SWOT and PESTEL Analysis of Seafood Restaurant

organize and PESTEL Analysis of Seafood eating houseSUMMARYJack Sprat is the owner of seafood restaurant in a coastal town. He is 60 socio-economic class old and doctor has advised him to take rest so he had appointed a charabanc to look after the telephone circuit operation and he use to come to see the short letter once in a week. But once he handed over the communication channel to the manager his military controller is non doing well and there is continuous declining in the business.So in order to find touch on owner has been approached to the author to analyse the case and suggest as what should be do to bring back the business of the restaurant.Author has analysed the business with the tools of business (case) analysis-SWOT, and mash and further pecuniary data has to a fault been taken into consideration to find out the declining trend and come to a shutdown as why business is going down.In order to evaluate the business operation and put the findings in the repo rt author has done extensive research-secondary research and analysed the case with his blue-chip suggestions.ACKNOWLEDGEMENTAuthor would like to convey his gratitude to those entire people who helped him to enhance his understanding of the case and analyzed the situation so that a valid conclusion of the case can be drawn. Author has completed this case victorfully and has been presenting his findings with suggestion in this report. So author would like to thanks to the Module give lessons for kind support and guidance.INTRODUCTIONJack Sprat is 63 year old owner of 60 seat licensed seafood restaurant that is situated in a costal town. in the beginning starting this business Jack was simply a Manager at a local Bluebeckers Restaurant. But an inheritance left(p) this restaurant to him. Since the bluffing of this restaurant business it has given very good return.The belief of Jack towards success f this business is the Maintenance of high standards in fod production and presentat ion. Other fact is Menu and beverage inclination of an orbit has been fairly constant since beginning of this restaurant. Jack did not change menu and beverage list because business was giving modest return since beginning.But jack is not regular to the restaurant and he has appointed a Manager to manage the business operation and he use to come to the restaurant to see the business operation once in a week. This is because at this age (63) he has been scurvy from health problem and his doctor has advised him to take rest. But business of this restaurant has asleep(p) down as soon as it was handed over to the manager. Absenteeism of the staff has been change magnitude.Keeping in mind the remedy of the situation author has established aim and objectives of this report, here are the aim and objectives written in tinyAim of this report is to find remedy of the existing problem or discrepancies of the restaurant and give valuable suggestions to overcome from these problems so that business can be put on its old pattern-profitable.Objectives areFinding most weighty problemsIdentification of further information that would be helpful in making virtual(prenominal) ends for the future of the businessTo list the prioritiesDrawing an action PlanThe structure of this report is as follows First of totally main body has been presented wherein SWOT, PEST, and different flesh out analysis has been done. Then conclusion has been drawn and bibliography (list of references) has been given followed by appendix section where additional informations has been provided.MAIN SECTIONAim and objective No.1 Finding authoritative problemsBefore providing solution of whateverthing one has to find the problems first. So to find problem related to any business it is very first step to conduct SWOT analysis and PEST or PESTLE analysis.Before going for the SWOT analysis of the business concerned it is important to understand SWOT first. SWOT compend is the detailed search and list ing of factors from situational analysis that might or forget impact the businesss strategy. Strategic market placeing is based on the SWOT analysis. The process by which SWOT factors are derived is to carefully review the intimate analysis for strengths and weaknesses, and the environmental analysis for opportunities and threats, and to thusly record. (Reich, Z.A, 1997)According to (Morrison, J 2002) The SWOT analysis is a unremarkably used planning tool, which assesses the firms strategic profile in terms of its strengths, weaknesses, opportunities and threats. Focusing on both internal and international environments, it serves to highlight a firms distinctive competences, which will enable it to gain competitive advantage.Based on the above information from the scholars it is true that business environment can be divided into two part-internal and external environments. Internal environment consists of all factors that is internal part of the business. These internal facto rs are within the control of the business. Strength and Weaknesses of the business can be found in the internal environment of the business. External factors are those factors which are not within the control of the business and to be into existence business houses has to change in their internal policy and adjust itself to cope with the external environment factors. Opportunities and Threats are the factors that are part of external environment of a business.SWOT Strength, Weakness, Opportunities and Threat Analysis of Seafood Restaurant Business of Jack SpratSTRENGTHSWEAKNESSESEarlier this business was profitableIt is established organizationMaintaining high standard in food and presentationStaffs are acquainted(predicate) with their workCustomers feel that restaurant is conveniently placed and charges