Restaurant Strategy Analysis

Mar 21, 2016 | 0 comments

Mar 21, 2016 | Miscellaneous | 0 comments

Restaurant Strategy Analysis

 

TABLE OF CONTENTS

RESTAURANT STRATEGY ANALYSIS 2

a) Effect of all you can eat buffet 2

b) i) Labor Costs 3

ii) Buffet Versus A’ La Carte 3

iii) Overall Cost Of Food 4

Bulk purchases 4

Preparation 5

iv) Amount Of Food To Be Prepared 5

v) Strategy 5

References 7

Restaurant Strategy Analysis

a) Effect of all you can eat buffet

Many entrepreneurs often imagine that an all you can eat buffet is quite costly. However, this strategy will prove to be quite cost effective to the restaurant. An all you can eat buffet allows for cost cutting on various other aspects. For example, the restaurant can easily diminish the cost of labor and training. Often presentation of food by waiters requires that more waiters are employed to serve particular areas. On the other hand, a buffet means that the customers are serving themselves and there is therefore no need for trained waiters.

The cost of purchase of food will alsodecrease significantly. Two things happen concurrently on this factor when an all you can eat buffet is introduced. First, the buffet attracts two types of customers. The first is the customer who cannot afford the food in the a’ la carte menu. The next is just the customer who wishes to eat more and save. The cost of the food must therefore be calculated to carefully include the saving and also manage the cost of the food. The cost of food is such that the customers cannot consume as much food as they originally imagined they would. The food is purchased by the restaurant in plenty which reduces the cost significantly. It is also easier for the manager to calculate immediate profit as food is prepared in bulk.

With an all you can eat buffet, it is easy for the restaurant to attract new customers in plenty. With this strategy especially, the restaurant will attract families and groups who wish to enjoy a meal together. This in turn translates to immediate profit.

ii) Statistics on food costs for a la carte menu

The below table shows an example of the expected changes in food expenditure from the popular meals in the restaurant. The analysis shows a conclusion with expected significant decreases in meal purchasing costs.

Purchasing price in traditional menu Purchasing price in a la carte menu difference %
Appetizers Sottish salmon

Chilled Jumbo

Duck liver pate

Escargots

$14.50

$15.00

$14.00

$13.50

$12.50

$11.00

$14.50

$13.50

2

4

-0.50

0

13.8

26.67

-3.44

0

Salads

 

Gazebo salad

Caesar salad

Anjou Pear

$9.50

$9.25

$9.75

$8.00

$9.00

$9.50

$1.50

$0.25

$0.25

15.78

2.70

2.56

Main courses Roasted rack of lamb

Fresh dover sole

Chicken breast

Rossini

Roasted duck

$35

$41

$28

$40

$36

$32

$38

$27

$38

$36

3

3

1

2

0

8.57

7.31

3.57

5

0

b) i) Labor Costs

a purely a’ la carte menu has proven to be quite difficult to maintain in terms of labor costs. To begin with, the kitchen staff itself has included more than three chefs to manage various aspects of the menu. In addition, there has been increased training to improve the various dishes. With the menu requiring specific attention, there has also been need to employ servers and helpers in the kitchen. Unfortunately, this has severely crippled the ability of the manager to increase profits. The introduction of the all you can eat buffet, means that there is less preparation required. The chefs can easily be reduced and kitchen assistants could also be reduced. The menu can be decided beforehand, allowing for easier preparation of the food well before time. There is also no need for servers in the kitchen. The kitchen budget is likely to go down by more than 30%.

