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Peregrine Restaurant Opening Research Paper


Introduction

With the current fast-paced world, traditional recipes and foods are slowly being phased out of restaurants across the world (Willett & Stampfer, 2013, p. 77). More restaurants are focusing on making money via easy and quick means by serving fast foods and other modern delicacies that contemporary people demand. However, the modernity has also brought many issues concerning lifestyle diseases and problems.

These issues have led to the rising of the movement towards healthy living. Healthy living demands individuals to not only exercise well but also always consider the kind of food that they eat. In the search for prosperity and a means of coping with the demands of the changing world, people have lost track with reference to the traditional setup and eating habits (Mellentin & Heasman, 2015, p. 21).

It is crucial to restore this state of affairs. A good concept that focuses on achieving this goal is the El Peregrino. In this concept, life is viewed as a pilgrimage where people are in search of their origin. In other words, they aspire to return to a state of innocence or purity. Based on the concept of “El Peregrino” that that this marketing strategy and design will focus on the opening of a new restaurant.

Background to the Restaurant Business

In major Spanish cities, as well as across the whole country, it is difficult to find any restaurant that serves traditional Spanish delicacies and cuisine. From the above-discussed restoration formula, the new restaurant will focus on providing traditional Spanish foods that support the ‘return to the initial state of the traditional culture’ by providing the classic and typical Spanish delicacies and cuisine.

These delicacies are not easy to come by in the modern world, yet more and more people are increasingly becoming health conscious. They have a deep desire to move towards the path of self-discovery and restoration to the traditional state of living. Indeed, the city of Mallorca has the La Plaza de la Lonja de Palma where the restaurant will be set.

Here, it is even more difficult to find a restaurant that serves pure and unique traditional Spanish foods. Despite the location being famous for many Spanish restaurants that are full of tourists and locals who need the sumptuous Spanish delicacies, the hotels that serve traditional Spanish foods are very few, as it will be revealed by the market research that supports the idea of opening a restaurant (Murphy, 2013, p. 246).

The planned restaurant will have an average size of 120M2 and approximately 20 tables. Each table will have four seats and hence a maximum sitting capacity of 80 customers. The restaurant’s name will be Peregrine, which is inspired by the term El Peregrino that reflects the café’s focus on aiding customers in their journey to the traditional lifestyle through Spanish cuisine and experience.

Market Research

Market research is a central part of any business. In this case, opening the restaurant based on traditional Spanish cuisine will help to determine its viability (Fujita & Thisse, 2013, p. 12; Dobbs, 2014, p. 32). The market research will focus on the determination of the clientele base, the appropriateness of the location, and competition among other key tenets of competitiveness in the hotel industry in the La Plaza de la Lonja de Palma area.

Type of Clientele

In a successful business planning process, it is imperative to understand the need for determining the availability of demand of the intended services or products (Longenecker, Petty, Palich, & Hoy, 2013, p 14). A business seeks to bring a return on investment to the owner.

This goal can only be achieved if customers are available to buy the services and products that the business provides (Shafique, Ahmad, Abbas, & Hussain, 2015, p. 29). In this case, a determination of the availability of customers in La Plaza de la Lonja de Palma is of great importance to the Peregrine Restaurant.

Locals

To determine the availability of demand for the food products and services that the restaurant seeks to offer, a market research was undertaken to determine the availability of customers within the local population. In this market research, 50 questionnaires were distributed to random people in their homes, as well on the streets, to establish their views on the concept of the restaurant.

Out of the 50 questionnaires, only 38 were returned. This finding indicates a response rate of 76%. The questionnaires revealed vital opinions on the restaurant. Firstly, among the respondents, 64% pointed out that they were more aware of the importance of healthy living. This awareness fueled their desire for more traditional and healthy foods in their diet.

Although the remaining 36% acknowledged the significance of healthy living and eating, they did not have a strong desire to consume traditional foods. They tried such foods if they found them on the menu, rather than expressly ordering them.

Local’s opinions on healthy foods

Secondly, the research sought to know the reasons that hindered the respondents from seeking or consuming traditional foods. Among the 64% of the respondents who had indicated a strong desire for healthy foods, 71% indicated that the availability or accessibility of restaurants that provided such foods was the determinant of whether they would seek such foods.

Further, another 23% indicated that the price of the foodstuffs determined whether they would look for the traditional foods. The remaining class of 6% was not sure of the reason that hindered it from seeking the traditional foods.

Reason for not seeking out traditional foods

The above results reveal an overwhelming demand for traditional foods in the region of La Plaza de la Lonja de Palma from the local population. However, accessibility and pricing are a major determinant of whether the locals are ready to visit the hotel and order their favorite traditional Spanish cuisine.

Tourists

It is without any doubt that Spain attracts millions of tourists annually from across the world (Murphy, 2013, p. 14). The tourists wish to have a Spanish culture in its purest form. As the origin of the Spanish language and culture, millions of Spanish-speaking people across the world identify with Spain. They often visit the country in their search of their roots of origin.

For instance, Mallorca is indeed one of the oldest Spanish cities in the world. Thus, it has hundreds of attractions that reflect the Spanish culture and heritage. In the quest of finding their Spanish roots, as well as the exploration of the Spanish culture by other tourists, discovering the Spanish cuisine is top on their agenda (Murphy, 2013, p. 17).

Since the 1950s, Mallorca has received millions of tourists. Tourism is the main economic activity in the city. For instance, in 2014, the city received approximately 10 million tourists who were mainly attracted by the large number of beaches, warm weather, accessibility from many European country, and high-quality tourist amenities.

