Honest Presentation

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    They are in this business since last 30 years

    Agrawal Brothers developed Brand name HONEST

    Their motto is to satisfy customer as far as Taste, Quality & Services

    20 Branches all over the Gujarat

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    STAFF MEMBERS

    Total staff members consists of 35 persons.Further bifurcation of staff members is given below:

    Cooks : 7-8 no.s

    Worker : 10 no.s

    Helper/ cleaner : 15 no.s

    Captain : 2-3 no.s

    Total seating capacity at Panchvati branch is of 250 persons

    EXPENSES

    Total salary expenses per month paid to the employees is about Rs. 90,000.

    Total expenses paid as electricity bill is about Rs. 1 lacs.

    Total expenses on raw material everyday is about Rs. 12,000-15,000.

    Total waste of everyday converted in the monetary terms comes out to be Rs. 2000-3000.

    Meal for employees are prepared separately everyday, which includes breakfast, lunch, dinner and evening

    tea.

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    BARGAINING POWER of SUPPLIERS

    1. Number of Suppliers Moderate

    - Significant number of real estate companies for a given

    locality

    - Few reliable ICT providers to manage property

    - Small no. of quality training providers and skilled

    employees

    2. Availability of substitutes High- Substitutes for property (real estate agents), designers,

    employees etc are available

    3. Switching cost High- Hotels have higher bargaining power and can easily

    switch between suppliers

    4. Suppliers's threat of forward integration High

    - Suppliers are highly unlikely to forward integrate into

    the hotel business

    5. Industry's threat of backward integration High

    - Hotels could backward integrate to own their own real

    estate company

    - They could have their own training wing

    6. Contribution to quality High

    - Property development and real estate companies add

    to the quality

    - So does skilled labour and quality training

    7. Contribution to cost Moderate

    - Most suppliers are much smaller companies compared

    to hotel companies

    - Hence hotel companies have a much higher bargaining

    power

    - Supplier contribution to cost is low

    8. Industry's importance to supplier High

    - The few powerful players in the hotel industry are

    indispensable to their suppliers

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    BARGAINING POWER OF BUYERS

    1. Number of Buyers High

    - Buyers are numerous and small in size.

    - Losing one customer in not going to make a difference. -

    Their bargaining power is low.

    2. Availability of substitutes: Medium

    - Multiple substitutes for a given hotel or brand is available

    - Alternate means of accommodation such as camping, RV

    etc is not popular in India

    - Informal accommodation with friends and family is a viable

    alternative

    - Corporate guest houses for the business traveler

    3. Switching cost: Low- Switching costs are negligible

    - Buyers are price sensitive except in the premium segment

    4. Buyer's threat of backward integration: High- Customers are will not construct a hotel or buy a place of

    residence for each place they visit

    5. Industry's threat of forward integration: Low - Low chances or forward integration

    6. Contribution to quality: High- Additional facilities such as spas, gyms etc. are used my

    hotels to improve the quality of customer's stay

    7. Contribution to cost: Low- Brand image is very important in this industry and leads toextra cost

    - Additional amenities, training of staff, location rent (like

    close to airport) etc.

    8. Buyer's profitability: High

    - Low buyers profitability

    - In the mid-segment, there are numerous buyers, of very

    small profitability

    - In the premium segment, buyers are very affluent, and

    they have greater bargaining power compared to the mid-segment

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    BARRIERS TO ENTRY

    1. Economies of scale High

    - High economies of scale

    - Very important to operate a chain of hotels in

    multiple locations, especially for the premium

    segment

    - This reduces the dependence on tourism trends

    at any given location

    2. Product differentiation High

    - Highly differentiated

    - Brand names and values are very important in

    attracting and retaining customers

    3. Brand identity High - Branding is very important4. Switching costs Low - Low switching costs

    5. Capital requirement High

    - Capital intensive

    - Staff, decor, infrastructure etc. are very

    expensive

    6. Access to technology Moderate- ICT is very is very important for property

    management etc.

    7. Access to raw material High- Labor, land and other essentials are easy to

    obtain

    8. Government protection Moderate

    - The tourism industry receives government

    support

    - Eg: Incredible India

    9. Exit Barriers Low -High exit barriers-Specialized assets for the industry

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    THREAT OF SUBSTITUTES

    Availability of close substitutes Medium

    - Close substitutes such as informal

    accommodation with friends and

    family- Alternate forms of leisure

    accommodation such as camping and

    RVs

    - Corporate guesthouses for business

    travelers

    Switching costs Low - Negligible for informalaccommodation

    Substitute's price value Low- Very high for informal

    accommodation

    - Moderate for other leisure

    accommodation

    Profitability of the producers of

    substitutes High- Producers aren't as profitable

    - Large hotel chains have greater

    bargaining power

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    COMPETITIVE POWER OF RIVALRY PLAYERS

    Factors Comment Remarks

    No. of competitors Small High Small number of large operators

    Industry growth Moderate Moderate Annual growth rate of 13%

    Mature industry

    Fixed cost High Low Highly capital intensive

    Differentiation High High Strong brand image commands a very high price

    premium

    Switching cost Low Low Low cost switching to similar brands

    Openness of terms of

    sale

    Open High Price break up into cost, taxes etc. are known

    Excess capacity Large Low Only 69% rooms are occupied Tourism industry is seeing strong growth

    Strategic stakes Large Low Although large hotel companies have diversified

    they still have a majority stake in the hotel industry

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    SWOT ANALYSIS

    StrengthsHonest prices are cheaper than your

    competitors.