The next labor cost to take effect will be the waiters menu. According to (Gupta 2009) an a’ la carte menu often requires elaborate preparation, presentation and presentation. Waiters are required to be many to allow for efficient service to the customers. Often the restaurant has to engage in training of the waiters to allow for efficiency as well as quality in service. This kind of service often attracts the high end client, although they come in few numbers stifling the profit. On the other hand, the buffer does not require any special training, customers serve themselves what they desire to eat and as such require less waiters. The restaurant itself can be managed with even 25% of the current number of waiters.

ii) Buffet Versus A’ La Carte

Majority of the restaurants often start off with a’ la carte menu. This menu is designed to determine the tastes of the clientele. Clients order what they desire and how they would like it direct from the menu. A unique a’ la carte menu is likely to cater to various unique needs of the clientele. In essence, this is a requirement for every restaurant. However, maintaining an a’ la carte menu has proven to be quite difficult especially costly for the restaurant. As (Scanlon 1993) points out constant changes and creativity is required to maintain a unique menu. This means constant change in terms of staff training to maintain the excellence in service provision. The plates must be right, the cutlery must match each dish and therefore the knowledge required for the same must be excellent.

On the other hand, a buffet menu which often does not take precedence in a restaurant is easier to manage. The food is prepared in bulk and as long as quality is maintained, customers will continue to flow in. a buffet menu is ideal for customers and clients who dine and eat as a group. This could include families and even co-workers. However, this does not mean that the restaurant can ignore the need for uniqueness. The buffet menu also needs to be unique in order to attract the right client and decrease the left over. With a buffet, the restaurant enjoys the inflow of clients but with also a decrease in cost and strain of management. Restaurants often introduce the buffet menu as a short term offer, however, once the benefits are seen; the buffet joins the main menu.

iii) Overall Cost Of Food

Bulk purchases: a buffet menu allows the restaurant to take advantage of the bulk purchases. Fresh food purchased in bulk allows for lower costs of the same food when it is purchased in smaller quantities. Suppliers can be persuaded to decrease their costs of purchase which in turn increases profits. A common error however for many restaurants, is that they purchase too much food in bulk. While the cost may decrease significantly, the restaurant also experiences losses through spoilt products. In addition without fresh food, clients are most likely to elect other restaurants from which to eat.

Preparation: normally an a’ la carte menu requires a lot of preparation. Chefs have to endure hours of preparation and service also takes time. The problem is that this reparation often plays a part in determining the cost of food. With a buffet menu, the cost far much less because preparation of the food is done easily. The menu is determined beforehand, for example salads are chosen and prepared together for all customers. This is unlike when a customer orders and the chefs then begin preparation at that time.

iv) Amount Of Food To Be Prepared

Perhaps the most difficult part of preparing a buffet menu is determining the amount of food that is to be prepared for the buffet. Restaurants often make the mistake of preparing too much food is an attempt to draw more customers. However, just because it’s an all you can eat buffet does not mean that all patrons will fill their plates to the brim. To avoid left over and carry over, itis best to begin with small amounts of popular meals. With time, the food can be increased to cater for increasing demand of extra food.

In addition while still considering the importance of variety in the menu, too much variety can be harmful. Patrons for example do not need five types of rice, instead it might be wise to select the top two and keep varying the dish. This keeps the menu exciting from day to day while at the same time ensuring that there is little if any carry over to the following day.

v) Strategy

Restaurants are often faced with the problem of managing costs in order to increase profits. Even with minimal loss, a restaurant can easily be crashed and brought down. In this case, there was need to draw more customers and consumers. Average consumers however, who are mostly the biggest spenders when it comes to eating out are more focused on cost. To attract this average spenders, it would have been wise to focus more on snacks and light meals which are cheaper, easier to prepare and often draw a larger number of clientele.

Further, it could be wise to begin a delivery system, where customers can order from the menu and enjoy the same meals in the comfort of their homes. Often patrons would not like to drag around children and even themselves from the comfort of their homes. (Gordon and Brezinski 1999) shows that an efficient delivery system is likely to draw more clients and patrons. As opposed to a buffet menu, delivery promises the luxury of excellent food without the hustle of preparation or even the strain of leaving the comfort of our home. Further delivery can be used as an avenue to venture into small business catering. With a restaurant, diversity in the mode of delivery and service provision is the key to success.

References

Gordon, R. T., & Brezinski, M. H. (1999). The complete restaurant management guide. Armonk, N.Y: Sharpe Professional.

Gupta, V. K. (2009). Restaurant management. Chandni Chowk, Delhi: Global Media.

Scanlon, N. L. (1993). Restaurant management. New York: Van Nostrand Reinhold.

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