HIDALGO RESTURANT, INC: SUCCEEDING AS AN

ENTREPRENEUR
I. VISION

A. Vision Statement

“For everyone who works with us to discover in themselves their talent and their
potential and to build relationship with each other”

B. Comments

Vision statements should answer the question “What do we want to become.” But
Hidalgo’s vision statement does not answer that question. It doesn’t even mention
what kind of business they are into.

C. Proposed Vision Statement

To be the preferred restaurant of Filipinos and expatriates, providing total customer

satisfaction through quality, service, cleanliness, and value.

II. MISSION

A. Mission Statement

Hidalgo Restaurant, Inc. doesn’t have specific mission statement

B. Comments

A Mission Statement reflects the company’s core purpose, identity, values and
principle business aims. A Mission is defined as 'Purpose, reason for being'. Defined
simply "Who we are and what we do."

Mission statements should possess nine (9) components which are (1) customers,
(2) products or services (3) markets, (4) technology, (5) Concern for survival,
growth, and profitability, (6) philosophy, (7) self - concept, (8) concern for public
image, and (9) concern for employees.

C. Proposed Mission Statement

We are committed to provide total customer satisfaction and exceed customer’s

expectations through setting the trend in raising the bar, to be the change agents
contributing directly to the country’s development, creating standards of excellence
which every Filipino may aspire, to be in the business of building relationships and
partnerships, among which one partner is the customer, in order to maximize
earnings that will benefit our supplier, employees, and investors.

III. EXTERNAL ENVIRONMENT ANALYSIS

The restaurant sub-sector includes places that serve food and drinks, be it self-
service or full-service. This covers a range of services including fine dining specialty
restaurants, fast food outlets, canteens, and food courts. In terms of its contribution
to the national economy, the hotel and restaurant industry accounted for 1.35% of
Philippines’ 1998 gross domestic product (PHP12 billion in GVA compared to the
Philippine’s PHP889 billion GDP during the period) and 1.28% of its national product
(PHP12 billion in GVA compared to the PHP931 billion GNP). Moreover, the hotel and
restaurant industry employed about 1% (282,142) of the country’s 31,278,000 labor
force during the same period. Meanwhile, the National Statistics Office (NSO) in
1994, classified 46,930 firms as belonging to the hotel and restaurant industry,
employing a total of 221,954 people. At the time, each peso investment in labor
contributed PHP4.40 to the industry’s total output while each peso investment
yielded a PHP1.27 contribution to the same.

A. Economic Forces

Restaurant patrons cross all economic groups. Fast foods and food courts cater to
all income classes. Specialty fine dining restaurants, generally target the A, B, and C
crowd. The proliferation of one-stop shopping malls that offer various recreational
facilities and amenities is also an important growth factor. The heavy pedestrian
traffic that the malls attract means big business for the restaurant industry,
particularly the fast food sub-sector. Moreover, these malls spare the restaurant
industry from spending extensive business development studies for their outlets;
mall magnates Henry Sy and John Gokongwei Jr. have established formidable track
records in building malls. Finally, Filipino communities abroad are strong basis for
the export of local restaurants and fast food technology. The presence of Goldilocks,
Jollibee, Max, Red Ribbon, and Barrio Fiesta, among others, in the US, for example,
is a result of demand from Filipino migrants longing for a taste for home.

B. Social, Cultural, and Demographic Forces

The urban population to which restaurants cater is largely made up of young people
who have higher disposable incomes and who are more likely to experiment with
different cuisine. Brand loyalty is particularly strong in the fast food sub-sector of
the restaurant industry. Jollibee patrons, for example, generally stay loyal to the
franchise regardless of price increases. Demand for dining out is associated with
both the ever-expanding options available, and also with the number one reason
most consumers use restaurants: they provide a convenient, reasonably priced
experience that offers better flavors and taste sensations than consumers can get
at home. This has become particularly critical at a time when more and more
women are entering the workforce and consequently have less time to prepare
meals at home. Moreover, the Philippine population is youth-oriented. Almost half of
the estimated 75 million Filipinos are below 18. And since a large proportion of fast
food consumers is between the ages of 16-24, the annual 2.3% population growth
rate guarantees market growth for the sub-sector.

C. Political, Legal, and Governmental Forces

Strong support of industry associations and trade unions (i.e., Hotel and Restaurant
Association of the Philippines and the NWHUAI) enable the hotel industry, among
other things, to undertake programs and projects that upgrade and professionalize
the sector and to influence government regulatory policies/laws/rules affecting the
industry.

D. Technological Forces

International food chains and franchises facilitate transfer of technology in the local
restaurant sub-sector. They provide training of potential employees and employ
strict quality control systems.
In terms of availability of technology, the Philippine market is highly competitive
with numerous products and brands offered at reasonable prices, and, therefore,
allowing restaurant owners the luxury of choosing the type of technology that best
suit their operations. Equipment purchasing decisions depend on the type of end-
user. For instance, local single-unit restaurants need inexpensive equipment, so
price is the main guiding factor. On the other hand, fine dining restaurants are
willing to pay a premium for high quality, durability, after-sales service, cost
effectiveness, reputable supplier and fast delivery. Restaurant owners regularly
participate in local and international equipment trade fairs, allowing them access to
the latest hotel equipment technology.

E. Competitive Forces

There are about 45,220 restaurant establishments in the domestic economy and
about 80% of them belong to the fast food sub-sector. Food franchising is extremely
popular. There are 1,057 franchised quick serve restaurants, 14 casual dining and
theme restaurants, and 507 coffee shops, bakeries, and confectioneries.