    Service style is also good

    They have a take away option for your

    customers

    They have a brand image

    WeaknessesPoor disabled facilities

    Limited fund available

    Offer a product which is available

    on the market

    Dont advertise your restaurant

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    Opportunities

    Opening new branch in new city

    Buy raw material direct from manufacturer

    Arrange average price so everyone can afford

    Threats

    New competitors are enter in your area

    A main competitor has lowered their prices

    and started a price war with you

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    Balanced ScorecardWhat is a Balanced Scorecard?

    The Balanced Scorecard (BSC) is a performance measurement tool that originated in the

    business world.

    Performance measurement is a way to track performance over time to assess if goals are

    being met.

    The BSC was introduced by Robert Kaplan, a Harvard Business School professor, and David

    Norton, the founder and president of Balanced Scorecard Collaborative, Inc., in the early

    1990s as a new way to measure business performance.

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    Objectives Measures

    (what honest must do from each perspective to achieve its overall

    mission)

    (how honest will know how its doing in achieving its objectives

    and in

    turn, its overall mission)

    Finance Perspective

    What is the primary objective of our overall mission?

    To sell and serve the food items, more to the costumer.

    Be a cost leader in the market.

    Increase profitability every year by 19% by 2013

    Earn more by providing outlet

    Providing discount on occasion

    Expanding the menu

    How will we know how were doing in achieving that objective?

    Expand the outlet.

    Unit cost.

    Returned on capital employed

    Franchise

    Festival

    Varieties.

    Customer Perspective

    In order to sell the most food items what must we be doing from

    our customers perspective?

    Providing Great Service

    Maximum satisfaction.

    By providing best Taste, good quality

    How will we know if were providing great service?

    Excellent results on a customer survey

    By revisiting of customer

    Feed back

    Internal Process Perspective

    At what do we need to excel to deliver great service?

    Quick food delivery

    Communication between staff

    How will we know how if were delivering food quickly?

    Amount of time from order to delivery

    Behavior of employees

    Internal Learning & Growth Perspective

    How do we excel at quick food delivery?

    Training employees Preparing for special occasion

    How will we know if were trained and ready?

    Number of employees attending and passing training classes

    Regarding festivals, outside events.

    Balanced scorecard on Honest restaurant

    C S S O O S S A A

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    CRISIS OF HONEST RESTAURANT

    PROBLEMS RELATED TO WASTE

    Waste generated from Restaurant can be categorized into:

    Degradable waste

    Non degradable waste

    Degradable waste can be in the form of:

    Peels and waste portion of a vegetable

    Left over residue by consumers/customers

    Leftover food from the restaurantNon Degradable waste can be in the form of:

    Packaging (Milk packets, bread packets)

    Tin/ boxes of oil

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    DISPOSAL OF WASTE

    For the disposal of degradable waste, each branch of Honest has the separate

    contractual agreement with Municipal Corporation.

    The waste is collected by the Municipal Corporation.

    Some part of the Non degradable waste such as empty packets of milk, breads,

    and other polythene packets are also collected by Municipal Corporation.

    The contractual rate varies from branch to branch as per the waste generated and

    ranges between Rs. 3000 to Rs. 4500 per month.

    The other part of the Non Degradable waste i.e. tins, boxes etc. are sold and by

    mean of which restaurants also get some earnings.

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    SOCIAL ASPECT

    Every year, the Honest restaurant gets the contract for serving at KANKARIACARNIVAL

    by the Government.

    It provides the food packet to the every participant in the Carnival.

    Food for the packets is prepared on the Carnival site, under the inspection of Government

    officers.

    Kitchen at the Carnival site works continuously 24 hrs for 6 days of the Carnival.

    It sells the packet to the Government at the production price i.e. NO PROFIT condition.

    Total turnover at Kankaria Carnival ranges from Rs. 5 lacs to 6 lacs.

    Apart from this, many times in a year restaurant provides the food in the Government

    meetings at NO PROFIT condition.

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    SUGGESTIONS

    Honest restaurant can improve its waste management process by purchasing a wastecollection van.

    This will collect all the waste from the honest chains.

    They can segregate the waste like plastic cups; spoons etc and sell it in the market.

    From this segregation the can earn the minimal revenue and cover up their cost of wastecollection van

    As they follow the safety measures in their kitchen, they can also follow the measures forthe waste management.

    The can give the training to their employees for proper waste management and know theimportance of hygiene factors related to this.

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