Term Report: Strategic Management

Term Report
Strategic Management
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Term Report
STRATEGIC MANAGEMENT TERM PROJECT

SUBMITTED TO: Dr. Khalid Amin
COMPANIES Nandos BBQ Tonight Lal Qila Resturant Student Biryani Village Resturant
GROUP MEMBERS Haider Abbas Raza Munesh Kumar (11789) (10318)
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Term Report
Letter of Acknowledgement
Institute of Business Management Korangi Creek, Karachi-75190, Pakistan UAN (9221)111-002-004, Fax: (9221) 509-0968 Http://www.iobm.edu.pk April 09, 2013
Dear Reader, This report has been a great learning experience as it provided us with the opportunity to help apply the concepts been taught throughout the semester. We would like to take this opportunity to thank our instructor Dr. Khalid Amin who made this report possible by providing his unconditional guidance and cooperation throughout the semester. We would also like to thank our family and friends who were always there to support us. Without them and so many other things this report would not have been possible.
Sincerely,
Haider Abbas Raza
(11789)
Munesh Kumar
(10318)
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Term Report
Letter of Transmittal
Institute of Business Management Korangi Creek, Karachi-75190, Pakistan UAN (9221)111-002-004, Fax: (9221) 509-0968 Http://www.iobm.edu.pk
April 09, 2013
Dear Sir, This is the term report of Strategic Management course which was assigned to us by you. The objective of this report is the evaluation and comparison of vision and mission statement and strategic analysis of different restaurants. The report has been completed after the perpetual hard work, determination and devotion of past few weeks. If you have any additional questions, we would be pleased to answer them.
Sincerely yours,
Haider Abbas Raza
(11789)
Munesh Kumar
(10318)
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Term Report
EXECUTIVE SUMMARY
This report covers the Strategic Management Practices at Nandos, BBQ Tonight, Lal Qila, Student Biryani and Village restaurants. The report includes vision, mission and strategic business unit of these restaurants. The food industry is reasonably unattractive as there are already various restaurants and cafs in major cities of Pakistan. The report also includes micro-environment analysis and discussed strategic cost management process. PEST Analysis is also done. Strategic analysis and recommendations are given in which the generic strategy of these restaurants is stated which is focused, cost leadership and differentiation strategy. These restaurants have three main strategies: Market development, Product development and backward integration. Implementation of strategies and recommended to board as to what the company will need to do to implement a new strategy or fine tune its existing strategy. It is also recommended to board the balance business scorecard as the strategic performance evaluation process distinct from traditional financial, marketing, HR evaluation method. In the end there is diagnostic survey of primary and secondary management practices is also carried out and recommendation are given on the basis of their performance.
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Term Report Table of Contents

