Restaurant Business Plan

4 April 2017

The Business Plan for Executive Summary Manly’s restaurant sector seems to lack a restaurant that will provide consumers with an authentic Brazilian dining experience. Currently, most restaurants in the area meet the expected industry standards but lacks in the supply of high quality food, beverage and service originated from South America. La Barata will target that gap and launch a Brazilian cultural experience in the Manly area specialising in dining, cooking classes and entertainment. La Barata is an innovative restaurant with the ground-breaking concept of combining dining and entertainment at the same time and place.

The restaurant will be located at the wharf in Manly, thirty minutes from Sydney CBD. The target market will be tourists and immigrants from South America as well as other international tourists and locals. La Barata will focus on middle and upper class but will not by this exclude other target markets. The restaurant will create a warm and welcoming environment that allows the customers as well as the employees to get a feeling of a friendly atmosphere.

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La Barata’s vision is to: ‘The aim for La Barata is to be the first choice for all customers who seek excellent food, service and culture experience’

Currently there is no restaurant in Manly which offers such a unique concept that La Barata is aiming to achieve. La Barata will underline its concept with three key points: • Deliver a unique cultural experience • Provide high quality dining and service standards • Guarantee all stakeholders to keep up with constant • change and trends in the industry The main issues analysed and discussed in this report is whether there is an opportunity in the market that allows a new restaurant to launch.

The second key point discussed is the high level of competitors and if they will appear as an obstacle for La Barata to operate successfully in Manly. Another essential topic will be discussed focusing on the future trends in the macro environment that would have an impact on La Barata’s organisational structure. The methodologies used in this report include secondary research. The data is mainly collected from websites regarding contemporary issues in Australia and especially Manly. The information and theories has also been sourced from textbooks and personal communication.

This business plan has made it possible for La Barata to see the viability in the restaurant industry in the Manly area. In addition further recommendations and possible alternatives have been included as a conclusion to the report. Table of Contents 1. 0 Introduction6 2. 0 Demand for International cuisine in Manly7 2. 1 Opportunities in Australia7 2. 1. 1 Economic factors or influences8 2. 1. 2 Social9 2. 1. 3 Other Issues10 2. 2 Trends Today13 2. 2. 1 Travel & Tourism13 2. 2. 2 Terrorism13 2. 2. 3 Synergy Effect14 2. 2. 4 Events in the market place14 2. 3 Profitability and Attractiveness of the Industry15 . 3. 1 Existing Competitors16 2. 3. 2 Potential Competitors16 2. 3. 3 Substitute Products17 2. 3. 4 Customer Power17 2. 3. 5 Supplier Power17 2. 4 The Market & Competition18 2. 4. 1 Market Characteristics for dining in Manly18 2. 4. 2 Competitors18 2. 4. 3 Four Biggest19 2. 4. 4 Where do we want to be positioned? 19 2. 5 Evaluating the Market gaps, trends and opportunities21 2. 5. 1 La Barata’s Strengths and Weaknesses22 2. 5. 2 La Barata‘s Opportunities and Threats22 2. 5. 3 La Barata’s SWOT analysis grid23 3. 0 Business Environment23 3. 1 Future Trends23 3. 1. 1 Tourists23 3. 1. 2 Terrorism24 4. The business concept25 4. 1 Company description25 4. 2 Vision, Mission & Values26 4. 2. 1 Values26 4. 2. 2 Vision27 4. 2. 3 Mission Statement27 4. 3 Organisational structure27 5. 0 Marketing28 5. 1 Segmentation29 5. 2 Branding30 5. 3 Marketing mix30 6. 0 Strategic Alternatives & Recommendations33 6. 1 Concept33 6. 2 Location34 6. 3 Price and quality34 7. 0 References35 8. 0 Appendices39 Appendix I: Democracy Rules the Marketplace39 Appendix II: Perceptual Map Level 140 Appendix III: Perceptual Map Level 241 Appendix IV: Perceptual Map Level 342 Appendix V: Property Value – Free Postcode Profile43

Appendix VI: Country Snapshot47 List of Figures 2-1Levels of the Business Environment……………………………………………………………………….. 7 2-2Economic Growth in Australia……………………………………………………………………………….. 9 2-3Porter’s Five Forces……………………………………………………………………………………………….. 15 2-4 Level of Competition………………………………………………………………………………………………21 4-1The Organisational Structure…………………………………………………………………………………. 28 5-1Core Marketing Concepts………………………………………………………………………………………. 28 5-2Successful Differentiation …………………………………………………………………………………….. 30 5-3Five P’s …………………………………………………………………………………………………………………. 31 1. 0 Introduction

The restaurant industry faces a number of significant challenges; the greatest of these is the intensity of competition and the need to attract the right type of customers (McMorran 2007, p73). Current and future trends, however, imply that the restaurant industry has growth markets. The increasing number of people dining out in Australia results from busy lifestyle and a declining emphasis on family life and, in addition, female work participation continues to grow. Collectively, these trends influence consumer dining habits: they do not always have time or desire to cook at home.

Instead people enjoy the pleasure and convenience of dining out. The purpose of our report is to create a business plan for a prospective Brazilian restaurant, the La Barata. The restaurant is to be located in Manly, north of Sydney. The scope of the business extends beyond food and beverages. La Barata creates a Brazilian experience through its cultural atmosphere, high quality food and authentic Brazilian service. The business comprises of cooking classes, a cooperative arrangement with a dance school in Manly to teach traditional and contemporary South American dance.

