Sample Business Studies Essays on Evaluating Fast-Food Restaurant

The fast-food restaurant industry is very competitive. Competition in this type of business can either be direct or indirect. A direct competitor is defined as any restaurant which offers a similar menu, shares the same target market; prices fall within the same range and share the same theme. On the other hand, indirect competition entails any establishment that has the potential of snatching a restaurant’s customers. For instance, a bar, movie theatre, and a supermarket located within proximity of a restaurant may offer substitutes to foods offered in a restaurant. Gaining a competitive edge over existing restaurants and other indirect competitors require a detailed analysis of demographics in the surrounding area. This report presents a comprehensive observation and recommendations on how our new restaurant can provide superior services than the existing restaurant businesses in the target area, hence competing favorably.

Summary of Observations and Background of the Competitors

The observation period lasted for three weeks, with each visit lasting for fifteen minutes. In the first and third weeks, we visited each restaurant three times. In the second week, the observation was only made two times a week for each restaurant. The choice of restaurants deemed as competitors was informed by the distance from the preferred location to our business. Typically, these restaurants were located within 15 minutes’ drive. The two restaurants observed, and which we deem as posing the highest level of competition are McDonalds and Wendy’s. Key parameters observed during the period included the general appearance of the restaurant, order turn around period, quality of food and service, and customer traffic.

McDonald’s is one of the leading brands in the world of fast-food business. It operates in more than 100 countries. The company competes based on flavor, prices, customer convenience, and quality (David & David, 2019). In terms of appearance, the restaurant was generally clean, with three public area attendants in sight during all three visits. However, customer it took an average of five minutes before a table could be cleared once customers finish taking their food. Within the three trips, four customers raised complaints about food quality and service. Data observed over the three weeks is summarized below;

First Week Second Week Third week
Number of Customers          42.0              38.0           52.0
Average waiting time for an Order            5.0                4.0             6.0
Average waiting time before placing an order            2.0                1.5             3.0

 

Wendy’s restaurant is known for its square hamburgers, signature frosty, and sea salt fries. It is regarded as the world’s third-largest hamburger fast food restaurant in the world (Jones, Harrison & Felps, 2018). During the period of observation, the appearance of the restaurant was generally clean and attractive. During one of the visits, there was a commotion where customers complaining that their orders were taking long to be processed. Data observed over the three weeks is summarized below;

First week Second week Third week
Number of Customers 34.0 39.0 31.0
Average waiting time for an Order 6.0 7.0 5.0
Average waiting time before placing an order 1.5 3.0 2.0

 

A summary of the comparison between the two restaurants is as presented below;

Recommendations

Following the observations taken during the three weeks, there is a significant gap in service delivery that our new restaurant can turn to account. Typically, for our business to thrive in the area, it will be crucial to capitalize on the weaknesses of the existing businesses. Additionally, it will also be imperative to utilize current and new technologies to offer customer-focused services that create value for money. Some critical recommendations that our new outlet can focus on as a way of beating the competition in the area include the following;

Right pricing of the menu; in a restaurant, the menu is the most powerful tool. A well designed and priced menu can give a fast-food restaurant a competitive edge, thus, increasing its profits by 10-15 %.  For our new restaurant, it would be essential to price slightly below our competitors as a market penetration strategy. However, for star items that we offer, we will price slightly above competitors to stamp the superiority in quality of service.

Handling of customer complaints; coupled with better valuing of customer feedback, handling customer complaints faster, and with dignity, can create a sense of customer loyalty (Jogaratnam, 2017). As observed during our visits to our key competitors, not handling customer complaints can be detrimental to a fast-food restaurant’s brand. Our restaurant should create a qualified team focusing on the handling of customer complaints.

Implementing Short Order-turnaround Time; the length of time spent in placing and waiting for orders can be a game-changer in the fast-food restaurant business (Namada, 2018). In order to beat our competitors, it would be essential to set at least one and a half (1.5) minutes as the average time customers have to wait before their orders are taken. Additionally, the maximum order waiting time should be set at 3 minutes.

Creating a superior outward and interior appearance; Customers are happy spending their meals in an attractive place. We can gain a competitive advantage by using technology to customize our appearance to create a touch of classy yet affordable ‘local hood,’ thus, attracting a vast number of customers (Somphanpae & Boonsiri, 2016).  Achieving this will require investing in mix right colors, classic windows and doors, and proper lighting.

In conclusion, there is tremendous hope for our new restaurant to gain a competitive advantage over the existing food chain businesses in our target area. By taking into consideration the recommendations provided in this report, our business can build on customer experience through improved service delivery, superior Menu, competitive pricing, and general attractiveness.

References

David, F. R., & David, F. R. (2019). Strategic management: A competitive advantage approach, concepts and cases. Pearson.

Jogaratnam, G. (2017). How organizational culture influences market orientation and business performance in the restaurant industry. Journal of Hospitality and Tourism Management31, 211-219.

Jones, T. M., Harrison, J. S., & Felps, W. (2018). How applying instrumental stakeholder theory can provide sustainable competitive advantage. Academy of Management Review43(3), 371-391.

Namada, J. M. (2018). Organizational learning and competitive advantage. In Handbook of Research on Knowledge Management for Contemporary Business Environments (pp. 86-104). IGI Global.

Somphanpae, S., & Boonsiri, S. (2016). Business Process Improvement Using Adjustable Parameters on Simulation–A Case Study in Restaurant Business. Journal of Advances in Information Technology Vol7(4).