus on its unique selling proposition: satisfying complete meal at less cost. It would be promoted as a “complete meal” that is value for money since the value meal has rice, viand and free drinks and a choice of own sauce. Also, a large population of the students are mainly Chinese, they would definitely want a taste of their own cuisine. Once in a while, they may hang-out at Starbucks but they would always prefer a good meal at the restaurant. Conclusion The fast- food business is a competitive industry since many types of diners come up every day. The young generation such as college students demand quick, satisfying and affordable meals that would match their lifestyle. For this reason, SWOT analysis plays a big role in strategic business planning since it reveals areas for improvement and pitfalls to avoid in starting a new business. Although planning does not dictate if a new venture is successful or not, planning is an important process in creating a strategic marketing strategy. Read More