Letter of Acknowledgement ........................................................................................................... 3 Letter of Transmittal ....................................................................................................................... 4 EXECUTIVE SUMMARY ............................................................................................................ 5 Table of Contents ...........................................................................Error! Bookmark not defined. 1. Nandos .................................................................................................................................... 8 Background ................................................................................................................................. 8 Vision Statement ......................................................................................................................... 8 Mission Statement....................................................................................................................... 8 Strategic Business Units ............................................................................................................. 9 2. Bar B .Q. Tonight........................................................................................................................ 9 Background ............................................................................................................................... 10 Vision Statement ....................................................................................................................... 10 Mission Statement..................................................................................................................... 10 Strategic Business Units ........................................................................................................... 10 3. Lal Qila .................................................................................................................................. 12 Background ............................................................................................................................... 12 Vision Statement ....................................................................................................................... 13 Mission Statement..................................................................................................................... 13 Strategic Business Units ........................................................................................................... 14 4. Student Biryani ...................................................................................................................... 15 Background ............................................................................................................................... 15 Vision Statement ....................................................................................................................... 15 Mission Statement..................................................................................................................... 15 Strategic Business Units ........................................................................................................... 16 Implementation ......................................................................................................................... 17 5. Village Restaurant ................................................................................................................. 18 Background ............................................................................................................................... 18 Vision Statement ....................................................................................................................... 18 Mission Statement..................................................................................................................... 18 Strategic Business Units ........................................................................................................... 19 Competitive Profile Matrix (CPM) ............................................................................................... 20 PEST ANALYSIS ........................................................................................................................ 22 ECONOMIC ANALYSIS ........................................................................................................ 22 Strategic Management Page 6
Term Report
SOCIAL ANALYSIS ............................................................................................................... 23 TECHNOLOGICAL ANALYSIS ............................................................................................ 23 Balance Business Scorecard ......................................................................................................... 24 Financial Perspective ................................................................................................................ 26 Customer Perspective................................................................................................................ 26 Internal Perspective ................................................................................................................... 27 Learning & Growth ................................................................................................................... 27 Recommendations ......................................................................................................................... 30
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1. Nandos Background
In 1987 two great, Robert and Fernando Portuguese, fell in love with Peri-Peri Flame Grilled Chicken. They knew that the world had not tasted anything like it. They made the owner of Chicken land an offer he couldnt refuse, changed the name to Nandos (short form of Fernandos) and by the end of 1987 the first Nandos was born in the humble suburb of Rosetta villa. Johannesburg, South Africa. Next stop was the rest of the world. Nando's came to Pakistan in 2001 and is one of the oldest trading markets in Asia. Pakistan has seven Nando's outlets, four in Karachi, and two in Lahore and one in Islamabad.
Vision Statement
Our Vision is to create a successful global brand that can rival the really big brands of the world
Mission Statement
Devoted to people with an appetite for life, people who love to laugh and live to eat. At Nandos we believe in our flame-grilled Peri-Peri Chicken, we believe its the best in the world. Taste the unique flavor and fire of our Peri-Peri chicken and we are sure you will agree
Strategic Management Page 8
Term Report
Strategic Business Units

Generic Strategy
Although, Nandos Pakistan claims to be following a focused Differentiation Strategy, they havent really implemented that well. Nandos Pakistan caters to that Niche market which requires a different taste and value and is prepared to pay the price for it. Their focus is entirely on the upper Middle and Upper-Upper class. The strategies implemented by Nandos have not exactly catered specifically to this focused differentiation strategy.
2. Bar B .Q. Tonight

Term Report
Background
The Bar.B.Q Tonight Restaurant was inaugurated on 10-11-1988 by our honorable elders whose sincere efforts paved a way to make it a symbol of hygiene and quality. Their aspirations yielded fruitful results and raised the name of BAR.B. Q. Tonight sky-high. Their devotion, determination, dedication and diligence made it possible to win the hearts and minds of people who would visit our restaurant in its early days. Our elders set a new standard in offering large variety of barbecue food in a unique manner.
Vision Statement
To keep our culture alive by presenting our Asian food in the manner that attracts the masses of our society. We assure you that we will keep on doing our best with vigor, will, honesty and pride
Mission Statement
The best test of quality is absolute satisfaction of customers. We have the passion to accomplish the goal of fulfilling the needs of our customers

Generic Strategy
Term Report
Bar B. Q Pakistan claims to be following a focused Differentiation Strategy, they havent really implemented that well. Bar B. Q caters to that Niche market which requires a different taste and value and is prepared to pay the price for it. Their focus is entirely on the upper Middle and Upper-Upper class. The strategies implemented by Bar B.Q have not exactly catered specifically to this focused differentiation strategy.
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3. Lal Qila Background