La Barata provides guests with Brazilian entertainment, excellent dining and the opportunity to dance South American style. Our report is structured to respond to our purpose: to evaluate the viability of a new Brazilian concept restaurant in Manly. Each section contributes to addressing this focus: • Section one critically assesses the macro and external environment to investigate if there is viability in the market for a Brazilian restaurant. • Section two evaluates the business environment, focusing on future trends to examine what is required to plan ahead for. Section three describes the business concept, which has carefully been determined upon the research conducted in the previous sections. • Section four elaborates on potential marketing strategies to successfully launch the new business. Each section is concluded with a summary of implications from and conclusions to the analytical findings. In the final section recommendation, options and alternatives has been discussed. Demand for International cuisine in Manly 2. 1 Opportunities in Australia It is easy to think that the restaurant market in Manly is stable and that it would not be a problem to open another restaurant.

The fact is that there are a lot of individual differences between every restaurant. Even the smallest differentiation can be the distinction between fully booked every day of the week or closed doors before the end of the year. Some of the mistakes that have been observed in unsuccessful restaurants are of such small size that if we are aware of them to begin with, it would be easy to exclude them and prevent them from doing any harm to the business. Other negative features of the manly dining district are so apparent that it could easily be stated that there is no room for this type of business in the market (Hospitality Net 2007).

In this section we review the macro and external environments of the La Barata restaurant. The analyses isolate relevant national, state and local factors that would influence the business proposal to open and operate a new restaurant. We base our analyses on the framework provided by Johnson & Scholes (2005) who identify that the success or failure of a business is influenced by different levels of the business environment, as shown in Figure 1. Figure 2-1: Levels of the business environment Source: Johnson & Scholes 2005 First, a macro environmental analysis tool, the PESTLE framework, is applied and discussed.

The analysis identifies broader influences that shape the success or failure of the proposed restaurant business. Second, industry and market influences will be investigated to gauge existing diversity and the opportunity to create the strategic competitive advantage through employing unique business activities (Johnson & Scholes 2005). We conclude the section by identifying the gap in the market, where the most significant factors will influence the business. 2. 1. 1 Economic factors or influences The economy in Australia has a stable growth of three to four per cent per year (D.

McDonald, Personal Communication, October 25, 2007), and the national economy is also forecasted to be secure for the upcoming years. Australians will spend money on more luxurious attributes in life, like going out for dining. There was solid economic growth in Australia during 2005, driven by a range of different factors. These included the business environment, nominal changes to interest rates, steady consumer expenditure and strong business investment levels (Business Investment Spurs…, 2006). Disposable income levels in Sydney and, in particular, Manly is high compared to the rest of New South Wales and Australia (See Appendix V).

The Department of Employment and Workplace Relations (DEWR), within the Australian Government, is aiming to maximise the possibility for people included in the Australian workforce to find employment (Our mission and…, 2006). The unemployment rate in New South Wales has decreased form 6. 3 per cent in 2001 to 4. 7 per cent in August 2007 (Australian Bureau of … , 2007). The decrease illustrates that the Australian residents has more disposable income and a greater customer base would potentially be created. Figure 2-2 illustrates rapid growth of real GDP per employed person in Australia during the years 1975 – 2000.

Figure 2-2: Economic Growth in Australia Source: McTaggert 2003 The level of business and personal taxation strongly influences the customers behavior in regards to dining out. When the government decreases the taxes, the households have higher income and more money will be spent on goods and services. It works the same the opposite way; increase taxes and the population spend less money on unnecessary items and focus more on necessities and saving assets (Stonecash et al. 2005). 2. 1. 2 Social Property Value (2007) report that more than 25 per cent of the Manly population is aged between twenty five to thirty five years old.

It is also stated in the report that 56. 7 per cent of the families do not have kids. All these aspects are essential to the fact that Manly is a perfect location for having a lot of outdoor dining. The lifestyle in Australia and Sydney is exceedingly social; people spend a small amount of time indoors. It would be preferred to go out and be social with other people; this is primarily due to the warm climate in Australia. People today are more independent and stay single longer than before. National survey data reports the changing structure of households and families (Australian Bureau of… , 2007).

Australians marry and start families at a later stage in life. Further, the highest level of single-person households currently exists in Australia and as the population ages, the number will increase. In short, more people have reasons to dine alone and at home. There are also more women in the workplace today; this suggests that the family has less time to spend in the kitchen. Together with nationwide statistics, this illustrates that Australians work longer hours now than earlier. Tourism in Australia is still increasing (Tourism Australia 2007) and Sydney, Manly is definitely taking their share of the Australian proportion.

Six million people visit Manly each year with an increase of 6. 2 per cent per year (Australian Bureau of … , 2007). Australia is known for being one of the most culturally diverse societies in the world. It is home to people from more than 200 countries and has an enviable international reputation for its mixture and tolerance (Department of Foreign Affairs 2007). When looking at New South Wales, Sydney is the place which has the most diverse ethnic population, with people from around 160 countries now peacefully settled throughout the city.

It embraces a rich multicultural community that totals almost four million people that together have created a rich and colorful lifestyle envied around the world (Visit NSW 2007). An everyday cosmopolitanism is present in the society which involves an everyday life of people of all backgrounds and culinary experiences are to a large extent a mainstream practice among many Australians. Due to the cultural diversity there has been a growing trend in recognition of the social and cultural importance of food in creating cultural meaning, social bonds and senses of personal identity (Brand, Noble & Wilding 2002).

