Business Introduction

The strategic plan of St. Anthonys College was made last 2006 with the main purpose of aligning the different units of the college for the common mission and vision. The organizational structure was revised with some units fused together and other new units were created. The creation of Business Resource Center which will handle all income generating activities of the college which is not related to academics were created. It is because of the center in which the St Anthonys College Canteen was created. Formerly food services were handled by concessionaires of which each one is paying a fixed monthly rate. However, pricing, quality of food and other services are not monitored and supervised. Some concessionaires even had defaulted on the payment of rent and settling of water and electric bills. Given these situation, it was decided by the administration a canteen manage by the school are to be established with the food services centralized in the canteen. The following are the objectives of the St. Anthonys College canteen: a.to provide food services to the community which is sanitary and affordable. b. to increase the income of the school in terms of the profit generated. c. to provide the Hotel and Restaurant Management students an avenue for the on the job training. External controls in terms of sanitation and other cleanliness issues were settled by seeking help with the Department of Health for the needed requirements for the operation to start. The employees were also outsourced to an agency to minimize expenses in terms of salary and

compensations. It operates from Monday to Saturday. It is headed by a manager and nine (9) employees composed of two (2) cooks, three (5) helpers and one (1) cashier. Work schedules are staggered and operation depending on the demand of the tasks needed to operate. The canteen is open from 7 am to 5 pm from Monday to Saturday. Aside from the prepared food by the Canteen Cook, the canteen also served as an outlet for some accepted food products, like meat and poultry, fruits in seasons, and drinks. It also accepts foods that are prepared outside subject to the approval of Student Affairs Office upon checking of proper preparation and submission of needed documents.

Market Situation and SWOT With different threats from inside and outside the community, the canteen has not reached its optimum operation. It is seen here, that some of its weaknesses are not even answered while the continuing threat are still present. With data taken from the Finance Department showed that profit is declining and operational cost continued to increase. Different food establishments outside the school are sprouting capturing the market which is supposed to belong the St. Anthonys Canteen. Employee turnovers are also relatively fast causing disruptions on the operations. Coordination between units being served is not smooth. Red tapes in terms of requisition of equipment and supplies creates delay in food preparation. With so many things to be answered and addressed in order that the operation is to be at optimum the following SWOT analysis is made:

Using the SWOT analysis the following is the current market situation:

INTERNAL ENVIRONMENT Strengths 1. The target market is clearly defined with the spending capacity of buyers reliably estimated. 2. The location is ideal and prominently located. 3. The bulk of the customers belong to the segment of population that have more buying capacity. 4. The finance office acts as an auditing unit for the operation. 5. Employees are outsource making the salary and compensation acceptable for Weaknesses 1. Market is finite and can not be expanded. 2. Space available is limited and can only handle at most fifty students inside the canteen. 3. Service time for the customers that have relatively bigger buying capacity is limited. 4. Tedious processing in terms of liquidations, ordering process of supplies, and cash for emergency needs.

the operation. 6. Permits concessions of goods which lessen the risk of the canteen in terms of spoilage and also lessens capitalization. 7. Target market is controlled in terms of their mobility. 8. The canteen can order in bulk which makes the inventory more manageable and can avail of bigger discount. 9. The canteen can transact directly to suppliers which can lower cost of goods. 10. The canteen can also provide other services to outside clientele which makes use of school facilities. 11. Stronger relationships of employees with the target market

5. Salary is still relatively high for the outsource compared to the outside business. 6. Demand of services have very high variance of which peak and lean times are clearly defined. 7. The canteen is subject to lean demand of which vacations, holidays and no class days greatly contribute to amount of income generated. 8. Totally depends on the presence of students for sales. .

EXTERNAL ENVIRONMENT Opportunities Threats

1. Can change its menu easily depending on the seasonality of supply that are available. 2. Food is subject to periodic inspection both internally and externally. 3. Can choose wide range of similar supply that are available in the market which can significantly affect the cost of sales of good. 4. Can placed goods that are in trend either by concessions or by actual production. 5. Can use the leverage of captive market to get better deal in products that offer rebates, loyalty and exclusivity.

