The Problems of the British Restaurant Chain The Spicy - Research Paper Example

INDIVIDUAL REPORT MANAGEMENT IN COUNTRY X - HOW DOES IT VARY ACROSS CULTURES? EXECUTIVE SUMMARY: The present study aims to highlight the problems faced by the British restaurant chain The Spicy while launching and exercising its services in the Asian countries, particularly the south Asian state of India. The study also looks to explore the solutions and remedies for these problems in the light of Cultural Index Theory articulated by Gerard Hofstede, and Porter’s Five Factor Model. Since different cultures and societies maintain different demographic traits and characteristics as well as there is certain divergence in the norms, values, traditions, cult and festivals of the societies at large, the liking, disliking and priorities of the people are also dissimilar from one culture to the other in nature and scope. Consequently, the companies have to conduct an in-depth market research in order to successfully launch their products and services or both. The present report makes an all inclusive analysis of the Indian market in order to check the feasibility of the success of the restaurant in various cities of the country. The researcher aims to apply SWOT analysis in this study in order to present a comprehensive report to the client, where no aspect and area could be left ignored with the market perspective. In addition, the report will also be supportive in respect of guiding the client in recruiting the staff for the chain of restaurant in India. Hence, based on the expertise research, the report encompasses all difficulties and failures in the successful launching of the food chain in this era of perfect competition. TERMS OF REFERENCE: Being the market research consultancy, the Oceanic offers its services to the local, national and international companies, firms and organisations by providing them with the complete information regarding the market situation. It includes the trend of the market, nature, taste and socioeconomic position of the customers and consumers, nature and products of the already existing rival and competitor companies. The research services made by the Oceanic are helpful for the success of newly launched products and services on the one hand, and for the increase of sales and profit volume of the already working firms and organisations on the other. Since the research company has been working dynamically for the last one and half decade, it maintains wide range of clients in its list, which have experienced 10%---25% increase in their sales and profit after hiring the services of the qualitative and quantitative research department of the Oceanic The Spicy Food Chain is the client company of the Oceanic, which has earned respectable name and fame in the food industry. The company has opened its restaurants in commercial regions of England, where it offers multiple English, Italian and Chinese dishes to its customers in a peaceful and tranquil environment. The most distinguished aspect of the restaurant is its different hygienic and delicious ready made food items for the workers, professionals and students, offered as lunch at noon at economical rates. Consequently, a large number of the working men and women visit the restaurant in every area where it has launched its food chain. Hence, the company has got popularity all over England because of its high quality products against reasonable prices. Though The Spicy has captured the attraction and attention of a large proportion of customers in its native country England, it could not obtain too much success in the Indian capital city i.e. New Delhi. The main reason behind this problem includes the unawareness of its overseas department regarding the tastes and flavours the Indians look for in lunch. In addition, the company is not very familiar with the demographical statistics of this south Asian country, as well as with the cultural aspects and religious beliefs. Consequently, the management has hired our services for making their success a reality in this region. OVERVIEW OF THE SITUATION: The Spicy Restaurant had launched its business venture with great enthusiasm and fervour one year before in the capital city of India. However, it could not meet with the sound response as it had been being expected by the ownership. Consequently, they directed the overseas management to discover the reasons behind the failure of business venture in India. The manager sought our services in this regard, on the basis of which we conducted an in-depth research analysis of the firm in the light of the demographics and cultural traits of India. Here we applied Hofstede’s Cultural Index in the study while making comparison of India and England in order to estimate the areas and volume of difference between the two countries. Since businesses have become global in this globalisation age, no corporate activity can be confined to one cultural group, community or nation. “Business has entered”, Ball & Wendell observe, “into the era of the one-world market. Increasingly, companies are going overseas to attain sales and profits unavailable to them in their home markets.” (1993, p. 6) Famous Dutch theorist Gerard Hofstede has articulated his cultural theory in the form of an index model in order to present the different cultural aspects