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The Pages Book Café: Management Strategies Report

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Updated: Jun 19th, 2020

Abstract

The Pages Book Café is presently experiencing challenges in terms of recruitment, technology, operations, marketing, and finance. The current paper addresses this issue by proposing ways to attain competitive advantage. The company should maximise on technology and hire qualified employees. It is proposed that the recruitment of a highly skilled labour force, coupled with an accurate financial forecast, can lead to growth in the company. A number of success factors are highlighted. However, these factors are secondary to the element of human resource mentioned. The suggestions provided in this paper will help in the realisation of the company’s strategic plan.

Brief Description

The Pages Book Café is a literature themed restaurant. According to Rothaermel (2012), themed establishments are recent establishments in the business world. The main area of operation for Pages Book Café is the sale of books. However, the need to maximise on space and profits has necessitated the adoption of food and drinks business by the organisation. The books sold cover different topics in literature. The customers are provided with comfort and the best in local and continental cuisine.

The customers who frequent the Pages Book Café are interested on catching up on their reading. According to Hill and Jones (2012), a business should adopt technology when presented with such an eager clientele. To this end, the establishment has invested in wireless internet and several electrical power points. The development is in response to the emerging e-book market. Since its inception, the Pages Book Café has continued to host reading clubs, cocktail parties, and a number of corporate events.

Organisational Structure

The success of Pages Book Café is attributed to the lean and efficient management team. Dess, Lumpkin, Eisner, and McNamara (2011) argue that growth of a company is realised when the management structure is operational. Figure 1 is an illustration of the Pages’ organisational structure:

Pages Book Cafe’s organisational structure.
Figure 1: Pages Book Cafe’s organisational structure.

From figure 1, it is evident that the company has four main departments. According to Dess et al. (2011), a lean management ensures that the company adopts a more focused approach to business operations. The Pages Book Café is headed by a Managing Director who is in charge of the four main departments. The Operations Director is in charge of the literature and food synchronisation division. The Sales and Marketing Director heads the food and books sales department. The Financial Director is charged with the responsibility of ensuring that all the monetary requirements of the company are in order. Finally, the Floor Director is in charge of the provision of actual services in the cafeteria.

Vision Statement

Pages Book Café intends to provide its customers with the best cuisine and literature experience in a fast, reliable, and efficient manner. The aim is to ensure that the reading culture is sustained by maintaining high standards of dining.

Mission Statement

Pages Book Cafe’s mission is to provide a wide array of literature with the intention of satisfying all forms of literary needs. It also meets the clients’ food and beverage preferences. The establishment intends to provide a serene environment for book lovers. The goal of Pages Book Cafe is to nurture the modern reading community by providing the latest technology in literature. The hospitality provided at the establishment meets the highest standards of the industry. At Pages Book Cafe, clients are assured of diversity in all the services provided.

Company’s Objectives

Financial Objectives

Financial matters are the core of most business venture. O’Brien, Pathiban, Yoshikawa, and Delios (2014) posit that the financial objectives of a company must enhance the efficiency of business operations. At Pages Book Cafe, the primary goal as far as finances are concerned is revenue. Through the sale of books and food, the company intends to generate $200,000 annually. The second objective revolves around matters pertaining to cost. The sales and marketing department is expected to address the operational costs associated with advertising the cafeteria. Another goal involves profits. The management intends to alter prices of the products in response to market dynamics.

Human Resource Objectives

Companies meet their objectives with the help of their human resource (HR). According to Hitt, Duane, and Hoskisson (2012), the HR department oversees the overall implementation of the organisation’s vision and mission statements. At Pages Book Cafe, the primary objective of this department involves training and development of human resource. The department has designed various programs to meet this goal. The company’s recruitment objective involves screening of employees with regards to skills and creativity.

The other HR mission at Pages Book Cafe touches on employees’ relations. Hitt et al. (2012) argue that an organisation should adhere to labour laws to enhance relationships at work. To this end, Pages intends to advance an open door policy to create a peaceful coexistence among the employees. Employees’ relations extend to areas where the company plans to guarantee fair remuneration across the board.

