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Food and Beverage Management Functions

Discuss about the Hotel and Hospitality Management for Restaurant.

The aim of the paper is to present a report on food and beverage operations in a restaurant. Through an in depth analysis, the aim is to give a comprehensive insight into the multifaceted nature of opening a restaurant. For this purpose, the restaurant that would be chosen in Australia is Guzmen Y Gomez. A restaurant needs proper management to work efficiently. The paper would lay emphasis on the importance of product differentiation, cost management, and staff management strategies adopted by restaurants and food chains in this industry. Moreover, the aim is to get a detailed understanding of the emerging and current trends and technologies that help to shape the industry. A number of tools and theories would be employed in the paper to carry out a detailed analysis such as PESTLE Analysis, Porter’s Five Forces and VRIO theory. Also, the tangible and intangible nature of the food and beverage industry shall be identified. The food and beverage industry in Australia includes categories like grains, meat, dairy, seafood, horticulture, confectioneries, and beverages. The industry provides a diverse range of products to the food and retail services. There is a lot of flexibility in the food and beverage sector in Australia and is a great contributor of the Australian economy. Australia has the reputation of providing clean and healthy food products to its citizens.

The food and beverage operations comprise the internal functions of an organization. Management functions involve organizing, planning, recruiting and training the staff. Managers in the food and beverage sector need to manage the day to day operations that undertake in a hotel or restaurant. It is the job of the manager to provide excellent internal and external customer service. The food and beverage operations environment has basically two functions- management and operations. Both these functions are necessary and strive to achieve operational objectives. The management function involves organizing, planning, controlling, and leading an organization. On the other hand, operational function deals with the input, transformation, and output. In short, it follows the system approach model.

Food and beverage costing structure depends on different pricing strategies of the foods as well s the cost of maintaining the hotel operations. The restaurant specializes in Tex-Mex dishes such as nachos, burritos, quesadillas and taco. The costing of hotel operations depends on the profitability of the hotel. Costing is an important management function of a restaurant that falls under food and beverage management operations. Maintenance of cost on adopting different types of strategies by the strategic department of the company is included in the cost management functions (Grekova et al., 2014). Lowering the cost of different functions of hotels will result into higher profitability.

PESTLE Analysis

Strategies of food and beverage management operations can include various types of strategies that include the management of the operations. Different departments of a company have to run smoothly if the company has to work in a focused way. The management department of the company has to undertake different long term and short-term strategies that are focused on the current scenario of the market and the company. The HR functions as well as the strategic management department have to formulate the strategies that are related to the organizational goals (Wu et al., 2013). However, organizational goals are related to the market conditions of the country.

Marketing strategies of the sector including the company must adopt different traditional methods of marketing as well as the digital media marketing. The restaurant chain also focus on excellent customer service as Word of Mouth (WOM) promotion will come from the mouth of the satisfied guests of the restaurant. It goes with other companies of food and beverage companies. If the consumers are satisfied with the products served by the companies then they will say it to their relatives and peers (Dora et al., 2013). Appropriate selection of both traditional legacy media and digital media is essential for formulating effective marketing strategy.

Many skills and resources are required in managing food and beverage operations. Food service managers maintain the operation of the restaurant. However, food service managers must have in depth knowledge about different types of incidents inside the restaurant. Decisions are to be made based on the different aspects of hotel management operations. The knowledge of administration, management, personal and customer service, training and education, processing and production, food production, sales and marketing, telecommunications, psychology and leadership are required for managing the operations of food and beverage sector (Grekova et al., 2016).

