Strategy, operations and partnerships all are three important elements of business which play essential role within working of an company. Strategy is the action which manager take within organisation for accomplishing predetermined goals and objectives. In addition to this, operation is activity of an firm in which they are engaged for converting material within finished products and sell them to customers for generating revenue (Meredith and Shafer, 2019). This report is based on Leon's restaurant which is fast food restaurant chain based in United Kingdom. It was founded in 2004 by John Vincent, Henry Dimbleby and Allegra McEvedy. Headquarter of Leon's restaurant is located at London, United Kingdom and area served by them are UK, Ireland, Netherlands, Norway, Spain as well as United States. Vision of Leon restaurant is to make easy for everyone to eat good food. This report will going to cover PESTEL analysis of respective restaurant and review emerging trends. Along with this, implement porters five force model for gaining competitive advantages. Moreover, resources, capabilities will identify as well as evaluate through VRIN model.
Critical evaluation of environment in which Leon's restaurant operates
PEST analysis – It stands for political, economic, social and technological. PEST analysis is the best tool which help in finding out opportunities as well as threats within external business environment. Explanation of this in relation of Leon Restaurant are as follows :-
- Political – UK and USA both are still going through political changes because of recent elections with both nations as well as Brexit process in UK. Such practices result in uncertainty related to trade agreements and market (Zahari and Romli, 2019). So it is essential for Leon's Restaurant to include each and every political factor within their working while designing any strategy or policy.
- Economic – This factor have wide impact on working of organisation as economic recession result in reducing revenues and profit of company at broad level. Thus, it is essential for Leon's restaurant to focus on economic factors because it have wide impact on working of company (Gray and et. al., 2020).
- Social – This factor have wide impact on working of Leon's Restaurant because it influence behaviour of consumers which have wide impact on remote or macro-environment factor of company in relation of revenue. There are several factors which work as opportunity for respective restaurant such as rising disposable income, in urban environment busy lifestyle of people, increasing cultural diversity as well as healthy lifestyle trend.
- Technological – This factor have wide impact on working of fast food organisations because advancement in technology help company in conducting their operations in more effective manner such as conducting R&D activities, increasing business automation as well as sales with the assistance of advanced technology (Nandonde, 2019).
Strength of Porters Five Force - It is the fast food restaurant which is in United Kingdom founded in 2004. It is famous chain providing different types of food to the consumers in an appropriate manner (Huang, 2019). In order to know about competition of respective restaurant, it has used porter's five force model. According to this model, there are five aspects that should be identified by Leon's Restaurants. The first element is threat of new entrants which is low for respective organisation as it provide high quality fast food to customers and operating in 70 locations. Next aspect is threat of substitute which is low for Leon's restaurant as it is serving in different places such as United Kingdom, Norway, United States, Spain and many more by maintaining quality and hygiene level (Julita Julita and Si, 2019). Third element is bargaining power of suppliers is low as there are many vendors or supplier who offer similar type of materials which are required by respective restaurants. Also they can switch from one supplier to another to buy ingredients and raw materials to prepare food for their consumers. Fourth aspect is bargaining power of consumers is low as they have many options for restaurant but quality and hygiene maintained by Leon's restaurant is different from others. This lead consumers to go for particular restaurant to have fast food. Last aspect is competitive rivalry which is low for respective restaurants due to variety of options for consumers in terms of fast food. Therefore, this model assist business to analyse different factors which are surviving at marketplace and make decision accordingly so that they can attain goal and objectives in order to survive and sustain at competitive marketplace (Ge and Li, 2019). It should be analysed by each and every organisation running their activities and operations at market for positive outcomes and make planning as well as decisions in respect to them. Need Assignment Examples?Talk to our Experts!
Mega trends – In fast food restaurant mega trend is related to online food ordering. As people now a days prefer to order food online in comparison of going out. Due to which several restaurant have less sitting place and they are focusing on delivering food online. This mega trend have wide impact on working of Leon's restaurant as they also have to put option on online food ordering in their app. For which they have to hire few candidates who work for this only and result in fulfilling customers needs as well as wants in effective manner (Migdadi and Omari, 2019). Because this is the only way by which company can generate revenue and long term sustainability in business environment.
