Restaurant Industry Overview: Comparative Analysis of *3 Qualitative Interviews - Case Study Example

Restaurant Industry Overview Key Drivers and challenges in the Restaurant Industry One notable aspect about the growing restaurant business is the ability to make good use of the different aspects that define it. In the growing economies across the world, the restaurant business only makes good use of the contributing factors that improve and increase economic growth and contribution across the country. In most countries especially across Europe, the characteristics of the restaurant businesses are mainly entrenched in their contribution, directly and indirectly, to the economies of individual countries (Switzer 2007: 59). The key drivers of this industry mainly lie in its direct economic contribution through the increasing employment opportunities that cut across the board, as well as its contribution to the tax contributions (Hänggi 2009: 109). It has a workforce of close to 10 million people across Europe, providing a turnover of more than one trillion Euros, which is almost equal to 8% of the total economic output in the euro zone. In 2010 alone, the industry contributed to approximately 126 billion Euros to government treasuries in excise duties across the euro zone, something that boosted the recovery of many economies in the area after the financial crisis (Ramanathan & Ramanathan 2011: 212). Its multiplier effects also make the restaurant flourish even further, providing more advantages to those investing in the industry. Competition is increasing on a daily basis and this provides more chances of moving from one area to the other. The sector also supports more than 16.6 million jobs across other sectors, which represents a whole 7.8% of the workforce in Europe (Claviez 2013: 159). It directly influences the agricultural and manufacturing industry as well as a key driver in the tourism industry. The availability of the labor and resources within the various locations is a big opportunity for growth, allowing the society to gain in meeting the needs of those supported by the industry. This makes it better and easier to attain the constituent ingredients for a successful industrial growth. The increasing support from governments has also made it easy to achieve the benefits that many elsewhere consider as trivial (Melia 2011: 222). The challenges are mainly based on the state of the economy. Reduced incomes lead to lower buying powers and that means that the growth of the society will always be limited to what can be achieved within the available platforms. Competition is another challenge especially amongst the luxury and business class hotels, which have to make good use of the space available. A meltdown in the economy will also be a great impediment to the growth of the industry, hence making it difficult to meet the general demands of this industry. Brief Company Profiles The Hilton, the Intercontinental, and the Warwick International hotels are some of the most famous in the industry, providing a host of services to the growing needs of the society. The restaurant industry has provided so much for these three big hotels, setting their locations in various countries across the world. This gives the exposure required to meet the demands within the industry. The Hilton hotel is one of the leading restaurants in the world, leaving a mark in every country it is situated in. it handles both the luxury and business classes of people with their services ranging from offering of accommodations to foods and beverages as well as business meeting spaces. This has allowed it to harness the maximum potential in its locality, setting base in more than 4,200 locations worldwide. The idea was to improve on the growing need for a stable market through which clients could benefit from the services offered (Ottenbacher & Harrington 2009: 536-7). The Intercontinental hotel has also been a major player in this industry, giving the established entities like the Hilton considerable competition to establish its own niche market across different parts of the world. Compared to the $8billion annual revenue the Hilton garners today, the Intercontinental has revenue close to $ 1.8 million, showing the disparities in the industry. Those with more outlets benefit the most. Warwick hotel, on the hand, is a global hospitality industry that has locations in 30 countries, showing the ability to meet the demands of this growing industry across the world (Ottenbacher & Harrington 2009: 539). The customers vary from leisure to business clients, which make it easier to deal with the growing demand for the utility of the resources available. Key Performance Indicators Given these three hotels, it is easy to set a precise target to measure their performance across the industry. The important thing is to establish new platforms that assure them of profitability. The importance of meeting the general demands of the society at this juncture border on getting the desired customer base that emanates from offering quality services (Pitta 2010: 133). The three major hotels understand that customer relationships are the most important in meeting the growing need for establishing their services closer to the clients (Kincaid, Buloglu, Mao & Busser 2010: 215). The expansion to new locations is an indicator of growing demand within the industry, and Hilton shows this best, given the $8billion revenue accrued from its services. Such huge revenue will boost the economy greatly. Increased customer base is an indicator of growing service quality. The demand created by good services offers any restaurant company a huge advantage over competitors. In many areas, the need to boost performance is based on the ability to interact with different persons while meeting the general demands of the hote (Kincaid, Buloglu, Mao & Busser 2010: 216). An increase in the number of rooms for each hotel shows an increased occupancy rate as well as an increase in the RevPar which show a healthy ADR within the growing economic space. The impact should be real and this is a good pointer towards the needed revenue collection (Pitta 2010: 133). Justification for Choosing these Employers The hotels chosen for this report have a unique set of provisions that set them apart from the rest of the restaurants within the group. Ideally, they present the society with increased opportunities to choose from. They are uniquely placed in meeting the main demands of the society, assuring them of growing their revenues by providing what clients want. They are also a good place to grow one’s career in, allowing me to make the best of my skills and competencies within the industry. They are places that will grow my confidence in dealing with the accounting arm of the hotel, as they handle millions of money annually as well as an increased need to maintain the profitability streak. I will have to work harder to improve relationships between the company