Further on this has resulted in growth of cultural activities and variety in food and restaurants. 2. 1. 3 Other Issues The economical and the social trends are the once that has the biggest influences. They are evidently affecting everyone living in the macro environment. The other issues will be looking at the political, technological, legal and environmental aspects of the external environment. 2. 1. 3. 1 Political The regulations for import to Australia can be strict. A lot of paper work has to be done to make sure that all assets and groceries that are imported are legally approved.

This could mean that La Barata has make arrangements to make it impossible to import goods from Brazil. The federal election is coming up early in 2008; this could have an impact on some new legislation. However, as the politicians are spreading promises in the campaigns, there is not anything discussed that would be in the direction of affecting us. The Australian Government has been politically stable over a long period of time. It could therefore be assumed that major changes rarely arise drastically. It would normally be a long process of developing and implementing them.

The local politics in Manly would have a large impact on the restaurant business. They hold the power of permitting the location of out door seatings. They also hold the authority of opening hours, noise levels and wastage (Manly Council 2007). 2. 1. 3. 2 Technological New technology has made it possible to save energy based costs in daily running of a restaurant. New designed equipments in the kitchen also create the possibility to use less gas. New POS-Systems are also out on the market with electronic palm pilots connected to them to save time and money for the wait staff.

This turns the speed of service into faster pace which yet again creates a higher table turnover for the restaurant (Hospitality Net 2007). The internet has created a marketing channel for everyone in the world of business. It is also a great place for the consumer to exchange knowledge and information about different restaurants. There are web pages like eatability. com. au where the consumers can rank and give feedback on restaurants. This is a reliable tool as consumers tend to trust fellow consumers more than journalists.

The internet also opens other opportunities like online booking, newsletters, and the possibility of creating a customer database. 2. 1. 3. 3 Legal The New South Wales Government Office of Liquor, Gaming and Racing, determines what type of liquor licence applications that will apply. They also decide what type of licence the restaurant will get. This means that if La Barata obtains a ‘restaurant licence’, it is the restaurant’s obligation to make sure that seventy per cent of the customers order a meal and not only consume alcohol (New South Wales… , 2007).

If La Barata would like to transform in to a bar later in the evenings, this would require a different licence which permit customers to consume alcoholic beverages without dining. This legislation will decide a major part of the concept and which direction the concept will take. The employer has to follow federal and state laws in regards to industrial awards, employee breaks, food and other agreements. If the restaurant becomes a member of an employee association like the Australian Hospitality Association (2007) there are another set of rules being implied. If there is entertainment on every Friday – Sunday, the venue will be seen as an ntertainment venue which means that it is legal to pay a flat rate of $18 through the whole weekend (Sandy Christgard, General Manager Henry Afrika’s, Personal Communication, September 10, 2007). 2. 1. 3. 4 Environmental The increased focus on the environment today makes it difficult for any business to not be aware of the environmental threats. There is a pressure from the Australian government to be environmentally friendly since they have increased number of fees to those who break the law (Manly Council 2007). There are also demands from shareholders to work as eco-friendly as possible.

Manly Council (2007) recommends four hospitality business activities which support an environmentally friendly operation: • Recycle everything correctly • Water saving technology to be used in kitchen as well as bathrooms • Only use eco-friendly suppliers • Use energy saving light bulbs all over the restaurant These four points will not function as determinants whether the business will open or not. It will however be essential in regards to if the business will successfully attract the target market which is primarily concerned about the environmental issues. 2. 2 Trends Today

Leading on from previous section regarding the macroeconomic environment this section will focus on trends that need consideration of whether to open a restaurant business in Manly. 2. 2. 1 Travel & Tourism Worldwide tourism is one of the major socio economic sectors and over the last decade the travel industry has grown rapidly with more travellers every year and a wider variety of destinations and activities. Due to economic growth the tourism market expands when potential travellers have more disposable income. Also as a result of global competition and as new technologies improve efficiency, cost of travel has fallen.

In Australia tourism is an important economic driver to the Australian economy. Tourism is an $81 billion industry for Australia and the total economic value of inbound tourism in 2006 was $20. 5 billion. This number is expected to grow just over $100 billion in 2016 in real terms, underpinned mainly by growth in inbound tourism. (Tourism Australia 2007) When looking at a local scale Manly has a long history of tourism and is today one of Sydney’s most popular tourist destination with an estimated six million people currently visiting the area per year (Manly Council 2007). . 2. 2 Terrorism Since the early 1990’s, there has been a growth in the number of incidents where tourists and tourism facilities are deliberately targeted by terrorist groups (Weaver & Lawton, 2002). The threat posed by terrorism to our security is complex, broad-ranging and long-term in nature (Australian Government 2007). The growth of international business brings new opportunities and targets for terrorism that can have considerable effects on business with major decline in visitor numbers.

