SG7001 Managing Strategy, Operations and Partnerships: Leon restaurant Assessment 1 Answer
MANAGING STRATEGY, OPERATIONS AND PARTNERSHIPS SG7001
The primary objective of the report is highlighting the various factors providing a competitive edge to the Leon restaurant in the competitive market. The restaurant had its origination in the year 2004 at the UK by John Vincent, Allegra McEvedy and Henry Dimbleby. On an early note. Leon restaurant has its locations at the Carnaby Streets, however, after getting consumer acceptance the company opened 60 outlets across the globe. For addressing the consumer interest more specifically, the company aims at preparing green menu comprising of seasonal vegetables comprising of more seasonal vegetables as the main motto of the company is to produce sustainable foods having a less environmental impact. In this context, a foreign chain of restaurant, Motorway café has opened their outlet nearby to the restaurant, serving similar food products. However, since they are undercutting the prices, the food quality is automatically getting hampered, thus affecting brand identity. In this context, the study would critically evaluate the success factors of Leon restaurant and conduct an in-depth analysis of Motorway café for addressing their issues in the competitive market.
The assignment will take active participation in evaluating the environmental factors and its impact on the business operation of the Leon restaurant. The assignment would seek a deep insight towards the rising trends of the hospitality sectors for determining areas of futuristic scope. The strategic approach of the company will be evaluated by addressing the resource, capabilities and competency of the firm over its rival brands. The operational management of the company will also be discussed critically for determining the reason for competitive success.
2.0 Critically evaluating the industrial environment where Leon restaurant is operating
2.1 Conducting Pestle Analysis
The conduction of Pestle Analysis would be detaining the external factors influencing the business operations of the Leon restaurant. Please check Appendix1 evaluating Pestle analysis.
While referring to the analysis, it can be stated that the negotiation aspects associated with BREXIT are affecting the political and financial stabilisation of the organisation. Increased rate of inflation is, however, beneficial for the success of the restaurant. Owing to the slower rising of the rates of income, the overall disposable income of the consumers has become automatically low, thus becoming choosier about purchasing products. In this context, it could be stated that Motorway café will be struggling a lot as their product quality is low, and consumers will not at all be interested in spending on purchasing their food items, which is not the case with Leon restaurant. However, the preferences of the consumers are changing and they are preferring nutritious and healthy food products like that of Leon restaurant. Furthermore, the up-gradation of technological advancement will be attracting tech-savvy consumers. Additionally, both Motorway café and Leon restaurant should be complying with the regulations associated with Waste Disposal for maintaining environmental sustainability.
2.2 Emerging Megatrends and trade trends for the restaurant
Over the years, the restaurant industry is expanding at an alarming rate. In this context, it can be stated that trends of online ordering have increased rapidly, which is working in tandem with a physical visit to restaurants by the consumers. Therefore, both the restaurants need to focus on managing their online presence for attracting consumers. There is an estimation that the restaurants are accounting nearly $32 and $13 billion respectively from the presence of third-party services. Hosting off the beat type of experiences has been in demand over the years, where exclusive menu list is on offer. Owing to the advancement of medical facilities and treatment methods available, the consumers are willing to visit the restaurant more often.
In this context, the restaurant has to take active participation in considering the menu for both the young and old age population. Another aspect why consumers are preferring healthy products is that instances of fatty liver, digestion problems, diabetes and high cholesterol have enhanced at an alarming rate. Owing to the rapid occurrence of Diabetes in the UK market, the government is keen on considering reduced-sugar products. The restaurants have already started reformulating their menu owing to the high imposition of taxes on excess inclusion of sugar in foods.
2.3 Porter’s Five Forces
Please check Appendix 2 for analysis of Porter’s Five Forces
From the analysis of Porter's five forces, it can be assumed that threats coming from the news companies are considerably high, which is increasing the buyer power of the consumers. Contrastingly, the bargaining power of the suppliers is considerably low for both restaurants. In the case of Motorway café, the threat of substitute is considerably high owing to poor maintenance of quality in their products. In the case of Leon restaurant threat of substitution is minimal, however, the company will be facing rivalry from existing brands. In this context, both the companies should innovate their product and services as per the altering consumer preferences accordingly. The aspect of Market Skimming will help Leon restaurant to maintain competitive upper hand and Motorway Café can also follow the footsteps of their successful rivals for overcoming the productivity woes.
2.4 Environment of the Industry
2.4.1 Successful factors influencing the industry
The restaurant industry is expanding at an alarming rate. Individuals often purchase fast foods owing to variable working hours, erratic lifestyle, attending parties for spending leisure times and appetite for tasting different types of foods. In this process, the companies are continuously innovating their products and services for addressing the anticipated expectations of the consumers. While the UK is facing economic crunch and political instability, the restaurant visiting consumers have enhanced over the years. The consumers are more conscious about their health and therefore, organic and nutritious food products are given first priority. While Leon restaurant has addressed the industry needs successfully, Motorway café has received criticism for selling low foods, irrespective of promising to sell healthy products.
2.4.2 Impact of megatrends on the environment of the industry
In regards to the hospitality sector, the megatrends suggest that organic food products are adding to the health quotient of the consumers. Due to rising health concerns in individuals, a healthy food service assists in keeping an individual fit as well as relieve the taste buds. With the production of tasty and nutritious products, consumers of all ages are getting attracted to either order online or visiting restaurants at regular intervals. Owing to the rising demand for online ordering due to discounts available, the restaurant industry has experienced a significant leap in enhancing the overall economic productivity. However, reviews are also important in online ordering and due to poor product quality, negative reviews are affecting the brand image of Motorway café, whereas reviews are working in positive favour of the Leon restaurant.