1. Similar products are offered by competitor outside the college. 2. Is subject to unequal level of playing field in terms of salary and compensations to workers. 3. Decrease in enrollment because of other colleges being more aggressive in enrollment campaign. 4. Same products sold outside is relatively less costly. 5. Permits and license to operate from time to time change with different requirements for the operation.

The Internal Environment As can be seen in the table, the strengths and weaknesses of St. Anthonys College canteen are related with both positive and negative advantage on its operation. The main strength of canteen is that it has a captive market. Its main customers are the high school students. This

segment has a population of seven hundred and belongs on above average income group. Previous survey that was conducted showed that the group has a per capita allowance of P70 pesos. This could mean that there is approximately a daily buying capacity of P50,000 that is available to the market. If a large percentage of this amount is captured by St. Anthonys College canteen then the operation of the canteen has a high degree of sustainability. However, though this market is large, there are some constraints that have to be answered. Since the high school students have only twenty minutes break in a form of recess time, the sudden influx of demand in the canteen is not totally answered. Even if 30% of the market is captured which is equivalent to serving 200 students in twenty minutes, providing their needs within twenty minutes is very difficult. This problem is also encountered during lunch time of which an hour is only available for the break. With the influx of more customers, the space and the personnel needed to serve the group is limited. This resulted in almost fifty percent going to other food establishment to serve their needs. The area is quite close to the main target market. However, the space is not available to serve all of them. This is especially, during class lunch time of which occupation of tables are demanded. The sitting capacity is less than fifty customers and the area will be crowded lowering the quality of ambiance of the surrounding. Another strength of the canteen is that it is periodically audit and monitored by finance office for its financial conditions. This is very important in terms of financial controls, inventory management and other related concerns on the financial aspects. However, too much controls will render a less than effective operations since request of payments, liquidations and other financial reports are time consuming on the part of the manager to prepare.

Another issue to be solved is the compensation of the employees. Given that the employees are outsourced, the salary and compensation given to them is still relatively high compared to the competition. The outside competition are generally operated by a family business of which salary paid to their own workers are considerable less than that of the St Anthonys Canteen. This result in higher mark up sale which the customers felt resulting to some of them patronizing the competitors. Another strength of the canteen, is that it has stronger relationship with its customers. Canteen employees know personally the customers with most of them developing some familiarity with the students and parents. This further strengthens the loyalty of customers to the canteen.

External Environment The external environment is slightly not favorable to the canteen. Outside the campus are lots of business food establishments which offered a wider range of products that can cater better to the taste of the students. Prices also varied depending and can answer the buying capacity of the students. This establishment also has wider range of customer type since it is located outside the school. However, the school canteen can niche with other units of the St Anthonys College community. The school offered different services of which food services are demanded. Celebrations and gatherings, small group meetings, seminars and workshop trainings from time to time are conducted. The school canteen is conveniently positioned to answer the needed services in terms of food to be provided in these events. Another opportunity is that the Canteen can use leverage of captive market in getting a more advantageous contract for exclusivity of

products to be sold. Softdrinks companies compete with one another in order to get the market available for the canteen. The Canteen can make use of this advantage and further increase the income by properly selecting the best offer.

The Four Ps of Marketing To further analyze the competitive edge of St Anthonys College, the following parameters will be discussed and how it can be improved for further expansion and development of its market.

1. Product The main product of the Canteen can be divided into two, namely, prepared food and consigned food. Prepared food are those that are directly cook and prepared by canteen staff for sale. Consigned food are those food prepared by outside group and are generally consigned.