Apart from that, many skills are necessary for the maintenance of the different operations of food and beverage. Skills and resources of the company imply the human capital resources of the employees present in it. Human capital is a popular concept that is focused on different concepts of the operations of the company. The restaurant must put emphasize on the skills and attributes of the company that are considered as the most valuable assets of the company (Hurrell & Scholarios, 2014). The different levels of management have different responsibilities regarding managing various aspects of the company. Key skills and resources include mostly the intangible resources of the company i.e. the skills and assets of the employees who are responsible for managing the business operations. The company’s physical assets are also responsible for the management of different operational procedures. More is the income of the company stronger will be the operations of the food and beverage companies. However, the company is putting stress on the different human capital skills of the company. The skills of the employees include service orientation, critical thinking, time management, social perceptiveness, active listening, reading comprehension, operations analysis, learning strategies, system analysis, management of financial and material resources, systems evaluation, operation monitoring, quality control analysis, persuasion and instructing (Graham & Potter, 2015). The above-mentioned skills are essential for managing different levels of operations of the company in the food and beverage sector in a perfect manner. Managers possessing these skills and knowledge must be having good leadership and decision-making power that will result in formulating strategies in different sectors of operations for the restaurant chain effectively.

Key Skills and Resources in Food and Beverage Operations

Political- The season of national elections can affect the food and restaurant industry negatively. This is more prominent when it comes to selling liquor. Childhood obesity, menu labeling, diseases related to diet, allergen concerns, and food regulations and safety are some of the issues that affect the food and beverage industry largely. There may also be taxing issues (Ab Talib et al., 2014).

Economical- The Australian food and beverage sector is a great contributor to the economy of Australia. This sector provides employment to the citizens of the country. However, the output generated from this sector saw a decline in the year 2012. Moreover, the input cost of the industry is rising. The income and GDP of Australia is quite high.

Social- The opportunities in the food and beverage sector in Australia is rising. There is a growth in the demand of food both nationally as well as globally. An increase in the demand of high quality products and rise of the middle classes has been a positive impact on the industry. The high level of income of Australian people prompts them to buy healthier food than cheap street food (Gregoric, 2014).

Technological- Growth in technology in the modern times has changed the mode of working in the food and beverage industry. People nowadays, especially the young generation rely heavily on internet and online shopping. They prefer to order food online rather than going to a restaurant due to crunch of time. Thus, more development in the delivery system would help this industry to develop as well.

Legal- The Food Safety Standards of Australia lays great emphasis on the quality and nutrition value of the food. The government has imposed various safety regulations and the hotels and restaurants must comply with those regulations. The aim is to provide a safe, healthy, and hygienic food to the people and lower the incidents of food poisoning and illness. Food businesses in Australia need to comply with the food regulations act of the Australian government. Moreover, restaurants and bars selling liquor must get authentic license from the government (O'Kane, 2012).

Environmental- The waste generated from the hotels and restaurants may have a severe impact on the environment if not disposed properly. To provide an environmentally healthy service, the use of plastics for packaging must be minimized. More environment friendly practices must be implemented.

The Porter’s Five Forces tool is a very powerful tool to understand and assess the position and power of a business. It helps a company to understand the competitive strength and weakness.

Threat of New Entrants- Australia has proven to be an attractive place for setting up new business as Australia has very few entry barriers. The existing companies may thus face the threat of new entrants. Since the Australian market yields high returns and less loss, the market is prone to attract businesses from all over the world. However, a large number of firms may decrease the profitability for all. This can be reduced by blocking new firms to enter the market through incumbents (Dobbs, 2014).

Threat of Substitutes- Existence of products on large scale increases the competition. Customers often switch to alternatives when they find a product of better quality. The threat of substitutes is high as there are many other competitors of Guzmen Y Gomez in the Australian market.

Bargaining power of Buyers- Buyers in Australia have the power to switch companies as they have a lot of options. They may prefer one restaurant or hotel or bar over another. This makes the power of the power of the customers very high. In short, they have high bargaining power. The bargaining power of the buyers depends on the availability of information to the buyers, differential advantage, and the customer value (Porter & Heppelmann, 2014).

Bargaining power of Suppliers- The relation of the suppliers with the restaurant is very good. This helps the industry to grow. The suppliers comprise the raw material providers, labor, and services. The bargaining power of the suppliers is low which helps the industry to grow.

