1.Discuss what Francesco’s strategy of “all you can eat” will do to the Food Average Spend statistics for the week and also the likely effect on the restaurant’s food cost percentage.
2.Discuss the key information to be monitored over the next few weeks to measure the results of this strategy.
3.Critically analyse how you would have investigated the problem and what strategies you would have implemented to improve the overall profitability of the restaurant.
Bar & restaurant are an important part of the hospitality industry. Their success matters a lot to the hospitality industry and to the local economy. However, such firms need to fight hard to get the desired success. There are certain factors that resist the much needed success. Selecting an appropriate menu style is one of such factors that resist the success. Additionally, food and waste management is another challenge, which influences the profitability of business. There are different menu styles such as “a la carte” and “buffet”. Different firms keep on scuffling in between the different menu style to attain and maintain a healthy customer base (Mohammed and Rashid 2012). This study is aimed at Bellini Italian Restaurant, which is an authentic Italian restaurant based in Australia. The study revolves around a given scenario, which highlights the declining profitability of the case study firm. Additionally, this also highlights the excessive wastage of food, which is another identified factor that contributes to the declining profitability. Francesco Del Piero, the owner of the company has thought of switching over to a new menu style, which is “all you can eat buffet concept”. The study tries to figure out what differences te new menu strategy brings to the Bellini Restaurant.
1.Analyzing the effectiveness of the chosen strategy
The switch over option can be effective because it is a kind of buffet style that provides a meal in package. This strategy will ensure an increased unit of sales as foods will be provided in package. However, this does not ensure an increment in the profitability margin. Packaged meal will have few such items that are low in cost. This further means a reduction in the percentage of profitability. Additionally, such menu style will form a different customer segment, which may be significantly different to the one with the “a la carte” menu. A la carte menu suits the high income group. The implementation of the new strategy might cause to lose those customers who belong to high income group. On the other hand, the planned buffet style might attract budgeted group, which was lesser possible with the “a la carte” menu style (Wansink and Love 2014).
The planned strategy will allow reducing the price of some foods from menu. This will be affordable for many. Moreover, this will attract those customers who could not become a part of it due to the high priced menu. This will also considerably reduce the average spending on food items. If this happens this will directly influence the total cost of production. Moreover, an appreciation is expected in the profitability at the end of month. However, food wastages might increase. Buffet style offers food in packaged system, which means customers might not eat all the items. Henceforth, wastages will be comparatively higher. Overall, the planned menu style might produce mixed results such as sales will increase; however, wastages will also be higher (Pirani and Arafat 2016). In such situations, this will be challenging to identify the profitability of the new menu concept.
This strategy will also bring some key changes. This might enhance the sales volume, which is one of the requirements of the Bellini Restaurant. An increased sale will encourage for a continued operation with the buffet style service. However, the expected increment in the food wastages might discourage on the other side. This has an indirect impact on the overall cost of production. Food wastage reduction is one of the key factors that widen the gap between the cost of production and the incurred profit (Pugh et al. 2013).
Key areas of observation for coming few weeks
Visitation rates & perception of customers
An incrementing behavior of visitation rates depends much on the customer’s perception. The changed menu style will definitely influence the perception of customers. However, this is really difficult to analyze whether the change will be positive or else. The changed menu is expected to enhance the sales unit. On the other hand, it is also expected to enhance the food wastages. A changed menu style will also change the customer’s perception. There will be some customers who had never been to the restaurant before. They are here because they now have foods in their budget range. Visitation of such customers will increase. However, those who are selective they might find some other restaurant that offers “a la carte”. Visitation of such customers will be hampered. Visitation of customers depends truly on what perceptions they have (Ryu, Lee and Gon Kim 2012).
Maintenance of food preparation & the wastages
Keeping a track of the food production and the wastages will be an important task for Bellini Restaurant in coming few weeks. Food preparation can be monitored through effective use of inventory management. An effective inventory management will let the management know the outflow & the inflow of the required materials. This will help in conducting a deeper analysis of the food preparation. Wastages are also required to be monitored to know the change in wastages after the implementation of the planned strategy (Sabar and Rahim 2017).
