E- Strategy of Raymond Cafe: the Competitive Advantage - Assignment Example

? Full Paper A small restaurant d as Raymond Cafe is established with a reputable food menu and loyal base via a competitive advantage. As new competitors are establishing in the city, the cafe needs to upgrade its business processes and strategies equipped with information systems. The competitive advantage will be achieved by building an E- strategy to promote the business in a new innovative way, the creation of an online community in the form of a website, providing wireless surfing of Internet, using customer relationship management systems for improving marketing campaigns and sales strategies, to deal with unique ethical and information security predicament, improved project management procedures to implement elucidations and to understand by analyzing a new dimension of technology implementation within the business. 2 Introduction  We have selected a small restaurant that provides food for the locals, the name of the restaurant is the “Raymond Cafe”. It offers many special kinds of coffees, tea, home-based sandwiches, soups, salads and continental dishes. Over the last five years, business has been dilapidated steadily. The cafe is not operated in the capacity of current technology trends and procedures. There are no computing devices in the cafe which may enhance the cafe operations and procedures. The information of the customers and orders is stored manually. The clientele and food recipes are also not written anywhere. The supply chain management is manually recorded in a notepad along with the salaries of all staff of the cafe. Information regarding the marketing coupons is also stored in the notepad. 3 Competitive Advantage  The analysis related to competitors in the area needs to be carefully analyzed before setting up a strategic plan. The competitive advantage is the conclusion of the unique strategy of the cafe which cannot be adopted by the competitors. The unique strategy includes customer loyalty at its best which also a vital element for a successful business. An easy definition of Competitive advantage is “when the firm has the capacity to differentiate from its rivals, when it is able to create more economic value than competing firms” (Lowe, 2013). For entering “Raymond Cafe” in a new demanding industry, Michael Porter’s five forces model will assist the evaluation of the challenges. The model will assist to conclude the relative attractiveness of an industry. In Fig 1.1 Michael Porter’s five forces model is illustrated. The threat of new entrants, suppliers, buyers and substitutes is directly impacting on the centralized hub which is the rivalry among existing competitors. These are many restaurants in the city which offers the same range of products and prices. There are also rumors that Starbucks is opening soon just a few blocks away from the cafe. The staff of the cafe is worried on the current operations of the cafe which they think are incompetent. The staff needs a motivation in terms of technology which assures that the competition will not influence the business and customers. Segmenting the competitive advantage on Porter’s Five-Force analysis, the buying power needs to be overcome. A strategy is required to address the concerns of the employees. Customer loyalty programs are required for enhancing customer satisfaction and experience at the Raymond Cafe. For an efficient customer loyalty programs, integration of Information technology is essential to track and inform the customers about the new products and prices on the Internet. Customer loyalty programs are the most popular marketing strategies adopted by organizations across a variety of industries. Programs that are alleged positively by customers will in turn create strong mind-set of customer loyalty and higher customer revenue (Furinto, Pawitra, & Balqiah, 2009). The cafe should offer a unique menu which other cafes do not offer enabling the alcove dining experience that can only be purchased at the cafe. The existing cafe has a small Supplier power force to compete. There is a wide variety of suppliers for selection. Google extracts results for searching “restaurant supplies” about seventeen million two hundred thousand. Every 10 websites out of 50 have mentioned toll free number to communicate with and place supply orders. The websites of suppliers offers convenient delivery options with a variety. If the experience is not good regarding the supplier services and operations, another supplier can be selected from the website just clicks away (Walder, 2013). If the buyer power is relatively high then the threat of substitute products or services is high. There are numerous products and services representing the identical services and products. This threat is differentiated from buying power and emphasize on specific products the cafe offers. If a cafe is offering a particular unique item, it means that the cafe has effectively lowered this threat. The only switching cost the cafe has to bear is the distance which the customer has to travel to the restaurant and the prices of the meals offered by competitors. The cafe has to maintain a unique collection of recipes as compared to other cafes is the paramount strategy for keeping this threat to least. The threat of new entrants is high when the cafe has a low supplier power to challenge with. It concludes that the entrants also have a low level of difficulty to achieve what they require to initiate a cafe. Customer loyalty and collection of unique and established recipes cannot be purchased by money. For starting a new business, it is easy for a competitor to manage what is required for setting up a new business but it is not easy to attract the customers who have developed regular dining practice of eating traditional recipes by replacing them with the new inexperienced recipes cooked by new chefs. Rivalry among existing customers is present when there is the possibility of large number of restaurants available. Competitive prices will add the cafe in the list of affordable cafes as compared to other competitors. Service with better price and the unique menu will definitely make the customer joyful. Looking from a broader perspective to the food industry, the Raymond Cafe operates in sky-scraping competition, buying power and new entrants. The focused differentiation strategy will be beneficial as it will tackle the forces which are acting as a barrier for the cafe. The Raymond Cafe can offer unique high quality recipes for its customers, which are revolutionized for over 50 years and none can offer. 