No other sector of business offer easy and conspicuous victims than hospitality therefore with the highest concentration of relaxed, vulnerable citizens, a restaurant attacks would have enormous shock value (McMorran 2007, p 59). 2. 2. 3 Synergy Effect With one of the highest number of alfresco dining venues in Sydney (Manly Council, 2007), Manly is both a highly competitive business environment and one that attracts diners generically which produces a synergistic effect based on the selection of a dining location as opposed to a venue. Synergy refers to the benefits that might be gained when activities or processes complement each other such as their combined effect is greater than the sum of the parts’ (Johnson et al. 2005). A synergistic effect is the combined elements of a business working together to achieve maximum stakeholder satisfaction. For a company to cooperate with other organisations in an effective way the shared activities must have impact on sustainable competitive advantage (Porter 1987). Sustainable competitive advantage forms the basis for developing brand positioning strategy and the message that will be portrayed by the consumer (Kotler et al, 2004).

This information is helpful to position a restaurant more precisely to the customers La Barata aim to attract. Taste is only one of our senses. Restaurant guests are more likely to want an authentic experience that speaks to them and their needs. 2. 2. 4 Events in the market place Manly offers an extensive range of exciting events and festivals throughout the year which attract an increased number of new as well as returning visitors. According to Manly Council (2007) more thanfive5 million visitors come to Manly each year to enjoy a wide range of events and entertainment attractions.

The two major events are the ‘Manly Jazz Festival’ and the ‘Manly Food and Wine Festival’ but along with other events Manly is also known for its weekly market. Open during weekends and most public holidays, Manly Arts & Craft Market is located in the heart of Manly and is always buzzing with activity attracting both locals as well as many tourists visiting the area. Manly Jazz Festival: Australia’s largest community based jazz festival during the October long weekend, features over seventy free performances on six outdoor stages from noon until sundown with indoor ticketed concerts as an option in the vening. Jazz fans from across the nation and overseas converge on Sydney’s prime seaside resort for a major event which is uniquely sited to accommodate vast crowds who come to enjoy the festive atmosphere over the October long weekend (Manly Council 2007). Manly Food & Wine Festival: ‘A Taste of Manly’ is one of Sydney’s largest regular community based food and wine festivals occurring on the first weekend in June. Attracting an estimated of 30,000 patrons each year, people are drawn by the combination of scenic beach setting and a wide range of quality food and wines on offer (Manly Council 2007).

These events must be taken in consideration and brings an opportunity for La Barata to attract more costumers. 2. 3 Profitability and Attractiveness of the Industry Michael Porter has developed a five-factor Figure to forecast the market profitability. If the average level is low it will be much harder to succeed than if the average level was high (Aaker 2001). Figure 2-3 is adapted from a journal Porter wrote in 1980. Figure 2-3: Porter’s Five Forces Source: Johnson & Scholes2005 2. 3. 1 Existing Competitors

As mentioned earlier there are four major competitors in this market: Rips & Rumps, The Bavarian Bier Cafe, Out of Africa and Alhambra. La Barata is the only restaurant serving Brazilian food, which will create a competitive advantage. On the other hand, the other established restaurants already have their customer base. This means that La Barata has to generate a new foundation of customers and this could be achieved through two methods. The first one would be to ‘steal’ customers from the competing restaurants and target the people who already dine out in the manly area.

In addition La Barata could target consumers that have not dined out in Manly before; to do this the restaurant has to have a concept strong enough to create awareness among these people. There is a fairly high fixed cost in this market. The rent for venues in Manly is not cheap and neither is the alcohol license. The restaurant needs a set number of visitors every week to survive in this market. There is not a large barrier of exit and an organisation can do so without too much risk. This implies that it is less complicated for prospective restaurants to launch their business.

It is not an unusual outcome in this industry and it is a largely negative feature in this project 2. 3. 2 Potential Competitors It is important to be aware of the possibility of future entrants (Aaker 2001), this would be due to future forecasts of prospect competition. Aaker (2001) further discusses the different barriers to enter the market. The capital investment required for this industry is not as big as for example the airplane industry, but is still an amount that most people do not walk around with in their pockets. After the basic investment is made there are still a lot of expenses to be paid.

Economies of scale do exist within this industry, so if a person is trying to open his first restaurant there will be difficulties due to high amount of fixed costs. Some of the restaurants in Manly are owned by companies that own other restaurants or nightclubs; The Bavarian at the wharf is an example of this. This way companies can afford to loose money in the beginning and not worry too much about their profits during the first year of business. The distribution channels within dining experiences are hard to use effectively. The company must make sure how to reach the right segment and how to attract new potential clientele.

To take over customers that are loyal to other restaurant is difficult but might be possible when the restaurant show weaknesses, which often happens at popular venues. If the restaurant is going well there can be a fair of changing the successful formula. This can be seen as a mistake since consumers get bored and need change. People want something that is different and this is where a company can achieve an immense competitive advantage. La Barata has a great competitive advantage since they are the only Brazilian restaurant in the Manly area (Your Restaurants 2007). 2. 3. 3 Substitute Products The substitute power is high in this market.

Firstly, there are all the other restaurants serving different styles of food. Secondly, there are all the other restaurants that we have not included as our closest competitors. This can be everything from finer dining to fast food. Thirdly, there are all the other activities one can do in the evenings like theatre, opera and concerts. Fourthly, the customer can choose to not go out at all and instead invest their money in for example new home products or travel. 2. 3. 4 Customer Power The customer has got a lot of power in this industry because there are such a wide variety of restaurants to choose from.

La Barata can make a difference to a certain degree by creating a strong brand and competitive advantage, however with all the competitors and all the substitute products the power is in the hands of the customer. 2. 3. 5 Supplier Power There is a large range of products out in the market to choose from. Within the alcohol industry, the restaurant has most of the power. For La Barata to sell Smirnoff Vodka or Absolute Vodka, does not make a big difference. Then again, it is a must for La Barata to supply beer brands like Toohey’s and Carlton to attract the local customers.