Lal Qila A Theme Restaurant is the project of Omarson Group; Lal Qila A Theme Restaurant was started in 28th May 1998 with a Mughal Traditional Theme. Lal Qila is not only a restaurant, but is a living chapter from the splendor of our rich heritage where magnificence blends with perfection and mysticism. Strong roots of past meets the magic of the present traditions. Lal Qila Restaurant is a dramatic eye catching, exotic, contemporary restaurant that stands tall to reflect its own unique aura based on traditional social norms with a touch of folk cultural background and impression. Lal Qila Restaurant design and construction is based on traditional architecture executed with minars, burj, jahroka, traditional geometrical and floral patterns on floors, walls and ceilings, glazed tile mosaic work, kashi work, red brick, marble jail, stone etching with carving and traditional copper cut work lamp shades, lanterns, waterfalls and Nahar. Lal Qila Restaurant combines the legendary splendor of Mughal era with culinary eloquence of the modern times having reflection of our royal traditional hospitality. It offers a unique, calm, peaceful, pleasant and traditional environment, which helps to turn a normal dinner into a great royal and rich cultural dining experience. In the main courtyard over 87 varieties of Pakistani, Chinese, Italian, South Asian and Continental, Sea Food, Bar Be Cue and other Appetizers and Desserts await to mesmerize your taste buds through a complete buffet system
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Vision Statement
Five years from now, Lal Qila will have its franchise restaurants spread over in the world by consistently providing the unique International and local cuisine, prepared with the finest available ingredients and outstanding services that creates an extraordinary Buffet dinning experience
Mission Statement
To exemplify & promote excellence, opportunity & leadership in hospitality, guided by relentless focus on our five imperatives, we will constantly strive to implement the critical initiatives requires to achieve our vision. In doing this, we will deliver operational excellence in all aspects and meet or exceed our commitments to our guest
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Term Report
Strategic Business Units Generic Strategy
Lal Qila Pakistan claims to be following a focus Strategy; they havent really implemented that well. Lal Qila caters to that Niche market which requires a different taste and value and is prepared to pay the price for it. Their focus is entirely on the Middle and Upper-Middle class. The strategies implemented by Lal Qila exactly catered specifically to this focus strategy. The company needs to make effort in targeting and communicating their real value to its specific set of consumers. Increase their prices to capture a larger share of their current target market. Open outlet in major cities of Pakistan. Efectively communicate with their niche marketing strategy to their target audience to further emphasize what their brand actually stands for.
Term Report
4. Student Biryani Background

Its a long history of 40 years of hard work, perseverance and passion. The idea of establishing Caf Student was conceived and materialized by Haji Muhammad Ali (Late) in 1969 with very humble beginnings. It all started from home cooked Biryani and a few other dishes served from a small eatery located in the middle of the city, Saddar, Karachi. It is that popular taste of Biryani which dominated the business name of Caf Student and now Student Biryani is the title of fame. The Biryani was prepared by Haji Muhammad Ali (Late) and his family member home from home made spices and recipe.
Vision Statement
Our implicit faith is to reach at your level by serving authentic and delicious Asian foods
Mission Statement
Our mission is to satisfy the tastes and needs of our consumers. Our efforts are focused on bringing the most distinctive and innovative food products to the market
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Generic Strategy
Student Biryani claims to be following a Cost Leadership Strategy, they havent really implemented that well. Student Biryani caters to that Niche market which requires a different taste and value and is prepared to pay the price for it. Their focus is entirely on the lower Middle class and Upper-Middle class. The strategies implemented by Student Biryani catered specifically to this cost leadership strategy.
o Market development Student biryani introduces their present and new products and services into new geographic and demographic areas.
Term Report o Product development Bring back chicken tikka biryani o Diversification Add more to student biryani products and services variety to the consume
Implementation
o Market research Determines areas demand to determines boundaries o Expand menus Healthier choices o Meals will be sold at cost Determine effects on budget
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5. Village Restaurant Background

The first Saltn Pepper Restaurant was established in 1983 by hoteller/restaurant entrepreneur Mr. Mahmood Akbar, considered by many as the pioneer hoteller and restaurateur in Pakistan. The organization, which has its headquarter in Lahore, prides itself on developing Pakistans first chain of restaurants the Saltn Pepper restaurants. For 29 years, the groups focus has been to provide their guests with an exceptional dining experience each and every time they visit. The groups profile includes expertise in Pakistani & Continental cuisine, along with fast food.
Vision Statement
Operating successful restaurant with simply good quality fresh ingredients, good service, comfortable environment and of course reasonable price
Mission Statement
Restaurant guests might come in initially for its convenient location or low prices or even good ambience but consistent Good Quality Food is what will bring them back again and again
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Generic Strategy
Village restaurant claims to be following a Focus Strategy, they havent really implemented that well. Village Restaurant caters to that Niche market which requires a different taste and value and is prepared to pay the price for it. Their focus is entirely on the lower Middle class and Upper-Middle class. The strategies implemented by Village Restaurant catered specifically to this Focus strategy.
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Competitive Profile Matrix (CPM)