3.0 Critical Strategic application of the Leon restaurant
3.1 Organisational resources
The organisational resources comprise of tangible and non-tangible resources which are illustrated below:
3.1.1 Tangible resources
Resources which are tangible by nature are subjected to the physical acquisitions from the organisational perspectives, starting from the property handling, revenue earning and usage of machiner. The tangible resources utilised in both the restaurants comprise of the furniture, crockeries and decors used for infrastructure, funding and raw materials needed for the preparation of foods. Additionally, in the case of Leon, the company has its own vegetable production for maintaining the quality of its food products. Leon restaurant generates revenues approximately at the rate of $30M and the company has 167 employees in total with its headquarters situated in the city of London, UK.
3.1.2 Intangible Resources
The brand image, credibility aspects, public image, patents and employee excellence are regarded as some of the aspects of intangible resources. Since Leon restaurant has its own vegetable and plant production, it monitors food quality strictly, therefore, earning goodwill and trust amongst the consumers. In contrast, instead of undercutting prices, low product quality of Motorway Café is affecting the brand image and its credibility is being questioned.
3.2 Organisational Capabilities
Organisational capability refers to the ability of an individual to get competitive supremacy over its rivals. The Leon restaurant takes active participation in promoting a healthy working culture giving equal opportunities to all. Wing Tsun and fitness centre has been created for the welfare of the employees. The company takes the initiative of using reusable products for attaining environmental sustainability. Due to the confidence, the consumer has in its food products, the company has been able to generate a positive image in the organisational context. Furthermore, the company has expanded its outlets in the global market, which is not the case with Motorway Café. The company is struggling in the domestic market itself, so it needs to improve its product quality for expanding into the international market in future.
3.3 VRIN Framework concerning the resource and capabilities
|Brand identity||Leon restaurant has a positive brand image due to its proactive working culture and service excellence||The particular aspect is not rare as any eminent company emphasizes a productive work culture and strong service quality||The specific aspect is imitable by nature es effective customer service and training of the employees for attaining success is the primary motive of any company within the hospitality sector,||The brand identity of the company cannot be substituted because it has a global presence and consumers trust the brand|
|Healthy and organic food production||It is a critical success factor aspect as consumers always prefer healthy as well as tasty foods offered by Leon restaurant.||It is a rare combination because not only the company takes active participation in producing healthy fast food, but it also has its own vegetable and plant production, probing for environmental sustainability||The specific aspect is difficult to imitate as companies selling health products rarely have their own raw material production unit||The healthy production of foods from perspective of Leon is happening for quite some time and therefore, it's difficult to substitute, as this is one of the most effective ways of producing organic and healthy food products.|
3.4 Comparison of the resources and capabilities with the megatrends
One of the key aspects is that Leon restaurant has been successful in improvising its presence along with current market trends, which is not the case with Motorway café. The product quality of Motorway Café is Questionable, whereas Leon has its own production without any involvement of artificial preservatives and pesticides. The trend of purchasing eating foods in the form of medicine is a trend which aligns with the healthy production of foods. Another interesting perspective is that, due to the busy lifestyle, customers have to consume fast foods, however, if the offerings are healthy it will automatically lure consumers.
4.0 Critically evaluating operational aspect of Leon restaurant
4.1 Operational management at the restaurant
The operational management is very much keen on the Leon restaurant. For maintaining high-quality product offerings, certain raw materials are being produced within the organisation itself. While some of the raw materials are taken from the suppliers, consistent standardisations are met so that the overall quality is not hampered. The quality analyst ensures all ingredients of food and utensils are washed cleanly before delivering it to the final consumers. The packaging of products is also done with proper care. However, in the case of Motorway Café, quality management is lenient and more priority is given on undercutting pricing, rather maintaining food quality and hygiene.
4.2 Referring to the company vision
While aligning with the company vision, it can be estimated that many companies are successful in providing tasty foods at cost-effective rates, however, it lacks healthy quotient. Some companies like Motorway Café compromise with its product quality while undercutting prices. However, Leon restaurant takes active participation in producing healthy as well as tasty food products.
4.3 Assisting Delivery of vision
While probing for the company vision, it can be stated that the company looks for serving fresh vegetables and high-quality meat. The framing of the fishes is hand made and the company emphasizes on preparing plant vase dishes. The pork used has its certification from the RSCPA, thus ensuring premium quality. Regular visits are initiated at chicken farms for checking the health status of chicken, thus ensuring food products are not hampered. As far as the Motorway café is concerned, the company sells typical fast foods at cheap rates, which are not enjoyed by all section of consumers. The primary motive is profit generation, which is getting hampered owing to rising consumer complaints.
4.4 Operational Sustainability
The operational management of Leon restaurant is triggered by Green energy which comprises of Hydro, solar, wind and anaerobic digestions. Reusable products and less plastic usage allow the company to attain environmental sustainability. Depending on the weather forecasting, the company probes for preparing fresh foods.
While summarising, it can be estimated that Leon Restaurant gains competitive supremacy as it has consumer faith on their side due to healthy food offerings. However, Motorway café has received criticisms for offering low quality and less hygienic food products due to undercutting of price. Irrespective of having own vegetable production, quality analyst and strong brand identity, the company is facing few constraints due to poor financial and political scenario of UK. However, owing to its competency and global presence, Lean restaurants can outperform its competitors in the competitive market.