The Prepared Food Prepared food followed more rigid specifications which are subject to daily menu that was made, sanitation and availability of local supplies. The main preparations are those of viands and food for snacks. Viands are based on the availability and demand of the market. Students preferred meat products while teachers and personnel preferred nonmeat products like fish and vegetables for health reasons. Meat products are solely beef, chicken and pork. Six different viands are prepared every day. Two of these are provided

in a daily basis while two are offered once every two weeks. The other two is prepared from time to time depending on the availability of supply and season. Different type of fish as an example is available depending on the season in which they will become available. Beef because of its price is limited and the amount of servings available is controlled. For snacks, soups and sweets are also offered. However, the amount to be prepared and sold is limited to avoid excess and spoilage. There is also a issue of taste and preference of customers. Young students preferred more the fried or grilled meat while matured personnel prefer fish with some of them have health problems. This conflict of preference is difficult to answer which result on some of the customers preferring to eat somewhere else. Consigned Food- consigned food are those foods sold not prepared by canteen and come from outside either from local people or companies that provide them. They are sold in a consigned basis. The local suppliers provided native dishes daily and is only limited. No viands were supplied. It is only the canteen cook that prepared them. However, it is seen that profit for consigned foods is relatively small and is not reliable since the consignors have no obligation to provide foods in a regular manner. Companies provided food items that are already packaged and ready for distribution. The health benefits of each product were scrutinized by the canteen manager before approval for display is given. They are generally known as junk food and have lower health benefits but are currently the most saleable item in the canteen. It is also to be mentioned here that there is the required label for each product that must be met before it is sold as required by Department of Education and Department of Health.

These foods generally have longer shelf life and can be kept for relatively longer span of time. There are also different biscuits and carbohydrates rich snacks that are available to the canteen.

Drinks

Aside from soft drinks that are sold in the canteen, there are also other health drinks that are available. Coffee and tea are also available for those customers that want hot drinks. Mineral water is supplied locally since the school has its own water purification system and bottled its own water product. The school had opted to be exclusive on one soft drink company of which the mentioned company provided incentives in forms of cash, discounts and rebates. However, hot drinks like different types of coffees, teas and the like are limited. Cold products like ice cream and other is also limitedly offered and from time to time are not available.

2. Pricing

The pricing of the products as a business rule has a 20% mark up sales. Considering that labor is more costly compared to the outside competition, pricing of viands is relatively higher. A viand serving range from 20 to 35 depending on the price of supply. Generally meat viands are between P20 to P25 per serve while fish servings are

from P25 to P30. Vegetable servings from P15 to P20. Soup serving is fixed at P15 pesos. A cup of rice is P8 pesos with option for half serving. Soft drinks generally are given a price of P11 per bottle. Energy drinks are generally above P20. It can be seen here that pricing is competitive and with in the acceptable level of price differentiation. Junk food prices ranged from P6 to P12 depending on the size and brand. Though the market is captive, pricing for the food being offered is still regulated following the business rule of 20% mark up. However, the price of the prepared food is still higher because of higher cost of goods which is contributed by high cost of labor. Another pricing advantage of the canteen is that it can offer credits to the personnel of the school. School personnel can order food in credit and the payment will be collected in the form of salary deduction every 15th and end of the month.

3. Placement

The canteen is strategically located in the campus. Its main advantage is it is quite close the target market which is the high school students. It is also located in which security can be immediately be provided since the guards are in the 24/7 duties. However, its main problem is that the space is limited. It has only a sitting capacity of less than fifty students. This result in making the students bring the food outside the canteen. It can only serve foods in plates in a limited capacity. Thus, soups, rice and viands are served for only the first fifty customers with the rest having takeout orders. There is also a problem

of limited serving time for high school students. Recess for these students is only in the morning. Almost fifty percent of the sales are derived in recess time.

4. Promotion

St. Anthonys College canteen offered a limited promotion in terms of discount and price reduction. It can only offer salary deduction for school personnel who wants to avail of the services. Promotion of different product mixed like combo meals have lukewarm support and was stopped because of absence of customers who want to have it.