A restaurant needs quality groceries to be able to offer high quality food. The suppliers have the power to provide the best groceries to whom they choose. It is therefore essential for La Barata to build friendly relationships with the local and international suppliers and carefully choose who they do business with. 2. 4 The Market & Competition Looking at the previous section on today’s trends, a new launch of a restaurant in Manly seems optimistic. This section will take the research one step further and investigate the market characteristics and evaluate the competitors in Manly. 2. 4. 1 Market Characteristics for dining in Manly

The restaurant market in the Manly area is a well-established market and offers a wide variety of different types of dining (Manly, Sydney Australia 2007). The range includes everything from simple fast-food places and casual lunch restaurants to more exclusive establishments (Food, wine &… , 2007). The cluster of restaurants in one relatively small area could be considered as too intensive and somewhat overexposed. However, due to the substantial amount of tourists, the various events and festivals and the growing trend of dining out is still implying that the demand matches the supply.

The need of one more restaurant in the area could be discussed, although a gap can be found when searching for the type of restaurant which this report is aiming to launch. The main opening in the market would be assumed to be the demand for a cultural experience and national food from South America. The prospected costumers could be divided into different groups, with the focus on the travellers and immigrants from South America, especially Brazil. 2. 4. 2 Competitors The La Barata is aiming to be a lunch restaurant, fine dining, a cultural experience and a drinking establishment, which results in numerous competitors at different levels.

First and foremost La Barata will operate as a restaurant with Brazilian food. The aim is to create a dining experience in a tasteful environment with authentic South American food not overprized. The main restaurants in Manly which La Barata would experience as the direct competitors would be Rips & Rumps, The Bavarian Cafe, Out of Africa and Alhambra. These are all restaurants which have well-established positions in the restaurant market in Manly. They are popular dining venues in the area and are keeping a higher standard and relatively reasonable prices compared to other restaurants in Manly. . 4. 3 Four Biggest The reason for these restaurants being direct competitors differs. Alhambra serves food from Spain and northern Morocco, they are located just opposite Manly Wharf and specialises in the distinctive tastes of the region. They also have entertainment during the weekend, including flamenco dancers and guitarists (Your restaurants, Alhambra 2007). Out of Africa is, as the sound of the name, offering dining and experience with inspiration from Africa. Their major key success factor is the unique menu, which is hard to find anywhere else (Your restaurants, Out… , 2007).

The Bavarian Bier Cafe is a piece of European culture located right on the Wharf. Their strength is mainly the location but also their large variety of German food specialties (Your restaurants, Lowenbrau 2007). Different from the other three of the main competitors, Rips & Rumps are not specialising in a particular country or culture. Instead they are famous for the good quality of meat products, filling meals and reasonable prices. When widen the perspective and exploring the combination of restaurant, cultural experience, performance, dancing and cooking classes the competition is looked upon differently.

In terms of competitors located in the CBD area of Sydney the two closest competitors would be the Spanish Terrazas restaurant and the Lowenbrau. The Spanish Terrazas offers traditional Spanish cooking combined with the live sounds of Salsa and Latin American music (De Groots Media 2007). The Lowenbrau is associated with the Bavarian Bier Cafe in Manly but in difference to the Manly establishment, they have put more emphasise on entertainment and the cultural experience. 2. 4. 4 Where do we want to be positioned? A good way of getting a deeper understanding of the business concept and the surrounding environment is to create a perceptual map.

It is vital to receive knowledge about costumers and competitors to be able to decide which market and segment to focus on. A perceptual map illustrates where your business is positioned compared to the main competitors in terms of for example quality and price. The perceptual map also assists the business to select target market strategies and to know which costumer clientele to focus on. It is also essential to undertake a competitor analysis in order to understand the competitors and not repeat obvious mistakes tried before.

This creates the possibility for the business to receive knowledge of competitive opportunities as well as possible threats. The research required when creating a perceptual map will make it easier to decide which segment to concentrate on depending on your business objectives as well as the competitors. The perceptual map will further outline the competitors’ position to each other (Cravens & Piercy 2003). Numerous different aspects must be taken into consideration when analysing La Barata business concept.

It is not enough to research other restaurants but it is essential to involve companies that offer entertainment, cooking school, cultural experiences and dance classes. Price and quality are two of the main factors that costumers consider when visiting a restaurant. Further factors such as the experience are a strong influence on the future visits. Depending on where the business will be positioned on a perceptual map, different consumer segments will be attracted. Since La Barata will offer food and beverage, cooking classes and a cultural experience three perceptual maps will be drafted.

The maps will in a good manner capture important aspects for La Barata in terms of main competitors and segment focus. The main focus for La Barata is to offer high quality food and beverage. It must therefore be prioritised to research, find and evaluate other competitors that focus on food excellence. Those will be La Barata direct competitors and put in a level one priority. As mentioned above La Barata will also offer cooking classes and a cultural experience in form of a Brazilian atmosphere. This brings indirect competitors in terms of business that offers similar cultural experiences.