The industry in which the restaurant and fast food firms operate has increasing
consumer demand for every improving product. The growth is proven by the rapid
expansion of food outlets in key areas in Metro Manila and the provinces. The
popularity of fast food establishments came in the 1980’s, and over the last years,
the industry has consistently posted double-digit growth rates.
Competition is fierce in the restaurant industry, particularly the fast food sub-sector.
The market is large but consumers are price conscious and exhibit brand loyalty.
With a wide range of restaurants and fast food establishments to choose from,
pricing schemes and marketing strategies determine market shares. Market
strategies of industry players, therefore, aim to achieve two primary objectives: 1)
hammer in “value-for-money” concepts; and 2) create brand consciousness and
loyalty.
Market shares in the restaurants are won or lost in pricing. Industry players
regularly offer price cuts and discounts to lure in new customers. Moreover, major
players invest heavily in advertising to create brand consciousness and loyalty.
Marketing strategies include raffle draws, free gift items and specially prized meal
combinations, discounted toys and school items for every certain minimum food
purchase. Celebrity endorsements are used in the hopes that the market will
identify with the endorser. Likewise, intense competition urges players to come up
with new products to capture bigger market shares. Restauranteurs have to be keen
at finding the latest food and wine concoctions here and abroad and adapting them
to local taste. Targeting the Filipino’s tastebuds, several fastfood chains that usually
serve only western food have introduced items that appeal to the local market’s
palate.

Raising quality standards and improving service have also been focal points of
competition, particularly in the fast food sub-sector. Players give incentives and
compensations to motivate employees to be efficient on their jobs and thus help
maintain the fast food outlet’s high standards of quality service and cleanliness.
Also, a major importance in a fast food and restaurant is courteous and friendly
personnel. Not surprisingly, speedy service is among the more salient attributes
people would highly expect from a fast food restaurant.

F. Company’s Opportunities and Threats

1. Opportunities
• Innovating the best Filipino and European Cuisine
• Increasing demand of dining or eating out
• Department of Tourism’s projects and programs to attract tourists
will expand the hotel and restaurant industry
• Restaurant patrons cross all economic groups
• Strong support of industry associations and trade unions (i.e., Hotel
and Restaurant Association of the Philippines and the NWHUAI)

2. Threats
• Restaurant patronage/sales are dependent on the levels of economic
activity and real income of local residents and tourists
• Increased competition in restaurant sectors and consumers exhibit
brand loyalty
• Competition with fast-food chains
• Restaurant business involves perishable goods which have to be
disposed of at the earliest possible time
• Political instability, resulting in economic slowdown, reduces real
income as well as the demand for restaurant services.

G. External Factor Evaluation Matrix

Weighted
Key External Factors Weight Rating
Score
Opportunities
 1. Innovating the best Filipino and European
Cuisine 0.10 4 0.40
2. Increasing demand of dining or eating out 0.08 4 0.32
3. Department of Tourism’s projects and
programs to attract tourists will expand the
hotel and restaurant industry 0.12 4 0.48
4. Restaurant patrons cross all economic
groups 0.08 3 0.24
5. Strong support of industry associations and
trade unions (i.e., Hotel and Restaurant
Association of the Philippines and the NWHUAI) 0.12 4 0.48

Threats
6. Restaurant patronage/sales are dependent
on the levels of economic activity and real
income of local residents and tourists 0.12 4 0.48
7. Increased competition in restaurant sectors
and consumers exhibit brand loyalty 0.10 4 0.40
8. Competition with fast-food chains 0.10 4 0.40
9. Restaurant business involves perishable
goods which have to be disposed of at the
earliest possible time 0.08 3 0.24
10. Political instability, resulting in economic
slowdown, reduces real income as well as the
demand for restaurant services. 0.10 3 0.30
1.00 3.74

IV. INTERNAL ENVIRONMENT ANALYSIS

A. Company Strengths and Weaknesses

1. Strengths

• Founder’s management skills, capabilities, and interest

• High quality of products in affordable price

• Restaurant’s ambiance, portion size, and consistency

• Establishment of Hidalgo was preceded by intensified study of the target market

 2. Weaknesses

• Constant turnover of kitchen personnel

• Filipino market doesn’t understand well the French cuisine

B. Internal Factor Evaluation Matrix

Weight
Weig Ratin
Key External Factors ed
ht g
Score
Strengths
1. Founder’s management skills, capabilities, and
interest 0.20 4 0.80
2. High quality of products in affordable price 0.20 4 0.80
3. Restaurant’s ambiance, portion size, and
consistency 0.20 4 0.80
4. Establishment of Hidalgo was preceded by
intensified study of the target market 0.10 3 0.30

Weaknesses
5. Constant turnover of kitchen personnel 0.20 4 0.80
6. Filipino market doesn’t understand well the French
cuisine 0.10 4 0.40
1.00 3.90

V. OBJECTIVES, STRATEGIES AND ACTION PLAN

A. Objectives

• To bring foreign visitors to dine on Filipino cuisine

• To reduce employee turnover rate

• To compete well in Makati to prove the ability to compete in other

locations

B. Strategies
 • Support sustainable tourism programs in the Philippines

• Develop new recipe and food variants that could suit the taste of foreign
visitors (e.g., mixing and matching Filipino and European cuisine)

• Create company policy on hiring, provide training and development,

career advancement

• Create intensive marketing strategy

C. Action Plan

Activity Responsibility Time Element

Corporate
Coordination with the Department of Planning &
Tourism in the involvement and Marketing
support on tourism programs Department regular/continuous
R & D and
Research and market study on food Marketing
preference of foreign visitors Department 3 months
Creation, preparation of policy Top Management
manual and HRM 3 months