Dinner in the Sky. Export in Pakistan from the UK - Essay Example

? Dinner in the Sky Export in Pakistan from the UK CHANGE_ME [Pick the Dinner in the Sky Executive Summary Dinner in the Sky is a restaurant with its head office in Guildford UK. It presents a unique idea and experience of taking its diners literally to the sky. The restaurant itself if suspended by cables which are operated by cranes on the ground. Dinner in the Sky currently operates in about more than 15 countries (Dinnerinthesky.com, 2010). This report presents an opportunity to launch the service in Pakistan which appears to be a lucrative market. Pakistan is a growing economy as it will be shown through facts and figures mentioned in the report. The 12 C Framework on international business is also analyzed briefly for brevity purposes. In this, all the possible aspects of launching an international venture are discussed such as: external factors like cultural, political and economic factors which may negatively or favorably affect the business, along with the marketing communication adopted to promote the venture and competitive analysis over Dinner in the Sky’s advantage of its idea over its competition. Besides this, Porter’s five forces model of competition is also perused to gauge the level of threat which Dinner in the Sky can face from competition in the industry. In the end, the report contains a product-life cycle analysis and how Dinner in the Sky can use this theory to expand its life in the market. The report then concludes by stating how Dinner in the Sky can be successful by having a competitive edge over it s competitors Table of Contents 1 Executive Summary 2 2 Introduction 4 3 Methodology: 4 3.1 Market Segmentation: 4 3.2 The 12 C’s Framework: 5 3.2.1 Country 5 3.2.2 Concentration & Consumption 6 3.2.3 Culture and Consumer Behavior 7 3.2.4 Choice & Capacity to play 7 3.2.5 Channel 8 3.2.6 Communication 8 3.2.7 Contractual Obligations & Commitment 9 3.3 Porter's Five Forces 9 3.4 Product Life-Cycle 11 4 Recommendations 12 5 Conclusion 12 6 Bibliography 13 2 Introduction The eatery industry of Pakistan consists approximately of about more than a hundred organized restaurants, which are spread throughout Karachi, Pakistan’s business hub. The industry is categorized in restaurants according to the type of cuisine which they carry. Restaurants in Karachi are predominantly filled with customers and with waiting lines on weekends. Currently, the market is untapped as this will be totally a new attraction for the people of Karachi. As Dinner in the Sky is a Belgium based franchise, some property will have to be purchased/leased in Pakistan to gain the first mover advantage. The franchisee in Pakistan will be the owner of Dinner in the Sky in the UK and will purchase the property in Pakistan as a corporate entity or as an individual under business interest according to International Law (Mehdi, 2001). 3 Methodology: The methods of research used for this report was secondary data obtained from the Government of Pakistan’s regulatory bodies, in the form of reports, industry insights etc. The data is authenticated by the Government of Pakistan itself. Besides this, specifics of the restaurant industry were also studied and analyzed throughout the course of this report to gauge the prospects of launching Dinner in the Sky in Pakistan. 3.1 Market Segmentation: Dinner in the Sky will be aimed towards Social Economic Class A+, A, B+ and B. This consists of about 10% of the population of the city Karachi who belong to the SEC A and B (Saqib, 2007). The brand will be positioned as a premium brand and as a value leader in the restaurant industry. 3.2 The 12 C’s Framework: 3.2.1 Country Pakistan has a growing middle class which leaves it a lucrative market for lifestyle products/brands. The country registers a GDP of approximately $180 billion with per capita income of $2,000 (State Bank of Pakistan, 2011). On the negative side however, the economy is faced with a high inflation rate. This is damaging as it slows down economic growth. The country currently stands at 2%. This is 2% less as opposed to last year (Economywatch.Com; Theodora.Com, 2011). However, the demand for eateries is high and with Pakistan as a growing economy, is quoted to have a positive influence on foreign direct investment. Besides this, most of the country leaves endless possibilities for new and innovative ideas (Sathar et al 2009; Vaughn, 2010). The graph illustrates a clear rising trend of the past and future economic performance of Pakistan. 