Critical evaluation of strategy of Leon's restaurant
Identifying Resources in context of a Restaurant -The major resources in context of a restaurant can be:
- Physical resources: These can be resources which carry a tangible form and can be touched (Anisie, 2019). These are the resources which focuses on raw material, infrastructure, machinery and buildings.
- Human resources: In this section, workforce of an organisation can be considered. The knowledge and creativity which has been possessed by the people help in achieving organisational gain.
- Intellectual Resources: In context of Leon restaurant, an intellectual resources can be patent, brand name and copyrights which can be owned by business. These resources does not carry a tangible form and help in creating a distinct image of the organisation.
- Financial resources: This include capital resources which can be owned by a business such as cash, credit and other liquid resources (Baldassarri, 2019). The financial resources help in assuring that sustainability in business operations could be maintained.
Identifying Capabilities for a Restaurant
- Ability to conduct Market research: it can be said that Leon restaurant have been successful in identifying the needs of the target market. This identification helps in fulfilling the needs of customers in a distinct manner and creating an ultimate experience.
- Ability to innovate new recipe: The tag line of the business Leon- Naturally Fast Food has been influenced with its innovative ability of serving fast food which is healthy in nature (Touil and Jabraoui, 2019). This ability to innovate products helps in creating a distinct capability in the market.
- Customer service: It is referred to an direct interaction between guests and seller. The waiting time in which services are delivered are very less which helps in creating an enjoyable experience.
Critical evaluation of Leon's restaurant operations
Restaurant operations involves several activities which they carried out within restaurant for running their business in effective manner. There are several activities included in this such as preparation of food, customer services, cleaning, purchasing raw materials, reporting, accounting and many more. It is essential for Leon's restaurant to conduct operations in effective manner because this will help in satisfying customers within effective manner and accomplishing goals as well as objectives in effective manner (Were, 2019). There are several operations conducting by Leon's restaurant explanation of these are as follows :-
- Customer services – It is operation of Leon's restaurant as they provide better services to customers which is essential for making them satisfy and gaining long term sustainability within business environment. In simple term it can be said that, for an organisation it is essential to serve their customers in effective manner (Cavusoglu, 2019). Because restaurant is part of hospitality industry and for them customer services are major part of business.
- Preparation of food- This operation is considered to be the most important for a restaurant in which the activities such as cleaning, chopping of vegetables, using utensil for cooking, serving in plates in a proportionate manner and many more. This also includes purchasing of raw materials which are used in dishes to be made.
- Customer service- This service is taking care of the queries of customers related to the services, quality, dining room and many more. It is important for keeping them happy and satisfied as they need answers for all their doubts. Furthermore, the customers can also be made aware about various offers being made by the restaurants for attracting existing as well as new buyers.
- Accounting- This operation is related to the amount of expenditure and receipts. There should be a track of every amount that is coming in and out so that an estimation can be made for future requirements (Lai and et. al., 2019). Furthermore, all the amounts should be recoded on regular basis followed by monitoring. This helps in controlling the unnecessary expenditure for increasing the chances of higher profit.
By conducting these operations in effective manner Leon's restaurant can gain long term sustainability within business environment (Godwin, 2019). Along with this, they can generate revenue by making their customer satisfy.
Vision of Leon's restaurant - Vision of Leon restaurant is to make easy for everyone to eat good food. As respective restaurant want to serve best quality products to customers by focusing on quality of offerings. This simply means that fast food offering by them should be healthy. In addition to this, operation of respective restaurant provide assistance to them in accomplishing their vision within effectual manner. One of the major operation is customer services if restaurant serving their guest in proper manner then it result in making them satisfy. Such practices result in becoming them loyal part of company and they come again for buying product or services (Reid and Sanders, 2019). With the assistance of such practices vision of Leon's restaurant will accomplishing in better manner as well as they sustain in business for long term.
PESTEL Analysis of Leon
It is a tool which is used for analysing the external factors in order to determine their impact on the organisation. There are numerous variables which form the basis for assessing current position of entity in the marketplace. It stands for Political, economic, social, technological, environmental and legal. The PESTEL analysis of Leon has been conducted below:
- Political factors- This factor includes guidelines provided by the government for the benefit of the nation. Such policies may be related to the tax laws, free trade policy, trade restriction etc. Leon should focus on the regulations provided by the government for maintaining the quality of food. Furthermore, there are number of licenses which should be obtained. Also, there are specific rules for packaging and delivery of the products that are to complied with.
