Starting and Developing a New Venture: The Take-Away Restaurant Bohemian Rapsody - Case Study Example

STARTING AND DEVELOPING A NEW VENTURE: THE TAKE AWAY RESTURANT ‘BOHEMIAN RAPSODY’ Table of Contents Table of Contents 2 Introduction 3 Business Planning: Issues and Challenges 3 Strategy Development 7 Marketing Mix Strategies 9 Resources for Bohemian Rhapsody 10 Market Research 12 Conclusions 13 Reference List 15 Bibliography 18 Appendix 19 Introduction Cardiff being the capital city of Welsh has a good mix of different ethnic groups of various religion, culture and beliefs. The growing demand for take away food in the UK market along with global increase in take away restaurants are researched in building the restaurant and its menu selection The new venture is designed to be suiting the taste and preference of the region while developing the concepts of new restaurant business plans, that growing globally. The new restaurant would be a multi-cuisine take away inspired by The Queen’s most famous number ‘Bohemian Rhapsody’. Ford (2015) notes that the number of meals served in the UK restaurants are decreasing post 2008 economic crisis and that during 2008 to 2012 there has been a decline of 4000 outlets across UK. The market is establishing itself now and the take away counters are expected to do well if a variety of taste with cost effective product is served. The market has shown a growth for the casual dining formats by 4.4% in the UK market in the same period and that is due to independent small business ventures (Riding et al.2012). Business Planning: Issues and Challenges The key issues in developing the project are discussed from the demographic and legal requirement. The 2010 census of the city projected a population of over 350,000 with one of the fastest growing population in entire Welsh (Visitwales.com, 2015). The economy is dependent upon coal mining and steel production and contributes 20% to the entire Welsh GDP (BBC News, 2015). However, the cities unemployment figures show 4.4% population in 2010 when the weekly earnings were projected to be 445 GBP in an average (Price, 2014). Considering all the factors the new restaurant shall plan its offerings and service designs. Further, the name has been selected to give very unique English nostalgia feel of the eighties from the pen of Freddy Mercury. The mission of the business is to serve the residents and professionals of Cardiff the best of mixed cuisine at the best price offerings and an assortment of seasonal regional flavours to choose from. The objectives for the business would be to create a space for itself in the business areas of Cardiff and earn substantial revenue that gives the business break even within 1 year of operations. Figure 1: UK Wages to Inflation Comparative graph (Source: Economichelp.org, 2014) Political: The takeaway would need to have operational licences where the food safety and operations. Pettinger (2013) found that in UK there are 2.8 people per job and average annual payment has seen a raise of 1.6 % to past few years. The hourly minimum wages is 6.5 GBP as compulsory minimum wages. This would mean that the business has to earn the minimum wages each day for the staffs, so it has to earn that much, where the pricing of food items pricing shall be affected with such political effects. Again the environmental laws of UK are becoming stringent where the operations need to meet the standards of pollution control laws. Economical: The economical perspectives in UK The UK ‘living wages’ is been raised to 7.85 GBP per hour on November, 2014, however 22% of the population is living below the Living wages as projected (Bbc. com, 2014). The ‘real wages’ in 2007 drop by 8% which is expected to grow 2% a year, the average spending too gets affected by the same (Ft.com, 2014). This may cause buyers in UK to shell out lesser money on eat outs or the lesser the disposable income the lesser is the spending, but it’s still better than it was in 2009 (Ft.com,2014). However the trends in future are likely to change and the cost effective production with quality output and services standards are expected (Leung, 2010). Again, the interest rates due to economic policy changes may affect the interest rates on the loans for restaurant development deriving its effects on product price for the business. Wages to Inflation Curve in UK Job Market (Source: Ft.com, 2014) The difference in the wages that’s mandatory minimum 6.5 GBP while the living wages stay at 7.85 GBP per hour, therefore the business to have a image for itself in social perspective has to arrange for Living Wages to support the staffs working for the business. Social: The social aspect in a take away for the Cardiff city would need to have few things in mind. Again since fewer people are spending extra money on food due to the crunch in economy, the pricing has to be formulated accordingly. Reuters (2015) reports that consumer confidence index rose by 1% while the purchase index shows a 5% growth this January since June 2007. However, the