through the index through comparative analysis. The present study also makes the comparative investigation of the native state the restaurant i.e. United Kingdom with the country where The Spicy intends to expand its corporate activities, which is as following: The first dimension of Hofstede’s culture index focuses upon Power Distance Index, which simply describes the extent to which the individuals and institutions belonging to the less powerful countries view inequality in respect of the distribution of power. By making a comparison of the cultures of the UK and India, it looks crystal clear that the UK contains imperatively low level of inequality among the positions and statuses of individuals, while in Hong Kong, it is far higher, which proves the very reality that in Asian countries the distribution of power and position is unequal one, while the western societies observe lesser power distance in their scope. Table 1 Country Power Distance Index % United Kingdom 35 India 77 Figure 1 The second dimension of the Hofstede’s index i.e. individualism vs. collectivism shows that the UK society lays stress upon individualism and take the individual triumphs as the sign of accomplishments. Similarly, they prefer to work individually and take decisions regarding their personal, commercial and social activities individually. On the contrary, in Indian culture, working, dining and getting involved into recreational activities are performed on collective basis. It is therefore, the people are closely tied with one another in the cultural and social bounds in India and display integrity and strength for the fellow-beings; whereas the people in the UK have least care of the collective behaviour, and thus lack collectivism as well as “we” feelings at societal and national levels. Table 2 Country Individualism United Kingdom 89 India 48 Figure 2 The third of the Hofstede’s cultural dimensions focuses upon how much masculinity a society contains in its behaviour and performances at cultural level. Hofstede views antagonism, ambitiousness, impoliteness, and ferociousness as masculine characteristics, and courtesy, child care, close relationships, concern and empathy as feminine traits. While applying it to the countries under study, it becomes clear that the UK observes high masculinity level in comparison with India, though divergence level between both the countries in respect of masculinity is somewhat low. Table 3 Country Masculinity United Kingdom 66 India 56 Figure 3 The fourth cultural dimension of Hofstede’s index describes Low vs. High Uncertainty Avoidance Level. Uncertainty avoidance index refers to the power of the individuals to endure any uncertain and tentative situation. Countries make rules and regulations, and introduce laws for the implication of such rules and principles, which is highly supportive in respect of evading and escaping uneven, unexpected and ambiguous state. The cultures carrying low uncertainty levels abide by the rules and regulations as well as prevailing social norms and values even while undergoing crises. In the same way, people do not leave one another under unpleasant and uncertain circumstances; even employees do not leave their organisation in the lurch in low uncertainty level countries. On the other hand, in high uncertainty level countries, mobility from one institution and organisation is very popular, and people prefer to be flexible for their personal and professional uplift and growth. Hofstede’s index shows that India observes high uncertainty avoidance level, as they strictly observe rules and regulations in their everyday activities, whereas in the UK the uncertainty avoidance level is very low that depicts that people are less careful regarding breaking of law and rules, though they appear to be more loyal to their culture and organizations in Hong Kong. Table 4 Country Uncertainty Avoidance Index United Kingdom 35 India 40 Figure 4 The fifth and final cultural dimension depicts the people’s sticking to their traditions, conventions and values during their interaction with society. Hofstede states these factors depict the long and short term orientation of the people while entering into social and commercial relationships. Hofstede declares fortitude, alertness and austerity as the factors behind long term orientation, while individualism, opposition of change, personal affiliations and affection as the symbol of short term orientation. The score in the graph depicts that the Indian subjects strongly believe in long term relationship during their daily transactions. On the contrary, the British have lesser inclination towards in long term relationship, and firmly stick to the rule of get and forget in their life. Table 5 Country Long-Term Orientation United Kingdom 25 India 61 PORTER’S FIVE FORCES MODEL: The researcher has included Porter’s Five Forces Model in the present study in order to analyse the corporate affairs of the company under examination. The model is articulated and attributed to famous theorist Michael E. Porter, who introduced this theoretical framework in 1980 in order to provide a critical investigation of the firms and organisations in the light of fast changing business environment at global scale. The theorist submits to state that five factors play decisive role for devising, analysing and revising