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Ledbury Restaurants: Case Study on Business Decision Making

Questions:

Scenario

A restaurant chain plans to open its second restaurant in London. To ensure this is a viable move, the shareholders are keen to understand the market. Therefore you are asked to carry out a planned data collection and data analysis to help the board of directors in understanding the customer pricing preferences.(e.g. income &price, age &price)

Task 1

Report on Data Collection and Analysis, In this report;

• Create a plan for primary and secondary data collection with presenting the survey methodology & sampling frame used
• Design a questionnaire to collect data and provide a justification for its design
• Collect data and summarise the collected data using representative values
• Analyse the collected data using measures of dispersion. You must be able to use the analysis of the pricing preferences to inform and support decision making.
• Carry out suitable calculations to draw useful and realistic conclusions and provide valid recommendations. Your calculations must include quartile, percentiles and the correlation coefficient. Explain how these calculations helped you to draw useful conclusions.

Task 2

Prepare a Business Presentation and a formal Business Report to disseminate information effectively which include;

• The findings which should be used to draw valid conclusions .You must use spreadsheet software for all calculations and incorporate graphs and charts(line,pie,bar chart,histogram,scatter ) to clearly and effectively present the findings.
• Trend lines in graphs to assist in forecasting for specified business information. For example, this may include people’s eating behaviours overtime and preferences against seasonal changes.
• A business presentation to disseminate information effectively
• Prepare a formal Business Report to be presented to the board of directors
• Use appropriate information processing tools to analyse the information
• Plan for the project, identifying relevant CRITICAL PATH, PERT, GANNT Chart, to implement a business process and the recommendations you are suggesting from your findings. For example, a business process to serve customers (It is essential to use appropriate project management
software)
• Different financial tools such as discounted cash flow, net present value and IRR functions to evaluate the financial viability of the proposed recommendations

 

 

Answers:

Introduction

In the contemporary business scenario decision making is very much depend o upon the primary and the secondary form of research. As the ledbury is one of the leading restaurants who are willing on the expansion of its restaurants chain for that the study is been conducted.  The study will focus on the plan for the collecting data for the opening of new chain of restaurants for the ledbury (Cleland and King, 2008).  Apart from that, the study will also focuses on the various form of data collection in order specify the feasibility of the project. With the help of various graph and charts, the decision making of the opening of restaurants chain in London will be very much possible across the UK.

Task 1

Plan for collecting primary and secondary data

Primary data collection: For primary data collection several customers from the various restaurants and the visitors at Trafalgar square are being consider, the primary for of data will be collect via on field survey questionnaire within the London. Primary data collection is very much needed for the first hand collection of data in order to understand the need of the consumers (DeCarlo, 2010).

Secondary data: Secondary forms of data are collected via internet research, blogs, social media, company annual report and the other various sources. Apart from that, secondary sources of data is very much helpful in c gathering the information’s about the research which is to collect the formation about the existing restaurants and their market share within the business (Gido and Clements, 2012). Secondary data also companies of various forms of journals, newspaper and magazines.

Survey Methodology

Sampling the sampling here would be used as customers and the manager of the famous restaurants in London.  With the help of 55 customer based the 5 manager would satisfied the primary research. The survey m


ethodology would be sued here is quantitative and qualitative form of survey (Ferraro, 2007). For qualitative, secondary form, data would be used from the existing companies and for the quantitative data is collected on filed questionnaire.

Design a questionnaire to collect the data

a. How often do you visit the restaurant?

Options

No of respondents

Total respondents

Response %

Last 1 week

12

55

22%

Last 1 month

16

55

29%

Last 1 year

8

55

15%

More than 2 years

10

55

18%

More than 5 years

9

55

16%

 

 Graph 1: visiting the restaurants

From the above, it has been found that, with more than 23% participants visits every week restaurants for the eating’s. However, around 29% of respondents go restaurants with every month.

The above scenario explains that every month every people visit the restaurant for eating. London is known for the variety of delicacies and the people are known or the quality eating and living (Barker and Chitty, 2009).  With the rise in the restaurants business very shows that consumer are willing to taste the different for the delicacies and visit informal way or for occasions, which in both condition satisfies the thought of eating out.

b. What are the factors that influences you towards the restaurants?

Options

No of respondents

Total respondents

Response %

Service Quality

18

55

33%

Brand Value

10

55

18%

Ambience

13

55

24%

Price

9

55

16%

Others

5

55

9%

 

Graph 2: factors that influence the consumer towards the restaurants

Around 18%  of respondents are very much quality preference rather than price. Secondly feels connection with ambience must be neat and clean rather than food quality with 24%.