Key Success Factors BBQ Tonight We Rat Weig Rat Weig ight ing hted ing hted Scor Scor e e 0.1 1 0.15 3 0.45 5 .12 2 0.24 1 0.12 Nandos Lal Qila Student Biryani Rat Weig Rat Weig ing hted ing hted Scor Scor e e 2 0.3 1 0.15 2 0.24 2 0.24 Village Restaurants Rat Weig ing hted Scor e 2 0.4 2 0.3
Market Share Local Expansio n Price Competit iveness Manage ment 0.10 Financial Position Advertisi ng Technol ogy Custome r Loyalty Product Quality & hygiene Employe e Producti vity Total
0.1 0 .06
0.3
0.4
0.2
0.2
0.2
0.18 0.2 0.1 0.32 0.12 0.8
4 4 1 3 3 4
0.24 0.4 0.05 0.24 0.18 0.8
2 3 2 2 3 3
0.12 0.3 0.1 0.16 0.18 0.6
2 2 1 3 1 2
0.12 0.2 0.05 0.24 0.06 0.4
2 3 2 2 3 3
0.12 0.3 0.1 0.16 0.18 0.6
0.10 2 0.0 5 0.0 8 0.0 6 0.2 0 2 4 2 4
0.8 0
0.16
0.24
0.24
0.16
0.24
1.0
2.57
3.12
2.44
1.82
2.55
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EXTERNAL FACTORS
Scanning the external environment PEST Analysis Market saturation Opportunities and Threats Customers Competitors Suppliers
INTERNAL FACTORS
Restaurant business requires expertise in the operating side of the business like customer service, quality of product and value equation. Student Biryani is weak in this aspect culture. Management Manpower Equipment Material (ingredients) Budget
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PEST ANALYSIS
PEST is an abbreviation that stands for Political, Environmental, Social and Technological factors of the macro environment. These factors directly affect any business success or failure. These listed above factors is sometimes act as a threat for the firm and are not in control of the firm. PEST Analysis is the analysis based on the macro environment of the country. Political factors Economic environment factors Social factors Technological factors
ECONOMIC ANALYSIS
Consumers are becoming more budget and health conscious demanding healthier menu and the lifestyles of people are changing. Higher level of income enables customers to dine out more often. Impact People like to eat the food which is healthy and quickly served. As income level increases more and more people are becoming its customers.
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Term Report
SOCIAL ANALYSIS
Social factor is directly deals with the people or culture of the state in which you are doing business. If firm wants to dictate the social factors then these factors became threats to the firm others wise if they work within the social norms then social factors becomes a real opportunity to explore.
Consumers are becoming more budget and health conscious demanding healthier menu and the lifestyles of people are changing. Higher level of income enables customers to dine out more often.
TECHNOLOGICAL ANALYSIS
Technology is something that must be adopts in order to keep the Profits going on a high rate. If the Industry settles according to the technology then it will open many doors of success and achievement and if they ignore them to improve on technological backgrounds then that particular company goes into darkness Restaurants are renovating outlets and also locating outlets on more prominent locations and upgrading the facilities of kitchens. They also offer prepaid meal voucher for their corporate customer. They taking orders online.
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Balance Business Scorecard

