Background
Hot Oven Restaurant has experienced a reduction in sales because of different reasons which have affected its operations negatively. The firm is looking for a way to improve its performance in the market to increase its revenues. Hot Oven restaurant is a fast food chain located in Manhattan, and serves mainly blue collar workers who work nearby.
Hot Oven Restaurant has been in business for the last two years and in this period, it has never registered positive results in its operations. It has been making losses which have had a negative effect on its growth prospects. Hot Oven’s menu is basic and only caters for blue collar workers who consume their meals quickly before going back to work. Hot Oven Restaurant has eight employees who perform different functions such as waiting tables, cleaning dishes and cooking restaurant meals.
Many clients have complained about different issues regarding the quality of services offered by the restaurant which has affected its reputation in the market. Customers have complained that the firm’s menu is very basic and needs to be expanded to cater for a wide variety of consumer preferences. They have also complained that the firm’s employees are not polite and this discourages them from making return visits to the restaurant.
They have asked the management on several occasions to make quality improvements to satisfy their expectations, but their requests have not been addressed. The restaurant recently registered a loss in its end of year results which is not encouraging for its long term prospects. Its owner has realized that the time has come to initiate a shift in business strategy to enable the restaurant grow its revenues in the market. This research project seeks to identify ways through which the firm can carry out internal improvements in its operations.
Situation Analysis
Hot Oven Restaurant has been in operation for the last two years. The restaurant mainly serves Blue Collar workers who work in Manhattan. The firm has not made any profits in the last two financial years and this has impacted negatively on its operations. The restaurant offers fast food meals to its clients who do not have the luxury of eating in a relaxed environment.
The restaurant faces serious challenges as it seeks to restructure its operations to help it improve its performance in the market. Hot Oven’s market strategy is not effective and this has slowed down its growth. The restaurant needs to introduce new services which add value to its status in the market to help it grow its revenues.
Core Problem/ Opportunity
The firm operates in open environment where the market is not highly differentiated. Its competitors are small eateries which target a similar customer base. This provides the firm with a good opportunity to add value to services it offers in the restaurant to improve their levels of satisfaction. Hot Oven needs to carry out a market study to determine needs and expectations of its clients.
The firm needs to gather more information from its clients to understand their perceptions and opinions regarding its services in the market. This approach will help the firm to improve its performance because it will understand which key areas of its operations need to be improved. This will help the restaurant to increase the amount of sales revenues it receives. Hot Oven needs to improve the quality of all its operations to become more competitive in the market.
This will have a positive impact on its reputation in the market because it will help the firm establish strong relationships with its clients. Hot Oven should assess opportunities and challenges it is likely to experience in the market it operates in. This will help the firm’s management to understand if these new strategies are viable for its long term operations or not.
Goal
The restaurant wants to become one of the best in Manhattan by offering personalized and high quality services to its clients. It intends to improve its reputation in the market by offering an expanded menu and additional services to help it grow its revenues.
Objectives
To increase the number of items on the menu to enable the firm cater to a wide variety of clients.
To increase the firm’s sales and revenues in the next three to six months.
To introduce additional services to help increase the firm’s sources of revenue.
To open up new branches in other sections of Manhattan in the next two years to increase Hot Oven’s market share in the area.
To establish long term relationships with its clients through constant communication between employees and clients.
The restaurant intends to review its long term strategies to make them more responsive to customer needs and expectations.
To introduce delivery services to customers at an additional fee to enable them access meals and drinks while at home, work or school.
The firm seeks to improve and expand internal sitting arrangements to make customers more comfortable while dining in the restaurant.
Hot Oven intends to improve its supply chain functions to enable it source fresh produce in time without any delays.
Hot Oven seeks to improve its payment systems to enable customers pay for their services through credit and debit cards.
Hypothesis
Hot Oven needs to increase the number of services it offers its clients to help it grow its revenues in the market.
Expansion of Hot Oven’s Target Market
Hot Oven’s target market consists of blue collar workers who work in various sections of Manhattan. The restaurant sells fast foods because its clients prefer packed meals and beverages which they can consume quickly before they go back to work. The restaurant’s internal atmosphere and sitting arrangement does not favor a relaxed dining experience and this discourages some potential clients who do not want to eat their meals in a rush.
The firm’s strategy of selling to lower segments of the market does not serve it well and it needs to change this strategy to improve its long term growth prospects. The firm needs to target other clients to increase its sales in the market. This approach will help the firm to become more competitive in the market (Nargundkar 76).
Hot Oven needs to target clients who like hosting large parties to establish long term relationships with them. It needs to introduce outside catering services to these clients to help it grow its sales revenues and earnings. Hot Oven Restaurant needs to create synergies with event planning firms to enable it provide meals and catering services in different events such as: weddings, graduation parties, birthday celebrations, company launches and reunion parties.
Outside catering services will help the firm to improve its profile in the market which will help it grow the size of its operations in the long term. This approach will help Hot Oven Restaurant to increase its revenue sources which will make the firm more competitive in the market (Nargundkar 87).
Hot Oven needs to begin serving alcoholic drinks and other cocktails in the evenings to enable it attract new clients. The restaurant needs to divide and improve its internal sitting arrangements to attract new clients who seek a relaxing experience. It is necessary for Hot Oven to engage young segments of the market consisting of young men and women who prefer to hang out with their friends and school mates in relaxing environments. The firm needs to target college students and young working class clients aged 21 to 35.