From the above , it has been found that most of the customer are being considered quality of food as their first preference among the other because the people living in London are very much known for their expensive life style and  their love of quality delicacies are been known worldwide (Barlow, 2009). As the restaurants manager, it is an opportunity to offer a quality cuisine rather  at value pricings. For pricing, company will be using penetration pricings.

c. What type of dining do you prefer?

Options

No of respondents

Total respondents

Response %

Chinese

14

55

26%

French

9

55

16%

Italian  

11

55

20%

Traditional (British)

17

55

31%

American

4

55

7%

Graph 3: Type of dining do you prefer

Around 26% of the people of London are found of Chinese  rather than other delicacies. Apart from that, the second best food, which has liked my most of people, was French in London.

This shows that, rising in Chinese delicacies is been one of the major trend which has been followed by the world (Bates, 2009).  The Chinese food was voted most preferable food globally by the Forbes magazines.

d. What time you prefer to visit a restaurants?

Options

No of respondents

Total respondents

Response %

Break fast

11

55

20%

Lunch

19

55

34%

Dinner

25

55

46%

 

Graph 4: Time for visiting the restaurants

From the above, around 34% of the respondents are being loved to dined out rather than having lunch or dinner. Secondly, company uses lunch as their escape route to visits the restaurants.

 As dining habit is very much has been known for several years. Dine out is one of the major speciality which has been followed by the generation in English (Carpenter and Fairhurst, 2009). As compare to other meals, most of the English love to have dined out because of the hectic schedules and the busy life of the Cockneys.

e. How do you prefer your cuisine most?

Options

No of respondents

Total respondents

Response %

Simple

14

55

25%

Crafted

16

55

29%

flavoured

8

55

15%

Seasoned

10

55

18%

Boiled

7

55

13%

Graph 5: preference of your cuisine

From the above, around 29% of respondents feels should, be crafter meal incorporate to other major food presenting process. Apart from that, other major restaurants goers wants their food in the simple way rather than flavoured.

Summarise the data using the values

For quantitative form of questionnaire, young adults with the age of 15-45 and income earning of chosen respondents from the £5000 per month has been chosen for the project at the places like Trafalgar square and various other restaurants like Bread kitchen, Heston Blumenthal and Barbeoa (Entrepreneur, 2015). Apart from that, there are two major available has been considered while collecting the data 1st Age and 2nd is Income before asserting the data. The collected data will be taken via non-probability sampling. The online sampling will be non-probability sampling. Customer participation will be based on likert scale.

Analyse the results

Measure of dispersions

Age

Population

Under 18

9

18-25

21

25-35

45

35-45

19

Over 45

6

Graph 6: Total chosen population sample

Mean

Income = 15, 20, 21, 20, 36, 15, 25, 15

Sum of these 8 values is 167, so the mean is 167/8= 20.875

The above results shows that, the chosen age group has is 15k to 36 k. The chosen age group is being looking for the quality and cheap dinning in term of pricings. The price of the products must be lower in order to gain the differences.  

Measure of dispersion

Standard deviations

Differences

SD

SD2

15-20.875

-5.875

34.51

20-20.875

-0.875

0.76

21-20.875

-0.125

0.01

20-20.875

-0.875

0.76

36-20.875

15.125

228.75

15-20.875

-5.875

34.51

25-20.875

4.125

17.01

15-20.875

-5.875

34.51


By taking, the SD squares value. Sum is 35.87. The results are 350.875/7=501.25. This value is known as the variance.  In order to take the Standard deviations, square root of the variance is considered. This would be (52.1235)2= 7.07. This shows that, measure of dispersion is 7.07 for the age group while selecting respondents.  

Analyses of percentile, quartile and the correlations coefficient

Income Y

Price £,X

Price*Income

SD

 

15000

128

1920000

1920000

 

20000

135

2700000

2700000

 

21000

148

3108000

3108000

 

25000

168

4200000

4200000

 

36000

179

6444000

6444000

 

40000

205

8200000

8200000

 

42000

332

13944000

13944000

 

44000

523

23012000

23012000

 

48000

928

44544000

44544000

 

50000

1028

51400000

51400000

 
 

mean

15947200

18116979.57

 
    

quartile

  

1st Quratile

22000

 
 

Median

percentile

38000

43000

 

3rd  Quarter

percentile

43500

 
 

maxvalue

percentile

50000

 


From the above, it has been found that, quartile value of the company is very much suggested that, quartile value is right side.  The demand divides the data into two equal data set  on income  and the price offered by the various restaurants to the participants.  The lower quartile is the value of the middle of the first set, where the 255 of values are very much smaller than the Q1, which is 75% larger.  The quartile range of the company is shows that, restaurants and income group people are being taking high quality food with the increasing range of the price (Statista, 2015). Apart from that, it also has been found that, increasing income tend s the buyer to go for the higher price food. The taste and preference of the food is changing as per the income and age.