The balanced scorecard is a strategic planning and management system that helps everyone in an organization understand and work towards a shared vision. A completed scorecard system aligns the organizations picture of the future (shared vision), with business strategy, desired employee behaviors, and day-to-day operations. Strategic performance measures are used to better inform decisionmaking and show progress toward desired results. The organization can then focus on the most important things that are needed to achieve its Vision and satisfy customers, stakeholders, and employees.
The Balance Scorecard is a strategic approach and performance measurement system that enables organizations to translate a companys vision and strategy into implementation, working from four perspectives: 1. Financial Perspective: To succeed financially, how should we appear to our shareholders? 2. Customer Perspective: To achieve our vision, how should we appear to our customers? 3. Business Process Perspective: To satisfy our shareholders and customers, what business processes must we excel at? 4. Learning and Growth Perspective: To achieve our vision how will we sustain our ability to change and improve? Each of these perspectives is evaluated through objectives, measures, targets and initiatives.
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Term Report Objectives Financial 1. To grow revenues 2. To increase profits and ROI Measures 1. Capturing more urban markets 2. Financial Ratios And Trend analysis Targets Initiatives
1.Increasing Opening revenues by outlets 20% in Islamabad by the end of and 2008 Faisalabad 2.Increasing along with opening ROI more outlets in
Customer
1. Attract and retain more customers 2.Stabilizing market for business executives 3.Increase brand loyalty
1.Increased customer database 2. Repeated customers
1. Increasing sales volume by 35% by end of 2008 2. Sales of brand loyalty cards by 10% by end 2013
1. Stabilizing delivery networks 2.Introducing more variety based menu 3. Introducing Brand Loyalty Cards 1. Initiating poultry farms in South Africa 1. Training of employees 2. More product Research and Development 3. Infusing Global culture.
Internal
1. Backward Integration
1. Dealing with one supplier for sauces and chicken 1.Participation in Decision making 2. Measuring demand for new products 3. Extent of Global culture adoption
1. Driving costs out by 40%
Learning & 1.Training and Growth developing employees 2.Accelerate R&D role 3.Adopting dynamic, energetic and risk taking culture
1.Pool of energetic and risk taking workforce 2. Introducing new and improved products 3. Cultural Transformation
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Financial Perspective
Nandos, Bar B.Q Tonight, Lal Qila, Student Biryani & Village Restaurant foremost objective in terms of financial perspective is to increase its revenues and ROI. Since they target niche market of low-middle, upper-middle and upper upper class, the measurement of these financial objectives can be made through capturing new urban markets in Pakistan, such as in Islamabad and Faisalabad.
They can open up their outlets in these cities and can develop their market in new geographical regions thus increasing revenues. Moreover, they can also expend its number of outlets in Karachi, especially in areas where it can find its potential market such as Zamzama, Boat Basin, Stadium Road, and Sharah-e- Faisal. Since a bigger proportion of revenue is generated from the business executives, opening outlets at corporate localities will benefit them with more revenues and thus increased ROI.
Customer Perspective
Since these restaurants are opting for market development, it can firmly constitute its objective of attracting and retaining customers with respect to the customer perspective. The majority of the customers walking into them are business executives coming for lunch. This grants a good market to them for stabilizing the market for the business executives through their Loyalty Cards.
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Term Report
Internal Perspective
The uncertain economic conditions of Pakistan regarding Bird Flu also have adverse affect over the sales of Nandos, Bar B.Q Tonight, Lal Qila, Student biryani & Village Restaurant. This can be rectified by importing chicken from their own farms under the hygienic processing, free from bird flu endangers
Learning & Growth

Since the strategies proposed and the objectives undertaken revolves around the market and product development, they need to put great emphasis on the training and development of the employees in managing these objectives and to further training the new hired employees in accordance to the increasing operations in various regions. Moreover, the company needs to exert a dynamic, energetic and risk taking culture to encourage the workforce move vigorously in implementing the strategies and taking and managing calculated risks in market development process. Also since, Nandos, Bar B. Q Tonight, Lal Qila, Student biryani & Village restaurant is recommended for product development, another objective of they shall be to accelerate the R&D activities in introducing new products, for a variety based menu. These objectives can be achieved through more product research and development, training employees and infusing global culture in Nandos, Bar B.Q Tonight, Lal Qila, Student Biryani and Village restaurant Pakistan.
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PORTERS MODEL
Professor Michael Porter, of the Harvard Business School, believes that position in the market place is all important and has developed what he calls his five forces model to reflect the basic competitive market forces which intrude on any business.
1. Rivalry among existing businesses competing to supply the same product or service:
Competition is very intense in food industry as you can see a number of restaurants almost in every other street. Its main competitors are: FOOD CENTER, KARACHI FOOD, CENTER & BUNDOO KHANS RESTAURANT
2. The threat of new entrants in the marketplace