Those competitors will be put in a level two and three priority (See Appendix II-IV). Figure 2-4: Level of Competition Level 1: Competitors that offers high quality food. Level 2: Competitors that offers events and social experiences. Level 3: Competitors that offers similar cultural experiences. Source: Cravens & Piercy 2003 5 Evaluating the Market gaps, trends and opportunities SWOT analysis can create guidelines for a new business on how to move towards a successful future. It is essential to be aware of internal as well as external factors that can influence the business.

Based upon the company’s strengths and weaknesses together with the opportunities and threats, a strategy can be developed. To be able to achieve knowledge in how to response to the external environment a company’s internal capabilities must be examined. What are the business doing well and what can be seen as weaknesses (Peterson & Jaret 2001). F actors such as company culture, organisational structure and operational capacity should be evaluated in the internal analysis (Net MBA business…, 2007). A chart of La Barata’s internal environment leads to the following illustration of possible strengths and weaknesses. . 5. 1 La Barata’s Strengths and Weaknesses | | | |Strengths |Weaknesses | | | | |A unique concepts offering a cultural experience |Limited knowledge and information of Brazilian | |Cocking school and strategic |culture. |relationship with dance schools |Financial condition | |Produce high quality food, |Receiving market share | |beverage and service. |Exclusive contracts | |Continuous staff training and | | |updating to improve quality | | |and service. | |Staff development and evaluation | | Once the internal capabilities have been outlined, the company can begin to investigate the external environment. Factors that impact the organisation such as changes and activities in the macro environment must be determined. These elements might consist of social, economical, demographical and political circumstances (McColl-Kennedy Kiel 2000).

The following section is outlining the challenges that La Barata possibly will be facing. 2. 5. 2 La Barata‘s Opportunities and Threats | | | |Possible opportunities |Potential threats | | | | |Growing cultural interest. Difficulties in finding qualified employees. | |Trends in forms of travelling |High direct and indirect competition. | |Demographical changes. |Laws and regulations | |Changes in consumer behaviour considering dining patterns. |Trends | |People are dining out more often. | |Geographical location in Manly | | When the internal and external information has been summarised the SWOT analysis can be constructed. To assist the business to evaluate their situation the company the strengths and weaknesses are combined with the opportunities and threats (Peterson & Jaret 2001). 2. 5. 3 La Barata’s SWOT analysis grid | | | | |Opportunities |Threats | | | | | | |A unique concepts offering a cultural experience |La Barata depend on high quality and service, but it is | |Strengths |will lead to that people dining out will chose La |difficult to find qualified and service-orientated | | |Barata restaurant. |employees. | | | | | | | | | | |The geographical location in Manly creates a high |Due to the direct and indirect competition La Barata | |Weaknesses |consumer attraction, but brings increased costs. |face difficulties receiving market share. | Business Environment

The research in the previous section investigated if there is a need for a Brazilian restaurant in Manly and what internal and external factors would have an influence on the launch of a new business. Section 3. 0 will take a closer look into the business environment which mainly focuses on future trends in regards to tourism and terrorism. 3. 1 Future Trends 3. 1. 1 Tourists According to Tourism Australia (2007) tourism will continue to increase in the future and by 2016 reach more than $100 billion in contribution to the Australian economy. This is mainly due to growth in domestic tourism. Growth of domestic tourism is due to: • Strong AUD, particularly against Japanese Yen and US dollar • Increased confidence that the US will have a mild slow down in economic growth

Improved prospects for strong growth in the aviation industry and introduction of the new Airbus 380 will bring new opportunities in seat capacity encouraging an increased number of international visitors. Another aspect of growth is greater competition among low-cost carriers that will create a cheaper way to travel encouraging both domestically as well as internationally growth in visitor numbers. In Manly, as mentioned earlier, tourism is predicted to grow accordingly at a rate of 6. 2% annually over the next years (Manly Council 2007). Despite enhancing the local economy the increase in visitor number also causes concerns such as social and environmental pressures, which are intensifying in line with growth of the community. 3. 1. 2 Terrorism

In recent years most destructive terrorist incidents have struck at hospitality, tourism and travel. Current trends threaten these industries more than any other sectors of the society (Cetron 2006). Terrorism is an important factor for the industry providers, not for the threat itself but because of the effect it has on the industry’s customers. The amount of terrorist attacks is likely to increase in the next decade (Cetron 2006). Terrorism is gaining a wider support and is aiming increasingly at civilian targets. In the years ahead, these trends will increase the terrorist threat specifically to the hospitality industry throughout the world (Cetron 2006).

There has never been a major attack in Australia itself; however the country has been affected by terrorism. For instance numerous Australians died in the 2002 Bali bombings, and Australia’s embassy in Indonesia were bombed in 2004. Australia would therefore be considered a target for terrorism. A restaurant face special risk as food contamination is an easy way for terrorists to cause fair. The results might not be as immediate and dramatic as a bomb, although it could be just as devastating (Cetron 2006). 4. 0 The business concept Considering the result of the previous research, this report has exposed that there is evidentially an opportunity for a Brazilian restaurant to launch in the Manly area.

To progress further in planning for La Barata, a company description has been outlined based on the findings in the previous sections. 4. 1 Company description Background studies reveal that the economy in Australia is increasing which leads to people dining out more. Research also shows that the disposal income in Manly is relatively high compared to the rest of Sydney. This is the reason why La Barata is targeting middle and upper class. La Barata will offer high quality food and service, but will not by this exclude other target markets. Value for money and alternative buffet menus will guarantee that it should be affordable for anyone to dine at La Barata.