and the investors, which is an important bond for any company that seeks to make a good impression in the industry. It shows a great deal of potential for my ambitions, and these three employers have what it takes to push me to my limits career wise. The three employers have vast experiences in the restaurant industry because they learn from various situations across their locations. The first one was the chief accounting officer at Hilton Hotel. The other was the chief finance officer of the Intercontinental Hotel. The other person was a deputy assistant to the CFO at Warwick International Hotel. The three assisted in evaluating the hotel industry business from their continued existence in the industry how much they can change what they have, and how the changes will affect their business. Based on the forecasts made, these employers can make the company grow or shield it from making more losses in case there is a financial crisis. Soft and Hard Skills The restaurant or hotel industry looks at both the impact that the hard and soft skills possessed by an employee will have on the business. Hard skills needed in this industry include those that focus mainly on the training and education to deliver effective job performance. These skills include improving the efficacy, accuracy and responsiveness that increase on the technical and operational actions within the job industry. Hotels require a great deal of work to ensure that the inquiries made in the accounting arm of the company reach the desired level of operation (Hartwell & Edwards 2009: 909-11). Most companies fail because the training given to their accountants does not meet the intensiveness of the industry’s growth rate. The soft skills include those behaviours that directly have an influence on the impressions and feelings within the system. They work on improving and increasing their personal skills as a way meeting their personal and corporate objectives. This may include good communication skills, positive influences on attitudes, authenticity, awareness, leadership and empathy within the company. This boosts the interactions between employees, and makes it easier to achieve the desired attention (Hartwell & Edwards 2009: 912-4). Based on these two skills analysed, my MBA certificate will be of great assistance because it covers these skills in various learning sessions. The main idea is to create a platform that provides me with the growth of my capabilities within this industry. Ideally, the MBA will also assist in making good use of the potential within to develop and grow these hotels to higher revenue capacities than they get currently. Frameworks The McKinsey’s GE focuses on the ability to meet attractiveness and competitiveness of the hotel within its industry. This is an important framework, which will boost the revenue and profitability of these hotels because it can meet their growth and stability needs. By using the framework ardently, the hotel will ably understand its weaknesses and strengths, and learn how to leverage its services in the competitive market. It is also a good way of strengthening the strong businesses and making sure the unattractive features are dealt with accordingly (Alonso & O’Neill 2010: 1178-9). It is a good way of examining the market share, growth in the same, as well as the importance that the brand equity plays in attracting and retaining loyalty amongst clients. The capacity of production is also noted in this as it allows managers to plot their profit margins relative to the competition from their main rivals. Further, the attractiveness of the industry is tested at this level (Alonso & O’Neill 2010: 1181). Justification for Questions The interview questions were set to improve knowledge on what makes the restaurant industry such a big and profitable entity. In many countries, the restaurant industry survives because of raw materials. The interview was to check on the impact this had on the economy, employees, as well as the general society. For the chief accounting officer at Hilton Hotel, the supporting question was what his position was in the organization. For the chief finance officer of the Intercontinental Hotel, the supporting question was based on the way he answered the same question as Hilton’s CFO. The deputy assistant to the CFO at Warwick International Hotel answered the same question satisfactorily. The question was aimed at showing how different levels of engaging with members within the accounting department were educative. References Alonso, A.D. & O’Neill, M. (2010) ‘Small Hospitality Enterprises and Local Product: A Case Study,’ British Food Journal, vol. 112, no 11, pp. 1175-1189. Claviez, T. (2013) The conditions of hospitality: ethics, politics, and aesthetics on the threshold of the possible, Bronx: Fordham University Press Hänggi, C. (2009) Hospitality in the age of media representation, New York/Dresden: Atropos Press. Hartwell, H. & Edwards, J., (2009) ‘Descriptive Menus in Branding in Hospital Food Service: A Pilot Study’, International Journal of Contemporary Hospitality Management, vol. 21, no. 7, pp. 906-916. Kincaid, C., Buloglu, S., Mao, Z. & Busser, J. (2010) What Really Brings Them Back? The impact of Tangible Quality on Affect and Intention for Casual Dining Restaurant Patrons, International Journal of Contemporary Hospitality Management, vol. 22, no. 2, pp. 209-220. Melia, D. (2011) Trends in the food and beverage sector of the hospitality industry, Dubrovnik, Croatia: EuroCHRIE Conference. Ottenbacher, M.C. & Harrington, R.J. (2009) ‘The Product Innovation Process of Quick Service Restaurant Chains’, International Journal of Contemporary Hospitality Management, vol. 21, no. 5, pp. 523-541. Pitta, D.A. (2010) ‘Product Strategy in Harsh Economic Times: Subway,’ Journal of Product and Brand Management, vol. 19, no. 2, pp. 131-134. Ramanathan, U. & Ramanathan, R., (2011) ‘Guests Perceptions on Factors Influencing Customer Loyalty: An analysis for UK Hotels,’ International Journal of Contemporary Hospitality Management, vol 23, no. 1, pp. 7-25. Switzer, J.B. (2007) "Hospitality" in Encyclopedia of love in world religions, Santa Barbara, CA: ABC-CLIO. Appendix Interview group questions 1. What position do you hold at your company? 2. What are the key drivers in the restraint industry according to you? 3. Do you think there is much being done to make the industry as competitive as it should be? Why? Why not? 4. Are economies recognizing the impact the restaurant industry has? How? 5. What can you say is the driving force based on your company profile? 6. What do you consider as the most important soft and hard skills within the restaurant industry? a. Are they as common as they seem? b. How do you improve on them? 7. What model is ideal for your hotel? a. Does it make a huge difference when it comes to the choices made in increasing market share? How? b. What value is added by using this framework on capacity of production? Read More