Karam’s Objective
Karam’s Objective was to gain competitive advantage and retain loyal customer base that had made him a success in the first place.
The Pizzeria’s three greatest Strengths
- At the initial stage, Karam Pizza & Samosa experienced continuous growth due to the unusual menu choices with good quality foods;
- Karam maintained its governance with high degree of compliance and general norms of corporate practice, for instance, Karam had taken major decisions considering the opinion of other shareholders;
- Karam had financial capability to pay dividends to the shareholders after second and third year.
The Pizzeria’s three greatest Weaknesses
- About half of the total customers were from the area just north and north east of the store;
- customers preferred to purchase from larger urban centre because they were outside Karam’s free delivery area;
- Lack of employees and ovens, it was very difficult for Karam to serve the customer on time. Therefore, most of the customers were turning away and some customers were getting food after long waits;
Opportunities to solve the problems or expand
- It has opportunity to hire more cooks during the peak period;
- Integration of new technology could retain loyal customer base;
- It has scope to open new outlets in suitable location to sustain in competitive markets;
- It has opportunity to consider joint-venture strategy to expand business
Threats to its business or even its survival
- The presence of strong competitors like Pizza Hut and Pizza Pizza were real threat for this restaurant since the customers would be able to purchase Indian foods from competitors;
- Karam failed to satisfy and retain loyal customers;
- The location of the business was in a suburban area away from official and industrial sites, which was the prime factor getting little lunch traffic.
First Alternative
The First Alternative to meet the objective of Pizzeria to gaining competitive edges was to renovation of kitchen of the restaurant by adding more ovens and increase human resource for the operation of increased cooking facilities.
Two primary positive outcomes of this alternative are that it would facilitate the ‘Pizzeria’ to serve the customers quickly and the customers may not back with delayed service. This imitative would generate a base of satisfied customers and increase sales for dinner.
The negative outcomes of this alternative is that it would bring extra burden of working capital for additional human resource while it would be used for additional two and half hours and the rest period would be unutilised.
Second Alternative
The second alternative is to develop marketing, sales, management, and business automation through B2B model. The most effective outcomes of this alternative are that it would boost the business with enhanced revenue and generate strong base of satisfied customers.
The primary limitation of this imitative is to remove “disliking” of Karam for business automation and improve his skills for credit sales or engage a new manager with required skills.
Third Alternative
The third alternative is to reopen another store in a suitable place. This solution would provide additional facilities to boost sales and turn the Pizzeria into a ‘Chain Shop’, but the fundamental problem is that the investors of Pizzeria are satisfied with their present return and they have no additional resources for further investment. If Karam himself goes for the investment of the new location, he would get none to risk sharing.