reasonable priceOwner is not able to give full time attention to the businessManager is less empowered-as he feels less scope has been given to him for the development of this bus inessNumber of staff has been increased-which is extra burden on payroll expenses of the business.No refurbishment done properly yearlyMaintenance and Hygiene problemInsufficient fund/ resources for spending on maintenance and HygieneMenu pickaxe is stale and boringImproper management of food due to lack of proper forecasting of guests.OPPORTUNITIESTHREATSRestaurant is old so having established market market Image is good- reasonable price and consistent standardDilution of market share due to inability to refurbishmentEnvironment Health officer whitethorn not be informal in future and there will be time when formal notice will be issued.PEST ANALYSISBefore analyzing PEST or PESTLE factors from a business point of view it is important to understand these factors (Political, Economical, Socio cultural, scientific and Legal).A PEST analysis is an analysis of an external macro environment that affects all firms. Such external factors usually are beyond the firms control and sometime s present themselves as threats. For this reason, some recite that fellow is an appropriate term for these factors. However changes in the external environment also create new opportunities and letters sometimes are rearranged to construct the more bullish terms of STEP ANALYSIS. Many macro environmental factors are country specific and the pest analysis will need to be a performed for all countries of interest.Political FactorsTax policyEmployment lawsEnvironmental regulationsTrade restrictions and tariffsPolitical stabilityEconomic FactorsEconomic growthInterest rateExchange ratesInflation rateSocial FactorsHealth consciousnessPopulation growth rateAge distributionCareer attitudesEmphasis on safetyTechnological FactorsRD activityAutomationTechnology incentivesRate of technological changewww.netmba.com/strategy/pest/ Accessed on 2/01/2011Aim and objective No.2 Identification of further information that would be helpful in making realistic plans for the future of the businessInfo rmation involve towards market variance-target marketInformation to the case is very important to analyze any business health or problem. It is equally important like medical tests are important for human body for remedy of any kind of complain of a patient.There are other tests or scanning is needed for business analysis. Market divider is one of them. Market segmentation market consists of buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices. Because buyers bring on unique needs and wants, each buyer is potentially a separate market. Ideally, then a seller might design a separate marketing program for each buyer. For case a caterer can customize the menu, entertainment, and the setting to meet the needs of specific clients. However, most companies are unable to offer complete segmentation. The cost of complete segmentation is high and most customers cannot afford completely customized products. Compani es therefore, look for broad class of buyers who differ in their product needs or buying responses. The restaurant labor offers many examples of segmentation by a variety of variables. (kotler,p 2004)The reason behind knowledge of market segmentation is needed because until unless its not known that which segment is existence targeted by the organization concerned (in this case Restaurant of Jack Sprat), it would be very difficult to compare the strength of that segment for the business. In this case its not given in the case so its important to analyse this business from its segment point of view.Information Needed for competitor analysisTo get success of the business its needed to deal with customers, suppliers, employees, and others. In almost all cases there will also be other organizations offering similar products to similar customers. These other organizations are competitors. Objective of the other organizations is the same as yours to grow, make money and succeed. Effect ively, the businesses are at war fighting to gain the same resource and ground the customer. And like in war, it is necessary to understand the enemy How he thinks What his strengths are What his weaknesses are Where he can be attacked Where the risk of attack is too capital.. And so on. And like in war, the competitor will have secrets that can be the difference between profit and loss, expansion or bankruptcy for the business. Identifying these secrets is and then crucial for business survival. (http//dspace.dial.pipex.com) accessed on 2/01/2011Other information needed is about its competitors. Information of competitors is very important to know the business of competitors and further business concerned can be compared with the competitors. So competitor analysis is very important.Aim and objective No.3 To list the prioritiesFirst of all instant action should be taken to solve Hygiene problem.Proper forecasting of guests so that underproduction and overproduction both can be kept under controlExtra men has to be reduced so that there will be less burden on payroll costChoice of menu has to be increasedManager should be empowered or can be changed (as information is not given properly and in detailed so it is impossible to say to change)Somehow owner has to be in touch even over the phone to monitor the business operation and if possible frequency to visit may be increased.Local bank should be approached for short term loan for the refurbishment activities.Aim and objective No.4 Drawing an Action PlanAction plan is a process that includes assessments of own strengths, available resources and market opportunities. There must be idea about marketing objective of the organization concerned then