 One of the major recommendations is been identified during the research is that most of the customers are looking for quality as per their income. So the company should look to keep right quality and valued pricing instead of the using price skimming’s. Besides that, extensive advertisement and the proposed quality food with right kind of quality and with right kind of approach lead the company to success in longer run (Ferraro, 2007). However, company should also look to use cost leadership strategy to gain the high market share.

Task 2

Secondary research

Restaurants in UK

Global   sales

UK  sales

Arby’s Kitchen

89.13 million

35429

Bonanza  Steak  house

16.301 million

13667

Yo  Suhshi

9.3 million

6557

Loch Fyne

3.882 million

3522

Strdada

3.16 million

2251

Wagamama

3 million

2000

Zizzi

2.8 million

1925

 

Graph 7: Market share of UK Restaurants

(Source: Adcock, 2010, pp-132)

From the above , graph it has been found that , UK is biggest chain of the restaurants in world starting from the local cuisine to international cuisine. There has been ample evidence which shows that, market share of existing restaurant in UK (Gido and Clements, 2012). One of Arby’s kitchen has highest market share of the its goodwill and the quality of food which it serves. As the compare to that, most of restaurants are been very much using the rotten or un-fresh vegetable and fruits which is why quality is lacking.

For Global sales


Graph 8:  Global sales of UK restaurants chain

(Source: (Carpenter and Fairhurst, 2010, pp-257)

The global sales of Arby are highest because of the name and high brand in London. However, at recently junk food companies like McDonalds and Subway has been very popular and highest market share in worldwide including the UK.

 Growth of the restaurants chain

Types of Restaurants

Percent growth in UK (2013)

Multi cuisine

38.9%

Limited cuisine

20.1%

 Fixed cuisine

17.33%

Seasonal  cuisine

19.25%

Quick cuisine

21.09%

 

 Graph 9: Growth of the restaurants chain

(Source: Coviello and Winklhofer, 2008, pp-85)

As per the above graph , it has been found that , cockney are very fond of multi cuisnie restaurants who serves world delicacies . Majority of the people are looking to switch to the multi cuisine restaurants with 38% in compare to the fixed or rather tropical based restaurants (Danaher and Johnston, 2009). The survey was conducted by the heath London chamber of commerce in order to help the new age entrepreneur.

Forecasting the eating habits of the  UK customer base

Eating habit of   consumers in UK

2005

2009

2013

Growth

Salad

28.09%

39.08

48.09%

 

Fresh Sandwiches

28.18%

34%

37.02%

 

Boiled dinner

14%

19.08%

24%

 

Fired Snacks

40.18%

29.09%

19.09%

 

Sweets

44.09%

35%

38.11%

 

Oily food

38.02%

18%

11.09%

 

Graph 10: Forecasting the eating habits of the UK consumers

(Source: Heylen et al. 2007, pp-54)

In London, most of locales are being very much heath sensitive rather than price sensitive.  Most of the people are found of the eating salad which has been increasing from the year 2009 (Bates, 2009). However, decrease in oily food and junk food id decreased from 40% in 2005 to 195 in 2013. This shows that demand of the food  oily food is decreasing.

Refer to PPT

Prepare business Plan

In order to open a restaurants business venture various forms of data feasibility study should be considered which also include the market feasibility and financial feasibility. With the help of primary research it has been found that, most of the customer in London is very much acquitted with the quality rather than price. Apart from that, another major factors would be pricing and ambience of the restaurants which is very much considered before moving to the restaurants (Entrepreneur, 2015).

On the other hand, secondary research helps the organisations to cater  large customer base. From the above research , it has been found that, most of restaurant are using fresh and quality form of food which is served within the London and global with rise in Abey restaurants because of its quality and the rest known for using low pricing strategies to gain the market base. However, rise in salads in UK market and the rise in boiled food rather than junk food is one of the major reason of concern for the ledbury restaurants (Hellman, 2005).

