Food and Beverage Management - Case Study Example

S’ Bagger Restaurant Case Analysis Name: Lecturer: Course: Date: Table of Contents Table of Contents 2 1.0 Introduction 3 2.1 The unique selling point of the 's Baggers Restaurant 3 3.0 SWOT analysis for the 's Baggers® Restaurant technology 5 3.1 Strength 5 3.2 Weaknesses 5 3.3 Opportunity 6 3.4 Threats 7 4.0 Concept as a potential customer 7 4.1 Positive features 7 4.2 Negative features 8 5.0 Concept to the idea as a manager 8 5.1 Positive features 8 5.2 Negative features 9 6.0 Three consumer trends 9 6.1 Rise of value-conscious customers 9 6.2 Growth of domestic tourism 10 6. 3Brand as driver of growth 10 7.0 Hospitality Systems concept analysis 11 7.1 Menu 11 7.2 Facility design 11 7.3 Product flow 12 8.0 Conclusion 12 9.0 References 13 1.0 Introduction The hospitality industry has often revolved around customer service and customer satisfaction (Chen 2011). Still, focusing on the most significant industry trends can help the hoteliers to understand what the customers want since businesses that exceed customer expectations are often in high demand (Deloitte 2010). The industry trends have veered towards technology advancements to cut costs and improve customer experience (Hotel Managers Group 2013). Examples include s' Bagger Restaurant which has invested in technology in all facets of customer service to increase efficiency and reduced cost. This paper presents a case analysis of the restaurant. 2.1 The unique selling point of the 's Baggers Restaurant The restaurant’s unique selling point is its technology. The restaurant uses a technology that transports meals and drinks on metallic tracks to customers through gravity once they make their orders using a touchscreen. Unique selling point (USP) is the consideration or factor a business presents as the reason its products and services are different and better than that of the competitors. ‘s Bagger relies on its innovative technology as a unique selling point on which it pegs it marketing strategy. Talabi et al (2012) suggests that businesses should peg their USPs on the “four P’s” of marketing, namely promotional strategy, product characteristics, placement strategy, price structure. In turn, it should be manipulated to provide a business with a market position that makes it strategically unique from its competitors. In the case study, the s’ Bagger hotel has pegged its USP on product characteristics, which it manipulates to give its position itself in the market. The USP gives the restaurant location, value and comfort advantage. Indeed, Hemmington (2007) argues that an effective marketing proposition should integrate the three elements to create an unambiguous concept of the hotel. In which case, if the hotel is uniquely reliant on the three elements, then its USP is effective. In regards to location advantage, the restaurant is set in Nuremberg, Germany where violating a patent is a criminal offense that is treated seriously. This also means that it is unlikely that its patented technology can be violated. As stated in the case study, the German Patent office granted the restaurant the technology in 2007. Indeed, it is yet to be replicated elsewhere in Germany. In regards to comfort, customers directly benefit from the technology in terms of its design, aesthetics, and mostly importantly speedy food service. As mentioned in the case study, the technology provides customers increased comfort, as it enables them to also acquire detailed information regarding suppliers, food, and concept at a touch of a button. When it comes to value, the technology offers quality food service to customers at the touch of a button, which adds value to customers looking for quality services. Hence, s’ Bagger restaurant is regarded in Germany as well as globally as ‘an automated restaurant.’ As indicated in the case study, the technology has significantly reduced waiting times. In addition to this, it has eliminated queuing for food. At the same time, the EPOS technology designated for billing has added value to customers as it allows s’ Bagger restaurant to run loyalty bonus schemes, allowing customers to benefit from bonuses. 3.0 SWOT analysis for the 's Baggers® Restaurant technology 3.1 Strength The technology gives s’ Bagger Restaurant a high brand recognition. Indeed, it is regarded by the press as the world’s only fully automated restaurant. The technology has reduced operation cost. Its use means that the restaurant can use few service staff since the customers can make their orders through the touchscreen EPOS situated at the tables. This promotes efficient services and reduced labour costs. The technology has also improved customer experience since it guarantees increased customer comfort, by presenting them increased access to information regarding the menu, as well as suppliers at the touch of the button. The technology was patented at the German Patent office in 2007, ensuring that it cannot be replicated illegally. Indeed, s’ Bagger has received application to license the technology in The technology has a good reputation in the market. Additionally, the technology is new in the area and offers service that no other restaurants offer. The technology also offers improved customer experience by offering them as well as offering bonuses through loyalty bonus scheme. It also presents the restaurant with effective advertising since customers are able to recommend it to friend by word of mouth although supported by technology. The technology also makes it easy for customers to appraise the entire concept of the restaurant and to issue invariable feedback, which enables the restaurants to relentlessly monitor and asses the quality of the food. 3.2 Weaknesses The technology requires high startup cost to acquire and install. The technology cannot be used by customers who are not technology savvy. The technology cannot operate independently from the services staff. In which case, it still needs waiters to be employed to offer instructions to customers who have not had an experience with the technology. The technology ensures limited expansion of the restaurant globally because of the differing government policies. Since the hotel is only situated in Nuremburg, customers have to travel distances to access the hotel. The technology has diversified the restaurant's service operation, which provides customers with diversified experience. This is since the technology complements the service staff. Indeed, while the waiters do not have to take food orders from the kitchen, the restaurant is still run by waiters to ensure the overall well-being of the customers, to welcome the customers into the restaurant, to clear away the dishes and to promote a friendly atmosphere. 