Conclusion and Synthesis

Based on the discussions that were provided it can be seen that the main objectives of the canteen were met. However, the profit is not fully maximized in terms of optimizing the operations because of some high cost of labor compared to its outside competition. However, with the internal strength like captive market and niching within the existing units which can serve as an internal control the running of canteen can be more profitable. It is also expected that as time goes by with the operations being continuously refine bigger profitability can be attained. It is also subject to some external threats like decrease in enrollment which will clearly lowered its sales. There are also some aspects of canteen that can be improved like expanding its services

for college students and if possible to the outside community. At the moment, considering its limited capitalization and work force it can only provide the needed service for the given target market. It is also seen here that expansion can benefit the canteen removing its dependence on seasonal trends and peak periods.

Plan of Action

Based on the conclusions and synthesis the following plan of actions to answer the items given on the SWOT analysis:

1. Market Expansion

a. In order to answer the demand on peak periods it is planned that movable kiosks and other related structures be made. The idea of kiosks is that it can serve more students during recess time and will decongest the canteen. Small branches manned by two employees hired in a part time basis based on peak period can answer the labor and work requirements. It is also recommended that these branches shall be put up farther from the canteen to avoid bottleneck during recess and lunch. b. There must also be increased in product line. Meat and poultry products can be sold to the personnel in a regular basis in a salary deduction scheme. Rice and other basic needs like sugar and other grocery items can also be sold using the same payment

scheme. The more expanded the product line the bigger is the sales volume resulting in the increase in profit. c. Offering of breakfast. Serving time can be made by 6:30 am of which breakfast can be served. It is seen and observed that some students failed to take their breakfast and will take their breakfast at school. If this is the case the earlier the canteen can operate the more customers it can accommodate. Even personnel who are to report earlier can have their breakfast at school following the salary deduction scheme. d. Stronger ordering system in order to operate properly during lunch time, a canteen employee can take immediately an order for takeout food. It is more efficient if forms for ordering are available so that they can immediately provide the take out food without clogging the counter during peak time. e. Stronger connection with parents. There must a regular consultation with the parents regarding students food preference. It is also possible that an agreement regarding payment scheme for students in a monthly basis or other schedules can be devised. This will reduce bottleneck in the cashier which lessen the delivery of services.

Operations

The following are plan of action for the improved in operations and cooperations among the controlling units. 1. Re-assessment of job functions and tasks for the employees with priorities given during peak time to increase sales volume. Sales is the heart and blood of

business. It is one of the indicators of whether the business is profitable or not. All resources of the canteen must be channeled towards increase in sales at limited operational cost. Given that the demands must be answered during peak period, the canteen manager should see to it that sales must be maximized during sales period. 2. Assessment of students behavior and preference. It is expected that from time to time customers demand and preference vary. Even waiting time and queueing process must be studied in order that expectations of the customers are met. There are some students that are impatient upon seeing long queues and lines resulting in the loss of customers. 3. As much as possible, controls should be minimized in order that smooth operation is attained. Too much control and report preparation will tie up the operation manager to the detriment of the delivery of services. Consultation with the audit group shall be done in order that some controls are only placed when clearly needed. 4. Periodic assessment of outside competitions must be done. Since this is one of the threats that are mentioned, assessment of how do they performed compared to that of canteen must be done. Price adjustments, promotions and other actions can be done to arrest this threat. 5. Strengthening of leverage with the suppliers. Since the canteen have a leverage of captive market, its business unit must further analyzed on how this leverage can be used for the full advantage of the canteen. More companies must be invited for

bidding of supplies like softdrinks, condiments and the like in order that better price discount, payment scheme and other promotion can be availed.

Image and Repackaging as a Unit

It is seen here that no discussion was made regarding perceptions of customers. Image is important in business. An aura of reliability, industry and other positive characteristics of canteen shall be exhibited by its workforce. A wholesome perception and image of the unit must from time to time be assessed. The image itself once become favorable can trickle down to customer loyalty, preference and other parameters that can indirectly be connected to increase in sales. Improvement on its ambiance, sanitation and cleanliness must be done. Stronger work attitudes with focus on customer satisfaction must be provided in the training of its employees. A wholesome atmosphere with happy and lively countenance for its workers must always be emphasized. At the end of the day the customer is always right and the workers exists because there are customers.