4 E business Strategy The Raymond Cafe will emphasize on using Self serving technologies (SST). Self serving technologies include interactive voice response systems (IVR’s), Installation of interactive kiosks which will be accessible by the customers not having laptops, an interface via a website to pay online. The Raymond Cafe needs to implement E business solutions on a range of business operations and procedures. The first step is to develop a system in which all the information regarding the recipes can be stored. Knowledge management systems have immense potential significance to business managers as well as to the functions of Information systems (Acton, 2013). Apart from the recipes, information related to customer service including customer reviews, dissimilarity can also be recorded helping the Raymond Cafe to convert the today’s leftovers in tomorrow’s special for customers (Isaca, 2012). Customer relationship management system is a vital element for improving and providing better customer service. The customer relationship management system prioritizes customers who are spending healthy quantity of money to offer them fringe benefits and bonus meals. The reward system will work on the parameters of total money spent so far by each customer resulting in a proactive strategy for improving customer relations. The system will attract new customers as well as maintain a satisfaction level of existing customers. The system will provide the in depth detail to the employees of the cafe to identify loyal and potential customers. The system will collect information related to business intelligence by categorizing customers with their spending habits. The launch of a website will certainly improve business and the image of the cafe in the digital world. The website will include the current menus, specials and events occurring in the cafe. Customers can review what the cafe is offering in terms of meals and specials. Customer feedback will helps the cafe to know, which meal is gaining popularity as the customers will demand for specific meals along with the prices. Integration of E commerce will enable the cafe to take orders online. Customers can pay via credit card and the cafe can prepare their meal before they reach the cafe so that it can be served instantly. For socializing the cafe and providing a value added service to the customer, availability of wireless Internet connectivity is a vital element. Cafe is no more for just eating and drinking. Customers often bring their laptops and can be facilitated by Internet. The presence of the cafe will also be listed in the cities free Wi- Fi spots. Advertisement on the Internet can also be considered which will generate additional revenue. Customer who does not have a laptop can access kiosks. Likewise, the Kiosks will definitely add the competitive advantage as there will be no other cafes to offer them. 5 Ethical and Information Security Dilemmas A strategy must be defined for providing free meal coupons to the customers. Organizations are frequently implementing mobile media for promotional services via short message service. A Survey of 370 mobile phone users was conducted in Austria indicating that the attitude of the customers towards mobile coupons affects their intentions to redeem these coupons. There must be a verification mechanism of these coupons. The mobile coupons should be associated with the unique ID for verification. The coupon should be in the form of text message otherwise the customer has to download it in the case of MMS. There are lots of spam text messages received by the customer; will they accept the coupons in the form of text messages which will give negative impact of the cafe? The frequency of transmitting the mobile coupons should be low to avoid this factor. Mc Donald has implemented the largest UK retail mobile marketing campaign. For detecting the cell phones and phone numbers with the help of the wireless network, marketing mobile coupons is not acceptable in this way. The Coupons will have Unique ID printed in the text message. Customers who are reluctant to send SMS to the system in order to receive a coupon are connecting their phone number to the unique ID. This offers a great prospect for gather information regarding customer activities. If the same number appears attached to multiple coupon unique IDs, then the customer is using the system to its full potential. If a new phone number penetrate in the system, it indicated the presence of a new customer or less likely old customer has a new phone number. A mobile coupon campaign has an established history for identifying customers who have not been in the cafe for a long time. The coupons are forwarded to other cell phones which allow the cafe to establish networks of customers. This information is precise and very effective for the cafe to know the communities of people who frequent visit the cafe. The identification of customer who has forwarded on their coupon, allows the cafe to give reward to that customer for the referral. If unique IDs are connected with a data of sale record, then other items which the customer has purchased can be identified. 