- Economic factors- These factors are about the various elements which make the whole economy work such as inflation rate, interest, currency rate, and so on. Leon is operating in many countries which makes it imperative to focus on inflation rate of countries in order to avoid unplanned hike in the prices as this can reduce the number of customers. Furthermore, it should target the customers who have more disposable income.
- Social factors- This social factors are connected with demographics of the people that exist in the target areas. People in UK and rest of the world are becoming health conscious which increases the demand to introduce more organic foods. Leone can redesign the menu by including healthy substitutes for the customers. This can be beneficial for Leon to retain its loyal customers by understanding their requirements and choices.
- Technological factors- These factors are connected with the advancement and development of the new technology which can be used in the business. There are many technologies which can be used in the restaurant for making the activities easier. Leon can install new machineries with latest technology to reduce the manual workload on the staff. In this way, it can save huge costs which can be diverted into something profitable. This may require huge investment once but the return are huge which gets multiply with the time and with the right utilisation of the technologies.
- Environmental factors- The factors are related to the nature in which people and organisations exist. There are number of laws for the protection of environment which should be abide by the entities. There should be adequate facilities and technologies to control the emission of harmful gases. Furthermore, Leon should clean the surroundings for keeping the food healthy and free from contamination.
- Legal factors- Legislations are significant for running the business and there should be complete compliance with the relevant laws so as to avoid any legal obligations. In the context of Leon, it should know about various legislations related to the food and drinks so as the minimum quality is maintained. Along with this, there several standards such as Food Standards Act, 1999 which is one of the main law to be abide by the Leon and other restaurants. Order assignment help from our experts!
- Porter's five force model – This model help company in identifying as well as analysing five competitive forces which provide assistance in shaping company and also in determining strength and weakness. Explanation of Porter's five force model in relation of Leon's restaurant are as follows :-
- Rivalry among existing competitors - It is assessed by number of rivals present in the restaurant market for Leon restaurant like Oren, Alphabet etc. This force is high for Leon restaurant because of existence of large number of rivals are present in the market which makes keen competition between existing rivals. Within fast food restaurant industry there are several which result in generating competition for organisations.
- Bargaining power of suppliers - This force examine that what level of control is hold by suppliers of Leon restaurant, the size of restaurant can be the deciding factor in this. Since Leon restaurant is a well established restaurant chain, this force is low and they do not give much power to their supplier due to non dependency on a single supplier.
- Bargaining power of buyer - This force depicts about a buyer's adaptability over any change in price or quality made by Leon restaurant. This force is high in this case since a buyer has many options to switch with no switching cost. Thus, it is essential for Leon's restaurant to use cost as their competitive advantages so that customer will not switch to other company.
- Threat of substitute products - This force represents the number of potential substitutes available in the market and a level of evident uniqueness hold by a firm. Leon restaurant possess high threat of substitutes because many substitute restaurants are making similar food to the food prepared by Leon restaurant. In simple term it can be said that, almost every organisation is offering same type of products which create high level of competition for business firms.
- Threat of new entrants - Leon restaurant is having minimal threat of new entrants since to enter in a restaurant business one need huge capital to invest and it is not easy to create a brand value like Leon restaurant. Because there is no such requirement of high investment within fast food restaurant which is the main reason that several organisations are entering within this sector. This create threat of existing companies of new entrants. Ask for online coursework help from our experts!
After going through entire discussion it has been summarised that, for an organisation strategy is important because with the assistance of this they can accomplish their goals as well as objectives within effective manner. Along with this, operations of business is related to activity they conduct for converting material into finish goods and sale it to customers with the motive of generating revenue. Both work together result in accomplishing goals and objectives of business firm within effective manner. In addition to this, fast food restaurant also have several mega trends within that industry which organisation working in that sector have to adopt for long term sustainability within business environment. Apart from this, it is essential for business firm to conduct PESTEL analysis because it will provide assistance to them in identifying factors related to macro environment. Moreover, Porter's five force model is frameworks which help in analysing five competitive forces which provide assistance in shaping company and also in determining strength and weakness.
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