This segment consists of people who are more outgoing and engage in different types of entertainment activities. Hot Oven needs introduce cocktails and other drinks on its menu which can be served to these clients in the evening. The firm needs to encourage young people to try out its cocktails to help it grow its revenues. The restaurant needs to change its décor to have a more relaxed atmosphere in its premises to make clients who visit enjoy spending their time there (Bradley 56).
The firm should consider hiring out its premises to other parties to conduct functions and ceremonies there. The restaurant is located in an open area and has adequate parking space which gives it an advantage.
Hot Oven Restaurant can market itself as an ideal venue for parties, meetings and other ceremonies which clients may be interested in. However, for this to be successful, the restaurant needs to redesign its décor and sitting arrangements. It should also install public address systems and security cameras to boost the confidence of its clients (Bradley 62).
Business Strategies
Strategy 1
The firm needs to source funds for its expansion by obtaining loans from financial firms. Hot Oven’s management need to restructure the firm’s business plan to show the changes they intend to make in its operations. Hot Oven needs to have a more solid capital base to enable it effect crucial improvements in its internal operations and processes .
The firm’s management needs to develop a strong financial strategy which will guide the manner in which new sources of capital obtained by the firm will be used. The firm’s management will also have to look at priority areas in the firm and the amount of money to be used to improve these areas.
Strategy 2
The firm needs to improve the quality of its services to make its clients more satisfied. Hot Oven employees need to be trained on effective customer care skills, which will help them serve clients better. The firm needs to introduce internal quality systems to ensure all products and services which are sold to customers have complied with high quality standards.
The management also needs to introduce routine inspections to ensure all internal processes comply with all health standards. It is important for managers to encourage customers to give their feedback regarding services offered to assess the quality of their operations.
Strategy 3
Hot Oven needs to market its improved service portfolio to help it gain positive publicity which will enable it attract new clients. The firm should conduct various promotional campaigns to prepare the market for the shift in market strategy it intends to implement. This will attract more attention to the firm’s services thereby strengthening its position in the market.
Hot Oven needs to design brochures and other fliers which outline changes in its menu and how this benefits customers. The restaurant should use other platforms such as radio, print media and social networking websites to advertise its services so as to attract more clients.
Strategy 4
The firm needs to conduct a market survey to understand perceptions and opinions of customers regarding new changes proposed. This market survey will help the firm to determine which areas of its operations need to be improved to enable it stay competitive in the market. The feedback obtained from clients can be used to make effective changes in internal policies of the firm. Hot Oven Restaurant needs to establish strong relationships with its clients to improve its reputation in the market. A market survey will help the firm understand the behavior of its clients and how it can satisfy their needs better.
Strategy 5
The restaurant needs to improve its internal policies to increase efficiency and productivity. It needs to comply with all licensing, health and environmental regulations to ensure that its services conform to established legal expectations. Financial processes in the organization need to be streamlined to strengthen accountability and integrity.
The firm needs to move away from cash transactions and payments to strengthen internal payment procedures. Hot Oven Restaurant needs to strengthen its human resource policies to ensure the welfare of its workers is catered for properly. The restaurant’s employees need to be taken through more training to improve their skills at work. This will make them more suitable to perform different functions in the firm.
Evaluation Criteria and Tools
The firm need to implement several evaluation techniques to assess the quality of its operations. The firm can use the SWOT analysis tool to evaluate the effectiveness of its business strategies. The SWOT analysis will help the firm’s management to understand the strengths, weaknesses, opportunities and threats Hot Oven Restaurant is likely to face in its market environment.
This tool will help the firm’s management to formulate long term strategies which will guide how its internal and external operations will be conducted. This analysis will help the firm’s management to determine the viability of different ideas generated and how they affect its operations in the market. The management will be in a position to set priorities and come up with effective measures to achieve them (Kolb 69).
Results from consumer surveys will be crucial in helping the firm to evaluate if it meets and satisfies the needs of its customers. These surveys will be used to evaluate customer care issues in the firm and how they can be improved to make customers more loyal. These surveys will guide the firm’s marketing teams to develop new products and services.
The marketing team will be in a position to determine the viability of different ideas from consumers before they are developed further. Consumer surveys will make it possible for the firm to evaluate its performance in the market (Kolb 71).
The firm’s management needs to monitor media content highlighting the firm and its services to analyse perceptions that exist in the market regarding its services (Kolb 76). The firm needs to evaluate content on radio stations, blogs, social networking sites and magazines to understand customers’ opinions regarding the quality of its services. The media has a lot of influence on consumer behavior and this requires the firm to assess the publicity it gets in the media to implement proper practices in its operations.
The firm needs to do inspections four times in a year to determine if its operations conform to proper health, safety and environmental standards. Employees need to be assessed to determine their suitability to discharge various functions assigned to them. It is necessary for the firm to conduct audits twice every year to establish if its finances are being handled properly.
Financial audits will help the firm to determine if it is making profits or losses. Inspections and audits will help to strengthen the firm’s internal operations. The firm will be in a position to review all its operations to find out if they are competitive or not (Kolb 79).
Works Cited
Bradley, Nigel. Marketing Research: Tools and Techniques. Oxford: Oxford University Press, 2007. Print.
Kolb, Bonita. Marketing Research: A Practical Approach. London: Sage Publications, 2008. Print.
Nargundkar, Rajendra. Marketing Research: Text and Cases. New Delhi: Tata McGraw Hill, 2008. Print.