Further on, demographical changes in the society has been noticed, such as more single people and more women in the workplace. This is also strong linkages to why people dine out more regularly. Looking at prospective competitors, the research illustrates that there is a strong motive for opening a Brazilian restaurant, since there is no similar concept existing today. Manly being a popular destination for South American travelers and Brazilian tourists in particular is another factor that would support this argument. Manly is also attracting other travelers from around the world, whom would be assumed to be open to new cultures and experiences. La Barata’s main focus will be the food, service and cultural experience.

To launch something outside the basic restaurant concept, something unique, La Barata will offer cooking classes and have a strategic relationship with a dance school in Manly. This will increase the customer range and experience. The cooking classes will approximately run once a week but will be controlled upon demand. The classes will include a brief outline of the Brazilian culture and culinary specialties. Further on the relationship with the dance school and joined promotions will expand the customer base. The concept will include joined offers, discounts, exchange services, prospect entertainment opportunities and can be referred back to the synergy effect described in the section 2. 2, Trends Today.

The multicultural society in Manly is in the need for cultural experiences. People has an urge for more than quality food and service, they want an authentic experience. To make sure that the service is of a constant high standard, La Barata will provide the staff with continuous training. 4. 2 Vision, Mission & Values It is important for the company to develop values which can be seen as indirect guidelines, the values will also set the ground for organisational culture. Developing a value statement is culture specific and is related to which industry the business is operating in (McNamara 2007). The values function as an outline for the creation of the business’s vision and mission.

The vision and mission are essential for the organisation to have a clear goal and awareness of how to achieve success (Peterson & Jaret 2001); it also works as an inspirational source for the employees. The importance of these statements has been considered and is stated in the paragraphs below. 4. 2. 1 Values • Create an environmental friendly approach to keep up with the critical state of environment worldwide and to attract all possible segments of the market. • Enforce a duty of care within the restaurant to protect the people who are visiting the premises. • Be honest to all stakeholders to gain trust. ‘To treat people the same way we want to be treated’. Create a friendly environment for employees to make them feel appreciated and important for the organisation. • To empower employees who shows trustworthiness and responsibility, with the aim to create job-satisfaction • Continuously updating and training employees to increase knowledge and keep up with ongoing trends 4. 2. 2 Vision To create a warm and welcoming environment, that allows the customers as well as the employees to get a feeling of a friendly atmosphere. The aim for La Barata is to be the first choice for all customers who seek excellent food, service and culture experience. 4. 2. 3 Mission Statement La Barata is a Brazilian restaurant, which will provide high qualitative food, beverage, service and cultural experience.

This will be offered to anyone who enjoys dining out, although focus will be put on the middle- and upper class. Unlike other restaurants in the area, La Barata will provide a mixed range of cooking and dance classes and a unique opportunity to experience an authentic South American atmosphere. 4. 3 Organisational structure To provide high quality products and services, La Barata is aware of a well-operating organisational structure. It is essential to assign duties and responsibilities to the key people within the company. A company’s organisation consists of the relationship of employees to one another (Peterson & Jaret 2001). It is important to plan for the entire organisation and to structure the management, staff and administrative section.

The structure is vital in order to have all divisions working as efficient and effective as possible (Planmagic Corporation 2007). La Barata believes in empowerment of their employees, however to avoid confusion and miscommunication it is still essential for the business to have a clear outlined structure. Employees need to know who to report to in case of issues and complications (Peterson & Jaret 2001). Figure 4-1 illustrates La Barata’s organisational structure, which will operate as a foundation for the new business. Figure 4-1: The Organisational Structure 5. 0 Marketing ‘Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others’ (Kotler et al. 2003).

La Barata use this tool to gain attention from the customer in the crowd of other possible choices they might have. Figure 5-1: Core Marketing Concepts Source: Kotler, Bowen & Makens 2003 5. 1 Segmentation Figure 5-1 illustrates how marketing is an ongoing process. A new business has to know where to begin the development of a sustainable marketing approach. The first step would be to find the segments in the market. In order to avoid capital loss on a market that would not have interest for the product, it is necessary to exclude certain segments. The four different segmentation variables used are demographic, geographic, physiographic and behaviouristic (McColl-Kennedy & Kiel 2000). Demographic:

Age:The age group this restaurant is aiming for is 25-35. Gender:Both Genders Education:Higher education; graduate diploma, bachelor or higher. Family Size:2 Family Life Cycle:Couples without children, couples with non-dependent children. Marital Status:Single, married, de facto. Occupation:Professionals, associate professionals, managers and administration, students. Geographic: Place of Residence:Manly, Northern Beaches, Greater Sydney Psychographic: Lifestyle:People who like to: go out, socialise, experience new cultures, experience new food, experience new drinks, travel and work. Behaviouristic: Dining Occasion:Everyday Benefits Sought:Quality, service, experience, convenience.

Loyalty:Moderate – Strong Usage Rate:Moderate Product Attitude:Positive The previous section demonstrates how La Barata has chosen to segment its core customers. These are well aligned with the profile of the inhabitants of Manly (See Appendix V). 5. 2 Branding ‘Brand equity is a set of assets and liabilities linked to a brand’s name and symbol that add to or subtract from the value provided by a product or service to a firm and/or that firm’s customers’ (Aaker 2001). It can be interpreted from the quote that a value creation is essential and that it often is created by a strong brand and brand equity, which in turn is created by the value added to the product.