pre-election debate is that the stagnant wages would leave cost of living crisis among the people. Thus cost of food and preferences is a serious factor that the Bohemian Rhapsody would need to keep in equal balance to have the consumer’s getting attracted to the restaurant. The concern for healthy tasty cost efficient food is the need for the Cardiff population and likewise the same needs to be incorporated in the operations and offerings. Technological: Technology would enable healthy food production, fast distribution and a good amount of control and forecast in the long run. The design of the place that naturally gives it a comfortable feel which reduces the electricity cost with architectural inputs like electro glass that helps to let sunlight in or gives shade during a hot day. Public announcement systems to generate Kitchen order ticket (KoT) along with sales record keeping. An Integration of purchase till sales revenue calculations can be accommodated via single software that enhance the chance of better control and report generation. Environmental: Lesser the consumption of electricity betters it for the environment with lesser carbon footprint. Image development among consumers for a sustained development with effective recycling policies that generates minimum waste is introduced along with one solar operated incinerator to destroy any waste produced. The use of in-house architecture for electro glass use for light and heat control creating natural environment along with design aesthetics of the outlet. Legal: The law for setting up a restaurant business with permits and licences with infrastructure suiting the legal requirements needs to be developed. The required inputs that needs to be added for swift and smooth operations for ‘fair competition’ among other players. Therefore the impact would be in wages payment and financials of the business that it needs to generate from pricing the product likewise. Other than this ‘living wages’ the consumer’s comfort is to be seen so ramp for specially able citizens may be helped with it. The waste disposal policy would be such that not only follows the law but also shows futuristic ideas to develop environment friendly approaches. The software used for Restaurant Management from supply to sales shall have the option to generate the required results for the authorities to probe for Tax payments and VAT calculations to stay ethically clear among the community as a responsible business in ethics and practice. The UK population have affinity for food from ethnic food producers that which has made the average spending 7.5% of the household expenses for the people (Pettinger, 2013). Strategy Development These factors would in return show the business a way to strategise and develop a space for itself as in Porter’s % Force analysis. Bargaining power of the suppliers: The bargaining power of the suppliers in the Cardiff city market is low as the market is open for competitive pricing. The number of suppliers for each items needed for the restaurant business is open to multiple suppliers. Therefore the suppliers bargaining power is lower and since the switching may not involve much cost therefore the suppliers’ power in the Cardiff markets would not determine the supplier but it would be quality dependent. Again the reducing power of crude oil in the international markets should make the suppliers bargaining power lesser. Bargaining power of buyers: The consumer’s power to bargain is low in such Cardiff market as the restaurant face high amount of competition. Since the quantity and frequency of purchase is low thus the consumers don’t have an upper hand. However, the strategy is to get the consumer’s their own pick and choose option. This should increase the power of selection among the buyers while keep their price bargaining perceptions neutral when compared to others in the segment. Threat of Competitions: The threat of competition in the fast food industry is high, especially in the multi ethnic city of Cardiff. The city has a variety of restaurants and eats outs of multi cuisine variety (Vakkuri, 2003). The fast food take away concept would be something that Bohemian Rhapsody is planning where the offering shall be unique and much more consumer oriented to create the differentiation. Threat of New entrants: The threats from the new entrants in Cardiff’s market is low as the low set up cost, easy market access with no stringent regulate to market entry. The McDonalds and Subways are the best example of the kind of penetration that these businesses have done (Visitwales.com, 2015). Threat of substitutes: The substitute’s threats in the Cardiff market is moderate but is a substantial threat. The fast food is now packed and sold in the super-markets too which also pose a good amount of threat to the take away multi cuisines restaurants. McDonalds and Subways are few to name in among the restaurants of Cardiff that provides take away but the challenge can be mitigated by the brand using local flavours and consumer specific