German tourists account for the largest share of the tourists who visit the city (Mellentin & Heasman, 2015, p. 26). This figure represents more than 30% of all visitors. Other high numbers of tourists are from the mainland Spain, Nordic Countries, and then the rest of the world as represented in the table below:

Origin of Tourists (Year 2014)
Country Numbers (Approximation)
Germany 3,731,000
The United Kingdom 2,165,800
Spain 1,089,000
Nordic Countries 758,900
Rest of the World 3,235,400

Source: (Mellentin & Heasman, 2015, p. 26)

From the above findings, it is apparent that indeed the restaurant will have a ready clientele from the large number of tourists who among other activities are also interested in sampling the Spanish cuisine.

Characteristics of the Location

Competition Research

For a company to be triumphant, it is imperative to understand the prevailing competition in the given area where it seeks to venture. In this process, the analysis of competition involves the use of various tools of business environment (Hollensen, 2015, p. 32). The most effective tool is the Porter’s Five-Force Analysis. The tool analyzes the competition in a given market area through five key areas, which are discussed below in relation to the Peregrine Restaurant:

Threat of Entry of New Competitors

Due to the high number of tourists in the region, hotels and restaurants form a major sector. Indeed, the number of restaurants is very high. It is approximated at 2400. As such, the threat of entry of new restaurants is high due to the availability of ready customers (Johnson, Price, & Van Vugt, 2013, p. 132).

However, the prohibitive cost of acquiring a location to establish a new business is a limiting factor, although it does not hinder many people from setting their restaurant businesses in this luxurious destination. Therefore, it is imperative for Peregrine to offer differentiated services, which will ensure that it remains relevant even in the face of new entrants into the market.

Competitive Rivalry

The city has more than 2400 restaurants. Most of them are concentrated around beaches. In this case, the Peregrine Restaurant faces serious competition from well-established restaurants and hotels in the area. In this case, Peregrine should consider differentiated marketing strategies and services to gain market share in the region.

Threat of Substitutes

The threat of substitutes is high since Peregrine seeks to set base on numerous types of foods that are offered in the region. In this case, if people do not find their preferred cuisine, they will stand a chance to pick other foods in the menu or get the foods in other restaurants.

Buyer Power

Customers do not have much authority over Peregrine because of the numerous and decentralized sources of the business’ customers.

Supplier Power

Since the business offers numerous foodstuffs, the restaurant will be supplied by several suppliers. Further, other suppliers are also available in the food industry and hence no one has a considerable power over the restaurant.

SWOT Analysis

The SWOT analysis is an essential tool in a business marketing strategy since it guides the determination of the strengths, flaws, chances, and threats of a business (Cazcarro, Hoekstra, & Chóliz, 2014, p. 93; Wrigley, 2014, p. 33). Such determination is very vital in guiding the various strategies that the business can adopt to guide its efforts that are aimed at gaining a competitive advantage in its industry (Kim & Mauborgne, 2015, p. 12). The following is the SWOT analysis table for Peregrine:

Strengths Weakness
  • Strategic location of the restaurant
  • High quality and unique traditional Spanish foods
  • High focus on healthy foods
  • Lack of experience in the hotel and restaurant industry
  • Limited resources as a start-up
Opportunities Threats
  • First mover advantage into the segment of offering purely traditional Spanish cuisine
  • Entry of established hotels into the segment of traditional foods
  • Fluctuation of tourist arrivals in the region

Marketing

The business will use various marketing strategies to attract customers. Firstly, it will use the internet through its official website to market its various foods that are on the menu. The company will also use Google Ads as a way of reaching a worldwide potential client base for people who are specifically interested in visiting the Mallorca region where Plaza de la Lonja de Palma is located. Other approaches will include partnerships with major tourist agents in the region.

Conclusion

The establishment of the restaurant Peregrine based on the concept of El Peregrino will provide traditional food enthusiasts with the opportunity of sampling a large variety of traditional foodstuffs as they tour the beautiful Plaza de la Lonja de Palma.

Although the business will be established in a region that has many other restaurants, its focus on traditional Spanish cuisine presents a central area of business that many hotels in the sector have not considered. Further, from the analysis of the market and competition, it is evident that the opportunity for success is very high.

Reference List

Cazcarro, I., Hoekstra, A., & Chóliz, J. (2014). The Water Footprint of Tourism in Spain. Tourism Management, 40(1), 90-101.

Dobbs, M. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.

Fujita, M., & Thisse, J. (2013). Economics of Agglomeration: Cities, Industrial Location, and Globalization. Cambridge, UK: Cambridge University Press.

Hollensen, S. (2015). Marketing Management: A Relationship Approach. New York City, NY: Pearson Education.

Johnson, D., Price, M., & Van Vugt, M. (2013). Darwin’s invisible hand: Market competition, evolution and the firm. Journal of Economic Behavior & Organization, 90(1), 128-140.

Kim, W., & Mauborgne, R. (2015). Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant. Boston, MA: Harvard Business Review Press.

Longenecker, J., Petty, J., Palich, L., & Hoy, F. (2013). Small Business Management. London: Cengage Learning.

Mellentin, J., & Heasman, M. (2015). The Functional Foods Revolution” Healthy People: Healthy Profits. London, UK: Routledge.

Murphy, P. (2013). Tourism: A Community Approach (RLE Tourism). London, UK: Routledge.

Shafique, M., Ahmad, N., Abbas, H., & Hussain, A. (2015). The Impact Of Customer Relationship Management Capabilities On Organizational Performance; Moderating Role Of Competition Intensity. Arabian Journal of Business and Management Review, 3(3), 28-47.

Willett, W., & Stampfer, M. (2013). Current Evidence on Healthy Eating. Annual review of public health, 34(1), 77-95.

Wrigley, N. (2014). Store Choice, Store Location and Market Analysis (Routledge Revivals). London, UK: Routledge.

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