3.3 Opportunity The technology has a high potential in developing nations. There is dynamic growth potential in developed nations such as the United Nations, due to attractive economic conditions, developed infrastructure and availability of high income customers. The increased technology awareness ensures that s’ Bagger Restaurant will increase it’s the restaurant’s appeal to customers looking to use technology. The technological revolution, including high adoption of new technologies and improved focus on global branding has increased committment to technology for better service delivery. This implies that the restaurant will continue to attract a large number of customers. 3.4 Threats The technology has had some side effects. For instance, while it ensures increased patronage, getting a table at the restaurant in the evening is difficult. The possibilities of entry of competitors with similar technology are imminent given that technology is dynamic. 4.0 Concept as a potential customer 4.1 Positive features The concept is based on service efficiency, customer comfort and reduced costs. From the customer’s perspective, the technology is attractive as it ensures improved and efficient services. The likelihood of the waiters taking the wrong order is greatly reduced. Chances of incidences of language barrier between the customer and the staff are greatly reduced as the customer is wholly in charge of controlling his order. At the same time, the likelihood that orders will be lost between the waiting staff and the kitchen is greatly reduced. The concept is focused on customer comfort, which appeals to customers. s' Bagger's technology provides increased comfort for customers who are able to acquire information on the food, the concept or suppliers. While the concept manages to ensure system efficiency, it also gives the customers an opportunity to have fun, particularly in exploring the digital menu. It also provides the customers with a chance to choose from the digital menu. The EPOS touchsreen provides a vibrant display or visual representation designed to exhibit the menu to their great advantage. The technology also make is easy for customers to make complaints regarding the food and service, since they only need to type the complaint at the EPOS touchscreen. 4.2 Negative features What makes the technology less appealing is the fact that it appears as intended to reduce labour costs. This may be interpreted as signalling that the restaurant is less motivated to spend more to increase customer experience. What is also not appealing is the fact that there could be difficult to change the customer orders, since the orders slide down the slide by gravity. The technology is too involving, and customers have to learn to use it and to be engaged with the technology optimally to avoid making the wrong orders. Because of such experiences, customers who are impatient cannot use the technology. The concept is also discriminative in a sense as it does not accommodate the needs of physically disables people such as t hose with eye impairments or the blind. The increases number of guests especially at night implies that there are possibilities of missing a table in the evenings. This can be both distressing and frustrating to the patrons. This also means that customers looking for some privacy may not prefer the restaurant. 5.0 Concept to the idea as a manager 5.1 Positive features The concept of the s Bagger Restaurant is anchored in service efficiency, customer comfort and reduced costs. It is attractive to the managers since it requires less waiting staff, which ensures that the hotel can reduce labour costs. As indicated in the case study, the restaurant only needs a limited number of service staff since the customers. In addition to reducing the high labour cost, the concept is relevant for a fast-food restaurant, which requires speedy service. Because of the huge cost-efficiency potential of the concept, it is estimated in the case study that the restaurant has the potential to save some €250,000 on operating expenses each year. The concept is also focused on customer retention. For instance, the technology allows the restaurant to run its loyalty bonus programs and to offer customers bonus. As a customer retention and promotional strategy, it enables the restaurant to retain customers through the bonus schemes (Hemmington 2007). On the other hand, through the bonuses, customers are able to recommend the restaurant to other uses through word of mouth. Additionally, the restaurant can benefit from constant feedback from the customers as the technologies can persistently monitor and assess the food. 5.2 Negative features The concept does not necessarily replace services staff. When customers have a problem with their orders or service, the restaurant still needs to hire and train service staff who can take employee complaints, promote a friendly atmosphere. 