If the barriers to entry are high there is much less of a threat to existing players than if it is fairly easy for a new firm to join.
3.
The threat of substitute products or services,

Differentiating by offering unique value menu item New menu items do come up but the older ones still are sold Promotion of substitutes is very high
4. The bargaining power of suppliers and, in particular, their effect on costs

Suppliers for different ingredients Many vendors and ingredients suppliers but some deliver quality and reliability Suppliers can open their own food outlets.
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5.
The bargaining power of customers, and in particular, their effect on prices:

As the fast food industry has matured it has change the consumer preferences and consumers are going for new menu and differentiated Products. Customers are many No cost on switching Customers want high quality food Common product which can be supplied by any one
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Recommendations
1. Nandos, Bar B.Q Tonight, Lal Qila, Student biryani & Village restaurant customers want it to open up outlets in other cities of Pakistan and expand their business. Also, the customers want more variety in the menu. Therefore, these restaurants should build a strategy of market development and product development around what the customers really want. Similarly, these restaurants should also fine tune its strategy based on the changes that take place in the marketplace. Simply coming up with a new strategy doesnt work; the strategy also needs to be communicated to customers and also to the employees within the organization. To do so, Nandos, Bar B.Q Tonight, Lal Qila, Student biryani & Village restaurant should stay focused on its strategies. 2. As the fast food industry is growing in Pakistan and has potentials to cope up with the market needs, so companies which have established brands like we have taken in this report needs to follow the strategies that help them to grow and cater the need of customers. 3. All these companies started by a sethia based concept and which needed to be revived. 4. The customers at Nandos, Bar B.Q Tonight, Lal Qila expect the same quality grilled food, fun and energetic environment and efficient service whenever they come to these restaurants. To do so, they should put the decision making authority close to the front line employees so that they are better able to react to the changing market conditions. They should also
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Term Report improve its productivity at a rate that is roughly twice the twice the industry average.
5. The culture of these restaurants is an entrepreneurial culture which means that it should encourage energetic, dynamic and risk taking culture. The entrepreneurial spirit of they can attract talented people. Therefore the people at them should embrace the same values of pride, passion, courage and integrity. In the same way, they should also empower its employees to make independent decisions so that they themselves are able to find ways to improve operations. They should continuously reward the high achievers within the organization and at the same time keep raising the performance bar, so that the employees keep on improving their performance.
6. The structure of the restaurant should be such so that it reflects simplicity in which its easier to work in and with the organization. They can do so by promoting cooperation and exchange of information across the whole company. This would further reduce bureaucracy. 7. They seriously need to come up with more new and innovative products. Also, it should not hesitate to cannibalize existing products. Furthermore, they need to enhance all its operating processes.
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Objectives Measures Targets Initiatives
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Term Report: Strategic Management

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Term Report

STRATEGIC MANAGEMENT TERM PROJECT

GROUP MEMBERS Haider Abbas Raza Munesh Kumar (11789) (10318)

Haider Abbas Raza

April 09, 2013

Haider Abbas Raza

Term Report Table of Contents

Strategic Business Units

2. Bar B .Q. Tonight

Strategic Business Units

3. Lal Qila Background

Strategic Business Units Generic Strategy

4. Student Biryani Background

Strategic Business Units

5. Village Restaurant Background

Strategic Business Units

Competitive Profile Matrix (CPM)

0.18 0.2 0.1 0.32 0.12 0.8

0.24 0.4 0.05 0.24 0.18 0.8

0.12 0.3 0.1 0.16 0.18 0.6

0.12 0.2 0.05 0.24 0.06 0.4

0.12 0.3 0.1 0.16 0.18 0.6

0.10 2 0.0 5 0.0 8 0.0 6 0.2 0 2 4 2 4

Balance Business Scorecard

1.Increased customer database 2. Repeated customers

1. Driving costs out by 40%

Learning & Growth

2. The threat of new entrants in the marketplace

The threat of substitute products or services,

4. The bargaining power of suppliers and, in particular, their effect on costs

The bargaining power of customers, and in particular, their effect on prices:

Objectives Measures Targets Initiatives

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