Fast Food Business Strategy - Case Study Example

Karam’s Objective: To grow his fast food business, while providing higher level of customer satisfaction through faster and more efficient service to the customers. Strengths The first strength for this business is the unusual menu choices, which are often a mix of Indian and Italian food The second strength is the good food quality The third strength is the knowledge about the fact that maximum orders for the business comes from a 2 mile radius which is serviced by the delivery wing of the restaurant chain.

Weakness Most of the orders from the walk in customers are skewed towards the east and north east zone of his current business location, which are beyond the free delivery area of the restaurant. The high frequency of walk in customers during the period of 5 – 7.30 PM is creating uneven pressure on the business output, resulting in loss of potential customers. High waiting time, because of lower man power and capacity at his current business location. Possible Opportunity It can be said that the rising number of customers are signalling that the demand for the food offered by the fast food outlet is tremendously high as well as gaining popularity in the recent times.

If the management can come up with a solution to the current problem related to customer management, it will provide significant growth opportunities for the business. Possible Threat Talking about potential threats, it can be said that the fast food outlet faces threat from highly popular chains like Pizza Hut, Pizza as well as from various other independent food outlets who keeps on adding and offering Indian and Asian delicacies on its food menu. Suggestion: First Alternative As a first alternative to the current problem, it can be recommended that Karam should consider the factor of increasing the free delivery area for the regions in the North and North East, since most of the walk-in customers are from that area.

For doing this, Karam should try to gather more location specific information from his walk - in customers. 2 Pros Will help in reducing the uneven pressure from the walk- in customers during the peak hours Will help in the growth of the delivery wing of the restaurant. 2 Cons Discontentment may arise among consumers of other location, because of the business’s increased and high focus on catering to orders from the north and north east region. May develop a pressure on the delivery wing of the restaurant because of probable rise of delivery orders during the peak times.

Suggestion: Second Alternative The second strategy that Karam can focus is to build a new pizza centre at a location near the large urban centre. For the purpose of attracting investment, Karam can seek capital from an angel investor. 2 Pros Will help in growth of business, by the formation of a restaurant chain at a high growth location. Will help in reducing the pressure during the peak hours from the first centre, which is located near the satellite community 2 Cons Will need external funding in the form of new capital investment from an angel investor.

The angel investor might ask for controlling stakes, thereby creating an imbalance in the already existing well balanced shareholding pattern for the new business. Suggestion: Third Alternative The third alternative that can be suggested for the fast food chain for the purpose of catering to the growing number of customers is the fact of acquiring new ovens as well as manpower. This will help in dealing with the increase in order frequency from the walk-in customers during the peak time, without having to go seeking for capital investment from an angel investor.

2 Pros Will help the fast food chain to significantly increase its production capacity. Will help the pizza chain to cater to the growing number of consumer base, in a more efficient manner. 2 Cons Will lead to the need to hire more cook, thereby increasing the operating expenses and fixed costs for the fast food outlet. For the purpose of maintaining high level of profit margin and a balance increase in profitability with regards to increase in capacity, it can be said that the Karam needs to focus on taking major orders from various other clients, and thereby focus on entering the business to business sector in a very steady and phased manner.

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