Operations Objectives

The operations of an organisation are expected to be in sync with its mission and vision. According to Kodama and Shibata (2014), these objectives must be made clear. At Pages Book Cafe, the main operational goal is the provision of high quality and informative books, as well as food products. The reading culture envisioned by the company is sustained through these operations.

SWOT Analysis

Strengths

Companies achieve their objectives by maximising on their strengths. At Pages Book Cafe, the primary strength is the company’s information technology (IT) infrastructure. Hill and Jones (2012) suggest that IT improves the performance of a company. Pages Cafe has a state of the art IT system that responds to the growing demand for e-books. Secondly, the cafeteria offers services at very competitive prices, a situation that contributes to its success.

Weaknesses

Pages Cafe, like any other company, has a number of weaknesses that reduce its overall competitiveness. Mahoney and Qiang (2013) suggest that when a company identifies its weaknesses, it can rectify them and improve its performance. The first weakness is the shortage of creative and skilled employees. In addition, the cafeteria was previously using slow wireless internet connections, which rendered its technology redundant. Another weakness is the absence of a strategic financial plan.

Opportunities

The IT field provides this company with a number of opportunities. According to Costa, Cool, and Ingemar (2013), technology has a huge impact on trade. Pages Book Café has invested heavily in IT. Currently, the company has slow wireless internet connectivity. However, owing to the existing infrastructure, the organisation needs only to alternate its internet service provider to improve performance. Another opportunity is the expanding market of e-books and increase in the number of groups that require ‘reading technology’.

Threats

The organisation is facing stiff competition from similar enterprises in the area. In a study by DeSarbo and Grewal (2007), competition in the hospitality industry is very dynamic owing to the large number of new entrants. Currently, Pages is facing competition from book clubs that rotate their meetings in members’ homes. In addition, the slow economic growth has reduced the spending power of consumers. In both cases, Pages stands to lose a considerable customer base. As already mentioned, the slow internet may affect business growth by reducing the number of customers. The reason is that the e-market is largely dependent on technology.

5 Forces Model Analysis

Threat of New Entrants and Potential Competitors: Average Pressure

In the hospitality industry, there are relatively low entry barriers. In addition, ‘consumer switching’ is high in this sector (Hitt et al., 2012). However, the number of new entrants in the book cafe business is very low. The situation is largely attributed to the challenges associated with this market. To this end, Pages Book Café is seen as a brand in the region. In addition, the company holds a sizeable market share. The loyal customer base is unlikely to shift allegiances.

Threat of Substitute Products: High Pressure

The members of various book clubs prefer to hold their meetings at the comfort of their homes. According to Kodama and Shibata (2014), the hospitality industry is very dynamic. As a result, a venue like Pages Book Café can easily be substituted by someone’s home. Given that literature forms the core of the business, clients who cannot afford the space offered by Pages may opt to read from home. When meetings are held at a private residence, the costs incurred in the provision of beverages or light meals are reduced.

Bargaining Power of Buyers: Low Pressure

The major products offered by Pages Book Café include books and light meals. Costa et al. (2013) argue that organisations offering simple products, especially in the hospitality industry, rely on customer loyalty. Loyal consumers do not bargain hard. In light of this, it is apparent that the clients who frequent Pages have extremely low bargaining powers.

Bargaining Power of the Suppliers: Low Pressure

As already mentioned, the main products at the cafeteria are books, food, and drinks. Raw materials are only found in the food department. Under such circumstances, a business outlet is not tied to expensive suppliers (Mahoney & Qiang, 2013). The availability of e-book databases also makes it possible to provide clients with different types of texts. Consequently, the suppliers’ bargaining power remains low since these stakeholders are not concentrated or differentiated.