take away tastes on demand (Bercovitz, 2002). Marketing Mix Strategies The Marketing mix planned for the Bohemian Rhapsody is as: Positioning: The restaurant shall be positioned as the quick service for fresh delicacies that gives the consumers the option to venture to add their own specific flavours and tastes to traditional meals like pasta, noodles and bread slices. The pricing is planned to have least of money for best available food in town. The business clients along with visitors in the city shall be attracted due to the quality and price offerings of Bohemian Rhapsody, especially its location on the Ocean Park lane with a port side view (Taylor and Campo-Rembado, 2007). Pricing: The restaurants pricing schemes are made to where the production cost would add 45% of the entire value as selling price. The option for diet Coke and mineral water is also kept for few high value items those would get it complimentary else would be stored for sales. The price should take care of employee salaries and restaurant maintenance and earn the business its break even targets in one year (Reid and Garnsey, 1997). Promotions: The promotions for the Bohemian rhapsody would be handled by the proprietor in the first year where the plan is to use newspaper distribution channels, weather news stations and social media is to be targeted. The Cardiff bay area needs to recognize and have an idea of the restaurants offerings and thus the local channels are given the highest preferences. The plan is to distribute leaflets and menu sheet supplements with the daily newspaper for one week prior to the restaurant opening. The social media would target the foodies and restaurant forums to propagate using Facebook to propagate in and around Cardiff bay (Sba.gov, 2014). The local weather channel would be a good venture considering the local specific reach that the restaurant wish to develop. Distribution: The take away is planning to have an outsourced courier company to carry the food at consumer’s door with only a 7% additional cost. However the business is also planning to have its own delivery vehicle if there are major office lunch-catering contract in the area. Boxes and plates of degradable nature friendly substances are planned to be used as service platter. That way the business wishes to serve the meal on desk for the office going business professionals of Cardiff Bay, once a day. The unit itself would be based out of a rented place at a local public place where the temporary chairs are allowed to be kept. The one who are travellers and wish a bite at the bay can have their meals there while one who wishes to carry can pre-order or choose to stand at one of the three distribution counters at the joint (Kao, 1991). Customer Services: The mission of quality to consumers at competitive price is to a large extending, based on which the fondness for a specific brand of food chain develops (Feldman and Santangelo, 2008). The business is developing a unique line where the consumers have a great option to pick and choose the flavours in their pasta, noodles and sandwiches where the oriental and continental variety of sauces, vegetables, condiments and flavouring spices would be the key for them to choose from (Donovan and Appledorf 1973). This service is however over and above the regular menu items where the mix and match ‘consumer style’ preparations shall form a part of the seasonal main course, prices would be fixed at parallel to vegetarian and non-vegetarian content. Resources for Bohemian Rhapsody The manpower, supply-chain and operations are taken into account to get an idea for the future requirements and sources of funding. The financial institutes would be asking for an project executive summary, that can be build in this process. Finance: The sources of finance to start up a new venture in UK would need a plan that has the qualities of innovation and originality of idea. The bank, financial institutes, equity investment, self funding are various options for Bohemian Rhapsody. For the same the business shall approach the Business Growth service of UK with a Small Business Model (SME). The finance can be crowd funding, debt bond, bank loans, equity share distribution etc but the ideas that the business would present as discussed would be its values, idea, directions for next 1 decades, the capability of generating value, innovation in cuisine mix, growth drive and market expertise of the Cardiff especially the ability of the restaurant to leave a huge impression for Cardiff bay region (BusinessGrowthservice.gov.uk, 2015). We would prefer a crowd funding with the aid of the Authority for which especial schemes for the fund donors shall be rewarded with a life time discount card and as business grows the same shall be valid may be later may be turned into equity with growth. However, the Venture capital investments if any would also be welcomed. Manpower: The manpower resources would include of 3 full time cooks and 2 service and delivery men at all times at the restaurant and take away