Figure 5-2 demonstrates what a successful differentiation strategy should include. One aspect is to generate customer value. The other is to identify what the perceived value from the customer is. Creating a successful business is all about the customer which implies that they have the power of the future features of the business. The last aspect demonstrates that La Barata can generate a differentiated strategy by creating a product that is complex to copy. The service and atmosphere will distinguish La Barata from the other restaurants in Manly. This is what the last step in Figure 5-1 is about. Figure 5-2: Successful Differentiation Source: Aaker 2001 5. 3 Marketing mix The marketing mix is the parameters that the organisation can control, subject to internal and external constraints of the marketing environment” (Net MBA, para. 3, 2007). The combination of these is created to make a decision that has a perceived value from the target market. The term is old, but is still highly relevant and commonly used in textbook examples. Even though marketing today is more complicated, the industry still chooses to use this concept because of its simplicity (Net MBA 2007). Figure 5-3: Five P’s Source: Marketing World 2007 Price: The pricing strategy for La Barata is to be located in the upper level of the price range.

It will still be assumed that the customers will receive value when they visit La Barata; this is mainly due to all the other supplements that are included in the business concept. Value is created by delivering a consistent product of quality. Customer value takes time to create, without any value added it will take even longer to create a customer base. To perform a “Marketing-Stunt” in the opening period could help boost the value. For example, during the opening month the whole menu could be sold for 50 per cent discount. Creation of value would occur straight away, in addition the customers would have the opportunity to try the menu at La Barata and spread the word on “the grapevine”. A stunt like this would create a much larger customer base within the opening period.

Garfish, an established restaurant in Manly, did a similar stunt in their opening period which contributed to a fully booked venue from week two and onwards (Sarah Beeke, Operations Manager Garfish, Personal Communication, August 10, 2007). Product: La Barata delivers a product that is much more than quality food. This will be comprised by an atmosphere that the consumers want to visit again; an atmosphere that is desired to move to; a feeling of leaving the daily life in Manly and travel to Brazil. The aim is to simulate an authentic Brazilian experience for the few hours the customers spend inside the restaurant. This is what will differentiate La Barata from competitors and is also the reason why the restaurant will, after been operating for a while, achieve a customer base located all around Sydney. Promotion:

A restaurant needs to attain a good reputation in order to catch the interest of a new customer. The first sign of something that is worth a visit is a fully booked restaurant. One way of achieving this as quick as possible would be to adopt the recommendations mentioned in the ‘Price’-section, however there must still be awareness created for the product. The venue for La Barata will be located at Manly Wharf on the left hand side as walking off the ferry. Manly Wharf has between 8000-12000 travellers every day (Drew Blake, Salesperson, Manly Wharf, Personal Communication, October 28, 2007). This alone will create extensive awareness for La Barata, but it still requires attributes that the customers open their eyes for.

A sudden change always make people aware of things, as appose to something that is just being built over a broad time range. When Shore Club in Manly was built, it was covered up during the construction period, which made it impossible for people passing by to see what was built. The day before opening, the seal was removed and everyone could see the sudden change. Most people got curious enough visit the new venue or possibly discuss the new place within their circle of friends. This was a significant part of Shore Club’s success factor and is evidently a way of increasing awareness (Kieran Baily, Bar Manager, Personal Communication, October 16, 2007). Place:

The location will make it accessible for the customers located in Manly, Northern Beaches and the city in regards to buses, ferries and central location. The location is also in an area where there are other dining/drinking facilities; a lot of consumers go out to be among people and to be seen, this is all a part of the status La Barata is aiming to create. The location also reflects the price level that La Barata will be levelled at. 6. 0 Strategic Alternatives & Recommendations It is important to be aware that the industry might not be free of unexpected obstacles. It is easy to loose track of the focal point when planning for a future business.

Due to this the relevance of continuous updates of the business plan is increasing (Peterson & Jaret 2001). In addition the surroundings, environment and politics are not static conditions and will change over time. When starting a business these are all relevant factors to consider. Concluding the analysis conducted and strategies developed in this business plan, the strategic alternatives and recommendations will summarise the report. 6. 1 Concept To keep up with ongoing trends and satisfying customers wants and needs, La Barata might have to use a strategic alternative to factors such as focus and price. This would differentiate the need for market research and knowledge of consumer behaviour.

Another way of illustrating this would be the need to change menus, atmosphere and expand the business by transforming the restaurant into a bar at night time. Cooperation is a key concept for La Barata and they might have to expand their strategic alliances. If the dance school or the cooking classes turn out to be unexpectedly popular La Barata need to take advantage of this and expand this part of the business. In reverse La Barata is required to consider ending the alliances and cooking classes. As the trends shift in the society La Barata must be willing to further cooperate with related businesses. 6. 2 Location Due to Manly being considered an expensive location with high rents, La Barata might have to investigate the possibility of changing location.

To keep similar target groups and not to loose restaurant guests, nearby solutions can constitute of locations such as other suburbs where a reduction of high costs will be possible. However, the issue with changing the location would most likely be of negative impact for the business. A less dramatic move would be to move location within the Manly district; this could cut the costs and still attract the same customer base. 6. 3 Price and quality La Barata’s prime focus will be to offer high quality food, beverage and service. This brings the price to a higher level, a factor that La Barata might have to alter. La Barata will always strive for excellence but if the customers are not willing to pay the price, it would be required to lower the level of quality and price.

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