of the strategic plans and corporate schemes of the organisations. These forces include: 1. Bargaining Power of Suppliers 2. Bargaining Power of Customers 3. Threat of New Entrants 4. Threat of Substitutes 5. Competitive Rivalry between Existing Players The supplier is, according to Porter, the individual or company liable for providing raw material to the organisations. Here, the raw material includes the fresh and hygienic meet, vegetables, fruits, nuts, beans, bread, rice and other edibles necessary for the restaurant for preparing food for its customers. If the organisation maintains sound relationships with the suppliers, it would be in a position to obtain fresh and high quality material on time against economic prices. On the contrary, if it is unable to have good contacts with the suppliers, its schedule and material as well as all business activities would be at stake subsequently. Bargaining power of customers is also an important force with Porter’s viewpoint. It is crystal clear that customers are the factor around which all commercial activities revolve. Consequently, every commercial office, shop, organisation and institution is directly dependent of the customers and consumers in general. Thus, the organisations capturing the attraction of the wide range of consumers and clients can make huge progress and earn huge profit provided they are in a position to capture the attention of the wide range of consumers. The Spicy would have to launch a powerful advertising campaign through the internet, cables TV, bill boards and print media in order to attain the attention of the customers. Porter also concentrates upon combating with the threat of new entry into the same business. However, being itself a new entry, this factor is not a challenging thing for the restaurant under investigation. Somehow, it must learn the art of keeping the already existing clients in its control in order to avoid any threat in future. Nevertheless, threat of substitutes serves as a great challenge for the restaurant. It must regulate its commercial activities and corporate performances in such an alluring way that could retain the range of consumers even substitutes exist in the market. If the entry barriers are low and flexible, it is very easy for the new entrants as well as for the substitute brands to introduce their business ventures within the particular industry. In order to combat this challenge, the already existing firms have to improve and maintain the quality of their products or services or both on the one hand, and control the price of the products on the other. “A real challenge for the firms”, according to Bennett III, “is to capture, control and develop a working knowledge or interpretation of both the internal and external environments of the firm. The top management teams of organisations should go to great lengths to develop useful interpretations of the organization and its environment.” (1998, p. 590) Competitive rivalry is also an imperative factor for the corporations. Porter observes that if entry in a business is comparatively easier one, the intensity and scale of rivalry and competition would certainly be high in the business. Since food, dresses, education and medicine are essential elements for every human without discrimination, the competition standards are vehemently exigent and demanding in these departments. The same is applied by the restaurant under study, which has to combat with high competition level while exercising its corporate strategies in India. ANALYSIS OF THE SITUATION: SWOT Analysis of the Spicy: SWOT analysis examines the strengths, weaknesses, opportunities and threats related to the firms and organisations. While analysing the strengths of the Spicy restaurant, it looks crystal clear that its highly qualified staff members, well decorated, neat, clean and alluring environment, high quality food, exemplary relations with the suppliers, contacts with the wide range of clients and customers, facilities including Cables TV services, area for the playing of children and economical rates are the strengths of the company. Moreover, since India had been one of the colonies of British Imperialism for ninety years, the British companies still fantasises the Indian subjects. In addition, the Asians look at the European products and services with great envy and it is a fashion for them to consume foreign goods and commodities. The good name and fame of the restaurant chain is also an imperative strength for the company, the plus point in the form of its long experience in the food industry also adds to its strengths. While making the assessment of the weaknesses of the restaurant, the most important one, on the basis of the findings made by our research team, that the Hindu population has quite opposite tastes in their dining tables, as an overwhelming majority of them does not eat meat. Somehow, the minority communities including the Muslims, Sikhs and Christians often take it in routine life. Furthermore, Indian people consume some specific local dishes, which have no match with those of the British dishes and drinks. Moreover, presentation methodology is also different in this south Asian country, as joint eating is popular in India. However, different castes and communities seldom inter-dine, which also creates fuss for the foreigners, as