counters. The service personnel are identified to be given special training to act in substitute role of a cook, whenever needed. The Cardiff city has plenty of culinary training institutes to source the manpower from along with unskilled bunch of young people. A mix of skilled and unskilled (lower cost) manpower is expected to click in keeping the employee cost to limit for the new start up (Danielsen et al. 2009). Supply Chain: The variety of sea food along with fresh vegetable and fruit from the local markets is planned to be sourced. The bulk of the pasta, bread and noodles are planned to be brought in bulk from the discount super markets with necessary flavours and condiments. The distribution in and around the block of the bay can have an order delivered by the local courier company with an additional 7% charge. For pre orders the counter is kept open 8 hours a day five days a week. Communications: The idea is to make a business calls too from the same facility to attract consumers with direct calls and updating them of days speciality. The standards for each specific menu item would be fixed once the operations starts and the best practice for operations also can be framed. These reports would need the actual sales and expenses to substantially standardise each of the offerings (Du et al. 2010). The IT makes the communication via social media reach all not only by transferring the communications in no time but also making it an engaging tool to interact and have a view. This serves as a source of data and idea collection to suitably modify and develop strengths. Once a week discount offers on food is planned but to start the diet coke or mineral water is kept aside. Market Research A survey is planned to be done over a sample size of 100 Cardiff citizen of random and backgrounds. The idea of the expectations can be formed for a more refined flavour selection (Hayward, 1988). The main course remains to be noodles, pasta and bread rolls but the sauces and condiments needs to be assorted with a good evaluation of expectations. Furthermore, the research in the secondary sources about the offerings and substitutes needs to be done to form a strategy of cuisine mix for the pick and choose ingredients that we offer to clients (Bercovitz, 2002). Thus both open ended questions would serve the purpose of price, quality, taste specifications of the Cardiff market. However the equipments those have multiple uses like ovens, microwave cookers, deep frying dips, gas oven, condiment and vegetable display units and fridge are to be used and that’s how the primary menu is set only the condiments and spices favouring Cardiff mass needs to be identified before menu selection (Feldmann, 2010). The menu would act as a differentiator as the other’s go for taste standardization but the bohemian rhapsody would experiment and give clients to experiment and get engaged with the food they eat. The Competitive positioning focus upon the concept of getting the locality of Cardiff bay taste and develop their unique tastes with least variety of condiments. Once consumers have developed their likings the same would be used for taste standardization with alternate names based on the type of condiments used as Pasta China style if it’s adding oriental flavours or as in Noodles Chop Sue style in both vegetarian and non vegetarian styles. The competitors have an influence on take away food concept while the Bohemian Rhapsody would use the taste compatibility each time one visits it thus the operations and the choice of taste for cereals of liking can be offered. This is expected to create a unique position for itself in the Cardiff region. The economy demands operational efficiency thus the business chooses to have a mix of skilled and unskilled manpower with a cost effective production and distribution process. Conclusions The offerings have a uniqueness of taste as the condiments and flavours are to be decided by the clients with the help of restaurant staffs, at Bohemian Rapsody. The pricing in offer is very competitive where the fixed and variable costs are to be distributed on the production and sales for 1 year. The concept wish to challenge the rivals who has established their fast food concepts on standardized recipe while the new venture wish to exploit consumer’s link with food. The take away counter with its distribution chain of couriers can deliver orders at homes too. The option for on the desk catering for ‘white collar’ population of Cardiff, during the lunch hours is also kept open. The promotions strategise the use of media like social and newspaper distribution sources are to be used. The competitive advantage that is opted for is price and quality oriented where the people’s engagement with their food is evoked. The social media is planned to play a larger role in the process. The standardization of menu is being kept to be settled at a later time with the idea of the people’s taste in Cardiff, along its ethnically diverse population. 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