a plan can be prepared and further implemented to achieve the determined objective. In other words these informations are basic and needed at very first step towards making action planMarket and trading environment of the business concernedDecision about market busi ness is targeting toKnowledge about differentiation or advantage of uniqueness of own product and servicesDeciding marketing mixEstimation of investment company etc.ACTION PLANPRODUCT Option in Menu list will be givenPRICING May charge little higher than what has been chargingPROMOTION There is need to promote the product and create awareness to remove the negative image of the organization. So it can be done through normal aids of advertisement-News papers or T.V Channels. Through T.V Channels it may little costly affair in that point of view day by day is better.Other Actions to be takenIt could have opened even on Sunday to attract customers want to utilize their holidays. So it will be open all 7 days.Fund should be managed instantly- It can be done by approaching Commercial Banks for short term loans.Refurbishment will have to be done as soon as loan is approved.Employees have to be re-motivated so that absenteeism of staff can be kept under control. taxation (SALES) POINT OF affectFood sales has been increased in 2007-8 by 4.3% compared to 2006-7, and it gone down in the pecuniary year 2008-9 by 3.95% compared to 2007-8 sales of food. liquor Sales has been increased in 2007-8 by 5.97% compared to 2006-7 and further it increase by 15.59% in the year 2008-9 compared to 2007-8.Overall Total Sales has been increasing in the financial year by 4.67% in the financial year 2007-8 compared to 2006-7, and further increased by 6.57% in the financial year 2008-9 compared to 2007-8.DIRECT COST POINT OF VIEWIn the financial year 2006-7 food cost was 42.05% of its sales and in 2007-8 it became little favorable by going down to 41.16% of its sales figure and in the year 2008-9 in again gone up to 43.63%Direct cost of Liquor is 59.72% of its sales in the financial year 2006-7, and 57.70% in 2007-8 and further 57.91% in 2008-9. So its favorable as its in declining trend.Total direct cost is 54.01%, 55.11% and 52.88% in the financial year 2006-7, 7-8, and 2008-9 res pectively which also seems favorable because in 7-8 it gone little up but again it gone down by good margin-around 2 to 3%GROSS PROFIT POINT OF VIEW double-dyed(a) profit of food is 57.95%, 58.84% and 56.37% in the financial year 2006-7, 7-8, 8-9. This shows increase in 7-8 and further decline in 8-9.Gross profit of Liquor is 40.28%, 42.30% and 42.09% in the financial year 6-7, 7-8, and 2008-9 respectively. Overall it is in favorable trend.Gross profit in the financial year 2006-7 is 54.01%, 55.11% in 2007-8 and 52.88% in 2008-9 which seems declining trend. In the year 2007-8 it gone up but in 208-9 it came down. This is because there was declining of sales of food in the financial year 2008-9 by 3.95%, otherwise sale of liquor in this financial year was good and direct costs were also behaving favorably.INDIRECT EXPENSES POINT OF VIEWThere are three percentage of indirect expenses-labour, overheads and operating expenses and maintenance expenses. come up spent in labour is in inc reasing order i.e., 29.76%, 31.51% and 33.21% in the year 6-7, 7-8, and 2008-9 respectively. This shows restaurant is spending more % every year in its staffing.Overheads and operate expenses seems within control as its 8.78%, 7.21% and 8.36% in the year 2006-7, 2007-8, and 2008-9 respectively.Maintenance expenses is 1.61% of sales in the financial year 2006-7, 1.40% in the financial year 2007-8 and 0.91% of sales of financial year 2008-9. This shows that organization is spending very less on maintenance expenses.Overall total indirect expenses is 40.15% of its sales in the financial year 2006-7, 40.12% in 2007-08 and gone up in the financial year 2008-9 to 42.48%NET PROFIT POINT OF VIEW remuneration profit is 13.86%, 14.99% and 10.40% in the financial years 2006-7, 7-8, and 8-9 respectively. This shows that Net profit has going down, and in the financial year its gone down with huge gap compared to previous years percentage.Overall its a matter of discourse and management should pay attention to the indirect costs as percentage of indirect cost is very high. As gross profit is in 50% so almost 40% of sales are being spent for indirect expenses. Although management is not spending much in maintenance component of indirect expenses but other components i.e., overhead and operating expense, and payroll expenses are very high that is the reason Net profit of the restaurant is not attractive. remainderAuthor has analysed the case of Jack Sprats restaurant and found that major problem is its hygiene and maintenance and indirect expenses. These two of the factors has to be kept under control and converted into favorable mode only then this organization can earn profit like previous time.There are other areas also that needs attention i.e., arrangement of fund, manpower management, empowering manager etc.BIBLIOGRAPHYBritton, C and Worthington. I (2003) The business environment, 4th Edition, UKPrentice hall.Hooley.G(2004) Marketing strategy and competitive positioni ng, tertiary edition UK Prentice HallKotler, P. (2004) marketing for hospitality and tourism, 3rd Edition, DelhiPersonLuck.D and Rubin, S.R (1996) Marketing Research,7th Edition, USAPrentice hallMorrison, J (2002) the international business environment, initiative Edition, New York Pal grave.Reich, Z.A (1997) Marketing Management for the hospitality Industry,1st Edition, Wiley and sons Canada.Wearne.N (2001) Hospitality Management, 1st Edition, New Delhi Globalwww.netmba.com/strategy/pest/ Accessed on 2/01/2011http//dspace.dial.pipex.com) Accessed on 2/01/2011