Business Introduction 2

8/13/2019 Business Introduction 2

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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


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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:


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

INTERNAL ENVIRONMENT

Strengths

1. The target market is clearly definedwith the spending capacity of buyers

reliably estimated.

2. The location is ideal and prominentlylocated.

3. The bulk of the customers belong to thesegment of population that have more

buying capacity.

4. The finance office acts as an auditingunit for the operation.

5. Employees are outsource making thesalary and compensation acceptable for

Weaknesses

1. Market is finite and can not beexpanded.

2. Space available is limited and can onlyhandle at most fifty students inside the

canteen.

3. Service time for the customers thathave relatively bigger buying capacity

is limited.

4. Tedious processing in terms ofliquidations, ordering process of

supplies, and cash for emergency

needs.


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the operation.

6. Permits concessions of goods whichlessen the risk of the canteen in terms

of spoilage and also lessens

capitalization.

7. Target market is controlled in terms oftheir mobility.

8. The canteen can order in bulk whichmakes the inventory more manageable

and can avail of bigger discount.

9. The canteen can transact directly tosuppliers which can lower cost of

goods.

10.The canteen can also provide otherservices to outside clientele which

makes use of school facilities.

11.Stronger relationships of employeeswith the target market

5. Salary is still relatively high for theoutsource compared to the outside

business.

6. Demand of services have very highvariance of which peak and lean times

are clearly defined.

7. The canteen is subject to lean demandof which vacations, holidays and no

class days greatly contribute to amount

of income generated.

8. Totally depends on the presence ofstudents for sales.

.

EXTERNAL ENVIRONMENT

Opportunities Threats


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1. Can change its menu easily dependingon the seasonality of supply that are

available.

2. Food is subject to periodic inspectionboth internally and externally.

3. Can choose wide range of similarsupply that are available in the market

which can significantly affect the cost

of sales of good.

4. Can placed goods that are in trendeither by concessions or by actual

production.

5. Can use the leverage of captive marketto get better deal in products that offer

rebates, loyalty and exclusivity.

1. Similar products are offered bycompetitor outside the college.

2. Is subject to unequal level of playingfield in terms of salary and

compensations to workers.

3. Decrease in enrollment because ofother colleges being more aggressive in

enrollment campaign.

4.

Same products sold outside is relatively

less costly.

5. Permits and license to operate fromtime 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


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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. Thisresult 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


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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. ProductThe 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 non-

meat 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


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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.


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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


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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


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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


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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 andother 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 soldto 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


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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 canbe 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 systemin order to operate properly during lunch time, a canteenemployee 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 parentsregarding 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 givenduring peak time to increase sales volume. Sales is the heart and blood of


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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 totime 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 operationis 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 thethreats 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 ofcaptive 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


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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.

Documents

Business Introduction 2