3.2.2 Concentration & Consumption Elite towns of the city, namely Muhammad Ali Society, Clifton and Tariq Road are major commercial areas of Karachi. Their residential areas house mainly people belonging to SEC A and B (Hashmi, 1965). Besides this, there are many multinational food chains spread throughout Karachi. Some famous names include: McDonalds, Pizza Hut, Butler’s Chocolate, Hardees, KFC, Mr. Burger etc. Besides all the food brands, the city also has head offices of many multinational corporations and also house international brands of clothing, apparel, electronics etc (Rubina et al, 2004). Studies and research shows that approximately, 25 to 30 new ventures enter the restaurant industry of Pakistan in Karachi. Having somewhat the same uniform menu with low diversity, they compete merely on their prices and variances in taste (Industry Reports, 2009; Hotel, Restaurant & Tourism Directory of Pakistan, 2009). 3.2.3 Culture and Consumer Behavior Dinner in the Sky plans to put Asian-Swedish food on its menu with a feel of Arabian cuisine as per the target market of Pakistan (Pakistan’s Tourism Division, 2006). As Dinner in the Sky has a different set of menu for each country, it will adopt the same strategy of Internationalization with its presence in Pakistan, as per the community's expectations. The customers prefer a good environment suitable for families and visit places which offer good food along with pleasant and comfortable environment for their families (Industry Reports, 2009). 3.2.4 Choice & Capacity to play The direct competitors of Dinner in the Sky are: Village Salt and Pepper, Lal Qila (The Red Fortress), Revolving Restaurant, Shan-e-Mughlia (The Demeanor of the Mughals) and Evolution. These restaurants cater to the same market and are premium priced eateries (Karachisnob.com, 2011). They carry a theme and the consumers visit them to enjoy banquet meals along with their friends and kin. Revolving Restaurant can be called Dinner in the Sky's direct competition as the establishment is set at a high rise building and the restaurant revolves smoothly at the roof-top which gives the customers 360 degree view of the city Karachi (Hasan, 2002). The other medium class restaurants however compete through competitive prices and will not be direct threat or competition of Dinner in the Sky (Hasan, 2002). The company’s competitive edge as opposed to the rest of the players in the market is the ultimate experience which Dinner in the Sky will prove to its customers. The management and head waiters take care of every minute detail for its customers to make their evenings exclusive and remarkable, so as to ensure repeated visits rather than just a one-time experience (Pakistan’s Tourism Division, 2006).. 3.2.5 Channel The suppliers in this industry have less negotiating power as the raw material of food can easily be obtained from almost anywhere. But, the equipment which Dinner in the Sky will use to propel the restaurant up is highly technical. It will need to keep constant checks on the equipment for customer safety (Mehdi, 2001). 3.2.6 Communication Dinner in the Sky will adopt word-of-mouth marketing to generate a customer base besides launching a 360 degree marketing campaign on Social Media. There will also be focus on BTL and promotional activities such as discount coupons through lucky draw or competition. 3.2.7 Contractual Obligations & Commitment As Dinner in the Sky is a Belgium based franchise, some property will have to be purchased/leased in Pakistan to gain the first mover advantage. The franchisee in Pakistan will be the owner of Dinner in the Sky in the UK and will purchase the property in Pakistan as a corporate entity or as an individual under business interest according to International Law (Mehdi, 2001). Besides this, Dinner in the Sky has to meet al the standards of food quality, kitchen hygiene and safety standards of restaurant equipment (Industry Reports, 2009). 