6.0 Three consumer trends 6.1 Rise of value-conscious customers The value-conscious customers will also continue to be the prevalent feature of the industry across all segments, including the middle-income customers, in the industry. According to Deloitte’s (2010) analysis the hospitality trends developing nations such as Australia, Germany, the United Kingdom, and the United States have mid-market consumers who demand more unswerving delivery of brand promise. 6.2 Growth of domestic tourism The emerging market such as China, Brazil, and India present a remarkable rise in the middle income class, who are expected to generate increased demand for business in the industry. According to Deloitte (2010), while a substantial part of the development was traditionally focused on the luxury and upscale market, the potential of such markets will rely on the growth of the mid-market targeted essentially at the domestic tourists. To s' Bagger Restaurant, what this means is that the restaurant will substantially depend on the middle-income consumers given the capability of its technology to appeal and engage with the customers and to set differentiate the hotel apart from its key competitors. Still, s' Bagger restaurant must still deliver its quality services consistently as well as at a transparent and consistent price. 6. 3Brand as driver of growth Third, the brand is expected to be the major driver of growth, since the hospitality industry is becoming increasingly saturated. Within the mid-market of the market, where differentiation is tricky for most restaurants to attain, s' Bagger Restaurant will easily set itself apart from its competitors. It is estimated that brands must centre on implementation of consistently simple although striking brand promise. In the case study, it is indicated the 's Bagger's technology is simple to use and offers consistent brand promise. This implies that the restaurant has a great potential to perform significant better in the future (Hotel Managers Group 2013). 7.0 Hospitality Systems concept analysis 7.1 Menu The electronic menu used by s’ Bagger is properly designed and serves as a critical in-door marketing tool. This means it has the potential to boost the customer check average. It also creates an image of the restaurant’s entire establishing, including the concept, quality food and service. Since it is digital in nature, it reflects the concept of the restaurant. It also has visual cues that make it readable. However, the overall effect of the menu should be to convey simplicity rather than style and sophistication. While the menu has a positive effect on customers during their first use, the patrons of the restaurants who use the menu daily are likely to fail to appreciate the long descriptions and large number of visual representations in preference for simple ones. Simplicity means speed (INC 2014). 7.2 Facility design The underlying objective of s’ Bagger’s layout is to promote smooth flow of work, information and materials through its system. The design effectively allows for the technology to serve its function of delivering effective food service to customers and movement of waiters within the restaurant. This ensures effective flow of information from the concerned customers to the staff, as well as the smooth flow of food to the customers (Davis and Heineke 2010). The facility design is therefore in line with the service-oriented businesses, which are concerned with how efficiently customers are served at the restaurant’s physical location. It however has limited space for expansion, which is distressing as once the tables are fully booked, customers may have to be locked out due to limited space. Therefore, the restaurant should have an increased space to make it more flexible disregarding the number of patrons (INC 2014). 7.3 Product flow The facility design ensures smooth flow of food from the kitchen to the customers through gravitational transportation on metallic tracks to the customer's tables. This limits the likelihood of losing the orders between the waiting staff and the kitchen, as it happens with the waiters. However, the product flow has a major restriction in that it cannot return used plates to the kitchen. The flow should therefore have enough space to make it easy for the waiters to collect and return used plates to the kitchen (INC 2014). 8.0 Conclusion The restaurant’s unique selling point is its technology, which has promoted efficient services and reduced labour costs and customer experience, since it guarantees increased customer comfort. The growth of value-conscious customers in the mid-market presents the company with opportunities for growth. The new trends imply that the most successful businesses in the industry will be those with the capacity to engage with the consumers efficiently and to set themselves significantly apart from the competitors. Regarding the hospitality Systems concept, the restaurant’s menu, facility design and Product flow are service-oriented to ensure effective customer service. However, the limited hotel space means the restaurant is not flexible enough to cater for expanding customer base. 9.0 References Chen, W 2011,"Technology Base Self Service in Hospitality Industry," UNLV Theses/Dissertations/Professional Papers/Capstones. Paper 1094 Davis and Heineke 2010, Service Innovation II: Designing the Service Delivery Process, viewed 19 Dec 2014, Deloitte 2010, Hospitality 2015: Game Changers of Spectators, Deloitte, London Hemmington, N 2007, "From Service to Experience; understanding and defining the hospitality business," The Service Industries Journal, vol 27 no 6, pp.1-19 Hotel Managers Group 2013, Top Trends For 2015: Will Your Hotel Be Ready To Welcome The Savvy Traveler?, viewed 18 Dec 2014, INC 2014, Facility Layout and Design, viewed 18 Dec 2014, Talabi, F, Chile, S & Abubakri, R 2012, "Making Slogans and Unique Selling Propositions (USP) Beneficial to Advertisers and the Consumers," New Media and Mass Communication vol 3 no 1, pp.30-35 Read More