Industry rivalry- Industry rivalry is one of the major determinants of the success of a company. The Australian food and beverage industry has a number of hotels and restaurants. This increases the competition between the companies. There is rivalry on different areas such as in the level of expenditure in advertisement, degree of transparency, and the competitive strategy of a company (McLay, 2014).

VRIO framework is a theoretical tool that is used to analyze the internal capabilities and resources of the firm in order to find a sustainable competitive advantage of the company in the industry. It is a tool for measuring the internal environment of the company. Full form of VRIO model is valuable, rarity, imitate, organized and sustained competitive advantage.

Valuable: It refers to the resources that are responsible for creating value to the organization. The internal resources will be valuable when they are used in increasing perceived customers value in the market. It can be done while increasing product differentiation or decreasing the price of the food items (Killen et al., 2012).

Rare: The internal resources of the company must be rare so that other competitors cannot imitate their strategies and resources. The resources will act as a competitive advantage to the company in the marketplace. On the other hand, when the competitors use same type of resources then it will lead to competitive parity. However, selecting rarity among the commonly used resources is the secret of success of the company in the competitive marketplace (Rothaermel, 2015).

Costly to Imitate: The resources of the restaurant should be portrayed in a way so that competitors cannot imitate it. The different types of complexities a company can face while imitating one’s strategies and resources to it. They are casual ambiguity, historical conditions and social complexity (Knott, 2015).

Organized in capturing value: The restaurant will capture the value of the strategies and resources, when the other four factors will be successful. The restaurant must organize their management processes, systems, organizational structure, policies and organizational culture fully in order to realize the potentiality of valuable, rarity and imitation costs of its capabilities and resources (Pesic et al., 2013).

In the hospitality industry, both tangible and non tangible services are highly important. The entire industry of hospitality is based on the tangible and intangible services. To be successful a hotel or restaurant or bar must have both tangible and intangible services. It is the both these services that make the experience of the customers worth remembering. These services refer to both the physical services and the interpersonal contact between the service providers and the customers. The tangible elements comprise the food that is presented to the customers. The goods including the nature and style of the crockery, glassware, napkins, linen, and cutlery are a part of the total experience (Davis et al., 2013). The menu is also a part of the tangible services for it is because of the menu that the customers are able to gain knowledge about the food they are going to have. It gives them a partial idea about the experience they are going to have. The customers get information through verbal or visual description of the meals or dishes that are available. The machine process is also a part of the total experience. This includes every tool and machine that is used to prepare a food item. This may include coffee machine, gas oven, vending machine, etc (Tamwatin et al., 2015).

The action and services of the staff in a restaurant are of crucial importance and form a part of the intangible services. The intangible services comprise the overall environment offered by a restaurant or hotel. Every place has its own aesthetic appeal which is created by the furniture, décor, and fittings (Giritlioglu et al., 2014). The warm and friendly feel of the restaurant determines the hospitality of a place. One place may give a customer a warm and amiable experience while another may give a cold feeling to its customers. Hence it is very important to establish appropriate furnish and décor so that the customers get a warm and friendly feeling. This makes the experience of the customers far better. The cleanliness and brightness of the environment is also very crucial for a better experience. The organization of the service process is also considered a tangible process (Mari? et al., 2016).


The report is on the analysis of food and beverage sector of Australia. Different sectors of the industry in analyzed by considering an example of a restaurant based in Australia. The restaurant has its different branches not only in Australia but also in other parts of the world. However, different parts of the management functions are analyzed in terms of various theoretical frameworks such as VRIO framework, Porter’s five forces, PESTEL Analysis, etc. These theoretical frameworks explain both the internal environment as well as external environment of the food and beverage sector i.e. in terms of the restaurant in Australia. Apart from that, there are many strategic optional and key skills and resources are mentioned in details along with their key roles while developing different sections of management and different operations of the restaurant. The importance of the human capital resources are mentioned in the report so that the restaurant can identify them and use them properly in required places so that they can get effective results out from it. However, the sector must follow the recent consumer trends that will help them to attract different segments of customers in the country. Innovation will help the company not only to increase the segment of customers but also for the increase of profitability of the company.


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