Using appropriate tool for the restaurants business

Activity

Description

Activity duration (days)

Depends on

A

Preparing the business plan

10

-

B

Primary and secondary  research plan

25

A

C

Hiring personnel

3

B

D

Work orders

60

C

E

Supply of equipments

Assemble measure ingredients

20

C

F

Sources of funds

10

C

G

Renting a  building

15

C

H

Installations of equipments

5

E,F&G

I

Furntur  fittings

10

D&H

J

Monitoring

2

I


Project plan

Activity

Depends on

Normal time

Crash time

Normal cost £

Crash cost £

A

-

10

8

4900

6000

B

A

25

24

3000

6000

C

B

3

2

2000

3300

D

C

60

58

1600

3000

E

C

20

19

5000

6000

F

C

10

9

1800

4000

G

C

15

13

6000

8000

H

E,F&G

5

4

8000

9000

I

D&H

10

9

3000

4000

J

I

2

1

1000

2000

 
 
Figure 1: CPM of new restaurants business

(Source: created by author)


Table 1: Gantt chart

(Source: Created by author)

Financial tools

NPV for new Restaurants business project

Year

Cash flow

Present value

0

-500000

-500,000

1

200,000

181,818.18

2

300,000

247,933.88

3

200,000

150,262.96


NPV=80,015,02

Payback period of the restaurants chain business

Payback period for 3 years

Year

Cash flow

0

-500000

1

200,000

2

300,000

3

200,000


Payback period =3+ (50, 0000/200,000)

=5.5 years

NPV is one of the major financial tool which shows that highest  is the NPV higher chance of the choosing the project. In this case NPV is 80, 015,02. NPV considers time value of money which is  most effective. Another major method is payback period which shows that lower would be year rate larger will be chance of according the project (DeCarlo, 2010). Since the investor will be restaurants within the 5 years, the project of restaurant business must be chosen.

Conclusion

From the above , study in has been found that , in order to open restaurants chain then the company need prepare primary research and secondary form research for decision making the market conditions.  The primary research has helped the companies to gather  the primary form of data which shows people of London are eager to prefer quality than price. Apart from that ambience and payment options are other major attractions for the customers. From the secondary research it has been found that, rising competition between the existing firms within the London and UK will be one of the major problems. People of London are very much narrowed towards the salads rather than fried food habits.

 

Reference list

Books

Cleland, D. I. and King, W. R. (2008) Project management handbook, 4th ed. New York: Van No strand Reinhold.

DeCarlo, D. (2010) EXtreme Project Management: Using Leadership, Principles, 4th ed. London: Kogan Page Limited

Ferraro, J. (2007) The Strategic Project Leader: Mastering Service-Based Project Leadership, New York: Taylor & Francis

Gido, J. and Clements, J. P. (2012) Successful Project Management, 5th ed. London: McGraw-Hill Education.

Adcock, D. (2010) Marketing: Principles and practice. 4th ed. London, Thousand Oaks CA: Sage Publication.

Barker, N., and Chitty, W., (2009). Integrated Marketing Communications Asia Pacific Edition.  6th ed. New York, London: Routledge.

Barlow, J. (2009) Excel models for business and operations management. 6th ed. New Jersey: John Wiley & Sons Inc.

Journals

Bates, T. (2009) ‘Analysis of Survival Rates among Franchise and Independent Small Business Startups’, Journal of Small Business Management 33(2): 26–36.

Carpenter, J. M. and Fairhurst, A. (2009) Consumer shopping value, satisfaction and loyalty for retail apparel brands. Journal of Fashion Marketing and Management, 9 (3), 256-269.

Connell, S. (2008) Travel broadens the mind — The case for international research. International Journal of Market Research, 44 (1), 97–106.

Corstjens, M. and Lal, R. (2008) Building store loyalty through store brands. Journal of Marketing Research, 37 281-291.

Coviello, N. E. and Winklhofer, H. (2008) “Contemporary Marketing Practices Research Program: A Review of the First Decade,” Journal of Business & Industrial Marketing, 23 (2), 84-94

Danaher, P. J. and Johnston, W. J. (2009) “How Firms Relate to Their Markets: An Empirical Examination of Contemporary Marketing Practices,” Journal of Marketing, 66 (3), 33-46.

Hellman, K. (2005) "Strategy-driven B2B promotions", Journal of Business & Industrial Marketing, 20(1), pp.4 - 11

Heylen, J. P., Dawson, B. and Sampson, P. (2007) An Implicit Model of Consumer Behaviour. Journal of the Marketing Research Society, 37(1), 51-67.

Websites

Entrepreneur, (2015). Entrepreneur - Start, run and grow your business.. [online] Available at: https://www.entrepreneur.com/ [Accessed 21 Jan. 2015].

Statista, (2015). Healthy eating habits when dining out U.S. 2014 | Statistic. [online] Available at: https://www.statista.com/statistics/327004/healthy-eating-habits-of-consumers-in-restaurants-us/ [Accessed 21 Jan. 2015].


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