3.3 Porter's Five Forces Porter's Five Forces model looks at the competitiveness of the restaurant industry in Pakistan. Entry into the industry is easy as the data suggests, 30 entrants are recorded every year. However as mentioned above, the suppliers in this industry have less negotiating power as the raw material of food can easily be obtained from almost anywhere. But, the equipment which Dinner in the Sky will use to propel the restaurant up is highly technical. It will need to keep constant checks on the equipment for customer safety. Dinner in the Sky faces no threat from substitutes as there is no one in the market which offers what Dinner in the Sky is offering. This lowers Rivalry from Competition force of the Porter's Five Force model. This is because Dinner in the Sky's competitive edge would be the experience which it will be providing. To create something similar, the competitors will need high level of training and technological knowhow. However, when it comes to food, the customers are highly disloyal. Unless the food excites their taste buds, the customers would move on to the next restaurant. But on the other hand, the idea of having food in the sky goes beyond food! Therefore, the customers will have low power of negotiation. 3.4 Product Life-Cycle The project Dinner in the Sky will have a long product life-cycle. This is because after serving the market of SEC A and B, the brand can start catering the lower segment of Karachi. With approximately 18 million people, the market proves to be a lucrative one for the restaurant industry. Dinner in the Sky is already operative in more than 20 States. It has already skimmed the major chunk of the global market. Pakistan, amongst other developing countries, forms a good potential market for luxury brands (Pakistan’s Tourism Division, 2006) 4 Recommendations The restaurant is advised to operate seven days a week, serving from 6 pm to 2 am, during the operating time of Port Grand, Karachi: the place where it will be located. Dinner in the Sky will be set. On an initial stage, the restaurant will be open only for booking and reservation to ensure a stable stream of revenue. The company will be recommended not to compete on prices but instead, it must become the value leader in its industry. 5 Conclusion The creation of a unique and innovative fine dining experience will differentiate the company from the competition. The restaurant will stand out from the other restaurants in the area because of the unique design, decor and ambiance. The company will offer a fine dining experience in a cozy atmosphere. Product quality is not only great food but great service and atmosphere. The menu will appeal to a wide and varied clientele. It is International with an interesting twist. Controlling costs at all times without exception (Pakistan’s Tourism Division, 2006). 6 Bibliography HOTEL, RESTAURANT & TOURISM DIRECTORY OF PAKISTAN (2009). Islamabad: Economic Research & Statistics Section, Tourism Division, Govt. of Pakistan, 2009. Print. KARACHISNOB.COM (2010). “Restaurants”. Web 11 November 2011 Available at INDUSTRY REPORTS (2009). “Restaurant Industry in Pakistan”. Industry Reports. 2009. Print MILLS, J., CLAY, J. M., PARSA, H. G., & ISMAIL, J. (2003). Restaurants in the Sky. Journal of Foodservice Business Research. 6, 45-65 DINNERINTHESKY.COM (2010). Dinner in the Sky. [Online] Available at: http://dinnerinthesky.com/dits_dinner/dinner.php [Accessed 11th November 2010] STATE BANK OF PAKISTAN, (2011). The State of Pakistan’s Economy. First Quarterly Report 2010 – 2011. 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(2004). Socio Economic Differences in Frequency of Food Consumption and Dietary Trends in Urban Areas of Karachi, Pakistan. Asian Network for Scientific Information Available at: http://docsdrive.com/pdfs/ansinet/pjbs/2004/822-826.pdf [Accessed 10th November 2011] SAQIB, O. F. (2007). Papers and Proceedings 2nd SBP International Conference on "fixed income market development in emerging market economies": Karachi, December 18-19, 2006 SATHAR, Z. A., ZAIDI, B., & KHAN, M. A. (2009).Pakistan's demographic transition in the development context. Islamabad, Pakistan, Population Council. PLAYTV.COM.PK. (2011). Asia’s Biggest Food Street In Karachi. [Online] 11th November 2011. Available at: http://www.playtv.com.pk/news/life-a-style/102-asias-biggest-food-street-in-karachi.html VAUGHN, B. (2010). Security and the environment in Pakistan. [Washington, DC], Congressional Research Service, Library of Congress. http://www.cq.com/displayfile.do?docid=3720577 MEHDI, R. (2001). Gender and property law in Pakistan: resources and discourses. Copenhagen, DJOF Pub. WORLD BANK, WORLD DEVELOPMENT INDICATORS (2011). Pakistan’s GDP Per Capita. Google public data explorer. [Online] 15th November 2011] Read More