dining in separate dishes and separate tables on the basis of caste, class and community is the Indian tradition only. Another important difference between both these cultures in this that the proportion of working women in India is far lower than that of the UK. Moreover, a significant part of the elderly does not work in India; consequently, offering lunch at noon only does not earn huge profit for a restaurant. Since fast food is becoming very popular in India, so a restaurant without offering fast food is mere a failure in contemporary society. Further, since the Indian authorities are extremely interested in bringing foreign investment in the country, they would also provide maximum facilities and opportunities to the companies. Additionally, being the second largest country of the world with the population over 1.1 billion, India is the golden land for the companies because one seventh of the total global population lives in this one single country. The company also undergoes several threats too that include the high tax policies of the government, harsh and strict policies towards the foreigners in comparison with the local brands and industries. Another threat faced by the restaurant is this that since hundreds of thousand other food companies have already been working in India, so the restaurant would have to make very hard efforts to survive in this multicultural land. SOLUTIONS AND RECOMMENDATIONS: The Spicy must look into the following issues while launching its business venture: It should open more restaurants in important cities of India particularly in Mumbai, Agra, Chandigarh, Faridabad, Chennai, Calcutta, Hyderabad, Bangalore, Pune, Ahmadabad, Kashmir and other cities in order to extend its commercial activities all over the country. The company must hire the services of local citizens in management, finance, cooking, marketing and other departments in order to increase the interest of local communities. It will surely be supportive in making alterations in the dining set up of the restaurants according to the local demands. The company should also hire native chefs, who have command over preparing and presenting the local and traditional dishes for the customers. It will certainly enhance the sales volume of the country. The company should also prepare fast food items for the workers and employees in commercial areas of the country. In addition, it should announce different packages for the elderly and children to ensure their entry in the restaurants. The elderly are particularly regarded in Indian culture, and their liking and tastes are given especial importance at family level. The company should make arrangements for the classical, folk and traditional Indian music for the young and old customers alike to make the environment more exuberant and bewitching. In addition, since still the Indians like to dine separately with family, separate dining halls must be established for families, ceremonies and corporate functions. The company should strengthen its relationship with the suppliers and authorities in order to get everything on time as well as in better quality. The company should not promote wine through its platform, as it is prohibited in Indian culture. The company must pay due heed to its advertising campaign through the electronic and print media, so that maximum number of people could get acquaintance with the product. In addition, decoration of the restaurant must be peaceful and tranquil according to the demand of the masses. FORECASTS AND OUTCOMES: Every corporate activity demands devising, analysing and revising of strategies according to the changing market scenario. All organisations”, Johnson & Scholes maintain, “are faced with the need to manage strategies: some developing from the position of strength; some needing to overcome significant problems.” (1993:3) The same is applied with The Spicy. Though recommendations have been made in the following lines, yet comprehensive examination of the organisational structure and operations is a must for the achievement of established targets and goals. However, in the light of the above-described state of affairs, as well as the recommendations made, there are extreme probabilities of the growth and development of the company for the future years to come. The company may earn huge profits by inaugurating its hotels in commercial zones of the big cities and towns. Hiring of qualified boys and girls as business executive and marketing personnel will also be helpful to popularise the commercial ventures of the company. The inclusion of fast food, sea foods and traditional dishes is sure to multiply the sales and volume of the business of the company within six months or so. BIBLIOGRAPHY: Ball, Donald A. & McCulloch, Wendell H. (1998) International Business: Introduction and Essentials. Seventh Edition. IRWIN, INC. Bennett III, Robert H. (1998). The Importance of Tacit Knowledge in Strategic Deliberations and Decisions Management Decisions Volume 36 issue 9. Hofstede’s Cultural Dimensions Index. Retrieved from http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=7&culture2=39 Johnson, Gerry & Scholes, Kevan. (1993). Exploring Corporate Strategy. Text and Cases. Third Edition. Prentice Hall New York. Appendix A Hofstede’s Culture Index Model Appendix B Porter’s Five Forces Model Read More