6 Customer Relationship Management As four new espresso machines are installed in the Raymond Cafe, at peak hours customer have to wait or make lines for frappachunios and cappuccinos as the demand for these two drinks is increasing. As wireless connectivity is available a message can be launched for the users who are already connected to the wireless network on the cafe. The text message including you tube link can also be send to the users on their cell phones. They can view the message by clicking the link, which will redirect them to YouTube video. Those customers who wish to access kiosks will receive the link for viewing the message available on YouTube. Before adoption this approach for better customer relationship, bandwidth requirements can be reviewed in order to broadcast the message to the frustrated customer via YouTube fluently. Systems Development  A consultant is given the task to build the timesheet component of the Supply Chain Management system for the Raymond Cafe. There are some vital elements which needs consideration. Before selecting vendors for the development of the organizations core business software, some questions are necessary. What is the qualification of the consultant? As compared to the revenue the cafe is generating, in-house development cost for software development is it the best option? The consultant’s experience will also be considered. He has designed systems of similar capacity and function before? Accountability is a very crucial factor as the cafe has not much to lose. If the consultant develops a payroll system having bugs and deletes the records of the payroll of the employees and in the worst scenario the hard drive crashes including the database of all employees and customers. What is the backup procedure? How the consultant will provide support for the system he designs? He is available on phone support or he will locate himself within the cafe and provide support when the payroll printing is in progress or promotion coupons are printed. What will be the support timings? Will he be appointed in the cafe or just give part time support to the cafe? As compared to the above scenario, COTS product is available from a well-known reputable vendor with proper documentation and support. Documentation is the only essential element the organization possesses when a small system with no technical staff is implemented. The software house has self-service IVR and a 24 by 7 hours support center. The customization of the system makes it feasible for the organization in a long term perspective. The evaluation of COTS system needs to emphasize on the customization which will support the evolving business of the cafe. A system which can take place in between these two is Microsoft access based system. A system based on Microsoft Access is not too complicated. There are wizards for creating each function making it easy as compared to other database systems. Developing a system based on Microsoft access by the consultant, will also be a consideration as the staff adaptability of Microsoft access is relatively higher as compared to the in-house development system and the vendor based system. It is not easy to evaluate the adaptability factor of the employees regarding the time keeping system. Those employees lacking experience with computers will find it difficult to deal with and can be stressed out. When the staff do not know how to navigate from field to field by using keyboard shortcuts, it is difficult to conclude the efficiency of the system rather than entering the data on paper. The old employees will not be entertained by giving presentations of benefit on saving and entering data in the system which may force them to use the system. The factors related to cost savings and organized reports related to the cafes overall success, will encourage them more as compared to presentations and discussions. If the employees are encouraged, they might give their suggestions resulting in improving the overall system. 7 Conclusion  Raymond Cafe has capacity to compete with the current competitors in the digital economy. The cafe can enhance business by injecting information technology best practices and current trends in the cafes infrastructure. By scrutinizing a focal point which is differentiation strategy, marketing the unique menus along with revolutionary items that only Raymond Cafe will offer, the business will be a success in the restaurant industry. Knowledge management systems, customer relationship management, wireless Internet and business intelligence systems will contribute to all aspects of the business. The website will provide the interface to communicate with customer and place orders online, increasing revenue and better customer services. Mobile coupons will definitely add a value to the customer satisfactory, as the coupons will be received in the customer’s cell phone. The system development can be conducted on custom based system design by the consultants or from Microsoft Access as a backend. The strategy of motivating older employees will be conducted by perusing them the factors related to the cafes success rather than providing them technological advantages. Overall wide varieties of Information Technology enabled business process are discussed along with their strategies. References Acton, Q. A. (2013). Issues in information Sciencea€”Information technology, systems, and security: 2013 edition ScholarlyEditions. Isaca. (2012). CGEIT review manual 2013 Information Systems Audit and Control Association. Lowe, D. (2013). Commercial management: Theory and practice Wiley. Walder, J. (2013). A critical evaluation of michael portera€™s five forces framework GRIN Verlag. Images Buggey, T. (2007, Summer). Storyboard for Ivan's morning routine. Diagram. Journal of Positive Behavior Interventions, 9(3), 151. Retrieved December 14, 2007, from Academic Search Premier database. Read More