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 peoples 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 us e appropriate project managementsoftware) 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 informations 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 methodology 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 eatings. 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 skimmings. 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 Arbys 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 Arbys 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,FG I Furntur fittings 10 DH 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,FG 5 4 8000 9000 I DH 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. 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