Contribution comparison of different menu (buffet vs. a la carte)
Comparison is also required in the existing strategy and the planned strategy. Inventory management will also play a handful role here. This will tell the earlier track of food preparation and wastages. This will also tell the future food preparation and wastages with the newly thought strategy. The inventory management will also help to know the difference in performance with both the menu style. This is indeed required as it is unrealistic to rely over a single menu style. A realization is indeed required to feel the necessity of switching over to another menu strategy. Such realization can be effectively gained by comparing the performance of two menu styles (Lin 2016).
Overall outcome in terms of sales volume & profitability
This is also very important to analyze as this will only decide the profitability of the switch over that has been adopted by the Bellini Restaurant. The purpose behind the switch over was to increase the sales and to reduce the food wastages. This can be done by making a comparative analysis of the two strategies in terms of its effect on sales volume and profitability. A continuous monitoring is required over the few coming weeks to compare the difference in performance. Sales volume & profitability is the ultimate requirement, which will only be attained with an increased sale and with reduced food wastages. The planned menu style needs to be monitored on a weekly basis to understand the differences made to the sales volume and profitability. If it is following a progressive trend then this will be termed a success. On the other hand, if it does not, there will be the need to analyze the food preparation and food wastages on a daily basis. If at all the strategy does not look effective then it will be better to switch over to a different menu style (Becerra, Santaló and Silva 2013).
3.Analysis (Discussing the key points)
Key points found in the above discussion are food preparation and waste management. Food and waste management is a challenging task in restaurants. This is due to the different kinds of customers in the specific area. It is unrealistic to satisfy the needs of every single local people. However, the success really depends on potential customers. There are different kinds of menu style such as “Buffet”, “a la carte” and many others. It is therefore very important to observe the results of the different menu style. A comparative analysis will only help to understand the most appropriate menu style for a particular restaurant. It is important to monitor the food preparation on a daily basis. This is required to understand the behavior of inflow and outflow of foods. This will also help to understand the wastages on a daily basis (Melikoglu, Lin and Webb 2013). This is really important to know the cost of production and the wastages on a daily basis. This is only that will help in understanding the needs of implementing a new menu style, which is itself a fact with most of the reputed restaurant chains across the globe.
Problem investigation & relevant recommendation
Auditing would have been a much better idea to investigate the operational issues. This helps to know the inflow of raw materials on a daily basis. This will also communicate the sales of different food items, which is necessary to figure out the most loved items in the restaurant. Auditing will also tell the exact wastages on a daily basis (Kumbhar and Joshi 2012). These two outcomes are extremely important to understand the influence of the selected menu style. Moreover, this will support a timely decision on changing the menu to suit the needs of maximize customer.
Table D’hote (Deals) service could have been a fairer move for the Bellini Restaurant. The strategy encourages offering the food & beverage items on fixed prices. Additionally, there is a need to implement this strategy alongside the “a la carte” system. This will serve the needs of both the budgeted and high income group people. A combination of both the menu style will speak of its creativity, which will catch a wider customer base. Indeed, this is important to attain a healthier sale. This is also important to reduce the food wastages. Food wastages will be reduced by using an improved forecasting system through an improved inventory management.
Bellini Italian Restaurant had used the a la carte“menu style but it had experienced a decreasing trend in profitability margin. Additionally, the CEO of the restaurant has thought of a different menu style, which is “all you can eat” in buffet style. The study has shown that the planned strategy might also be less effective in reducing the much needed food wastage. The study has suggested the fact based on different analysis such as making observation on few key terms over the coming weeks. The study has indeed suggested the use of a combination of two menu style for the restaurant in order to enhance the customer base and hence the sales volume. Table D’hote (Deals) service has been suggested to use along with the “a la carte” system. This will attract the both kinds of groups such as the budgeted group and the high income group.
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