Rivalry among Existing Firms: High

The company is ranked third in the book cafe business. It is one of the new entrants in this industry. According to Hill and Jones (2012), existing business outlets have a significant hold on the market share. The scenario is evident in the locality where Pages Book Cafe is situated. The market leaders have a competitive edge over Pages due to the high number of existing loyal customers.

Sustainable Competitive Advantage

Competition is a common phenomenon in the contemporary business arena. Given this reality, companies are required to constantly develop unique products that will endear them to their customer base. According to O’Brien et al. (2014), technology is a winning factor in most modern markets. In light of this, it will be advantageous for Pages Book Café to invest more in advanced technology. In addition, the company should consider expanding its portfolio by introducing product packages in which book sales are tied to the meals sold at the establishment. Such a move is sustainable given that the business is guaranteed of increased revenues.

Strategic Approach

The strategic approach aimed at achieving growth in the company is tied to technological advancement, marketing, and human resource. Pearce and Robinson (2010) suggest that organisations that are relatively new in the market should invest heavily in marketing. A marketing campaign is seen as a way of increasing brand visibility. When the brand is exposed to potential consumers, sales are increased.

The technology required for such business enterprises involves the introduction of IT elements. To this end, a competitive and fast internet service provider will ensure that the company can exploit its potential in e-marketing. Dess et al. (2011) are of the opinion that such a move can be used to increase the number of customers. Finally, Pages Book Café intends to hire highly trained employees with a passion in literature. Such employees are expected to improve the company’s performance in the hospitality sector. The organisation will also introduce a competitive remuneration package and other benefits, such as healthcare. The aim is to motivate the workforce. When employees are provided with an environment that is conducive for their performance, positive results are obtained.

Key Success Factors

Profitability and growth are indicators of a successful business. The two are realised when a company meets a number of requirements. According to Kodama and Shibata (2014), the success of a given organisation is determined by the nature of its human resource. As a result of this, Pages Book Café is investing in periodic training programs for the employees. The training focuses on sales and marketing of the two main products offered by the establishment. A proper financial forecast is required to guarantee returns on investment. The following are additional success factors applicable to the business:

  1. High speed internet.
  2. Bouquet prices.
  3. Discounts on large groups.
  4. Access to a large database of books on different subjects.
  5. Aggressive marketing in colleges and social places.
  6. Financial forecasting.
  7. Balancing between the provision of soft and hardcopy books.
  8. An appealing menu.
  9. Improved ambiance.

Conclusion

Pages Book Cafe has a bright future. The management needs to put in place a number of measures to achieve success. Some of the measures include training employees and investing in technology.

References

Costa, A., Cool, K., & Ingemar, D. (2013). The competitive implications of the deployment of unique resources. Strategic Management Journal, 34(4), 445-463. Web.

DeSarbo, S., & Grewal, R. (2007). Hybrid strategic groups. Strategic Management Journal, 29(3), 293-317. Web.

Dess, G., Lumpkin, G., Eisner, A., & McNamara, G. (2011). Strategic management: Text and cases. New York: McGraw Hill. Web.

Hill, W., & Jones, R. (2012). Strategic management: An integrated approach. Michigan: Cengage Learning. Web.

Hitt, M., Duane, I., & Hoskisson, E. (2012). Strategic management: Concepts and cases- Competitiveness and globalisation. Michigan: Cengage Learning. Web.

Kodama, M., & Shibata, T. (2014). Strategy transformation through strategic innovation capability: A case study of Fanuc. R & D Management, 44(1), 75-103. Web.

Mahoney, T., & Qiang, L. (2013). Market frictions as building blocks of an organisational economics approach to strategic management. Strategic Management Journal, 34(9), 1019-1041. Web.

O’Brien, P., Parthiban, D., Yoshikawa, T., & Delios, A. (2014). How capital structure influences diversification performance: A transaction cost perspective. Strategic Management Journal, 35(7), 1013-1031. Web.

Pearce, R., & Robinson, R. (2010). Strategic management. New York: McGraw Hill. Web.

Rothaermel, F. (2012). Strategic management: Concepts. New York: McGraw Hill. Web.

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