Innovation and Enterprise Strategy

Question: Discuss about the Innovation and Enterprise Strategy. Answer: Summary of Market and Overview of Industry Restaurant industry of New Zealand has experienced a price increase in the year of 2014 on most of its menus because of escalating costs. Especially the labor cost of the country has seen a minimum increase along with other costs such rental premises cost, electricity and ingredient cost. Therefore, the restaurant industry of the country experienced a down fall in the year of 2015. That is the reason that most of the restaurants in the country are trying to implement innovative ideas and structures to attract customers (Smith et al., 2014). In the New Zealand restaurant industry, the independent full-service restaurants are dominating the landscape with 96% of sales. Therefore, if an organization is planning to open an restaurant in the country they will have to build structure in an independent way. Business Plan The business plan of Bowling Grill is unique and innovative. The organization is planning to build a restaurant with the facility of playing bowling. The concept would be, any customer will be able to play bowling game and will have a chance to throw three times. For this, they will have to purchase a ticket worth 100$. Within those three chances if a customer can knock down all the ten pins, he will have a flat 80% discount on whatever he buys on particularly that day. Owner Nicholas Stevenson, a famous chef and a bowling player by hobby decided to leave his job and implement this innovative idea in reality. The Customer The organization will target mostly young people of the country, as the bowling game would be a nice feature to attract them. However, the organization will also keep their strategies open for middle and old people. The issues The biggest issue of the organization would be increasing market price of food ingredients, which has forced them to keep the prices of the foods high. However, most of the food items are offered at a lower price than existing organizations. Another issue faced by Nicholas is low capital, which is preventing him from building the most important bowling parlor. The market Demographic As Sweeney et al. (2016) mentioned that, demography of customers can be analyzed with the help of various factors such as age, marital status, income level and sex. According to Navarro (2015), analyzing all these factors can help a restaurant to understand the eating habits of the peoples who live in the trade area. The restaurant Play and Win is planning to work in the market of Auckland. The restaurant will mainly focus on the age group of 12-30, as most of the customers in this age group like to enjoy bowling and having fast foods and drinks (Sacks et al., 2015). The restaurant will mainly target families that have children because children always like to have fun of bowling and eating (Tsimonis Dimitriadis, 2014). They will force their parents to come back in the restaurant. The target market of the restaurant is mainly belonging to the lower-middle level income bracket. Competition Thee new restaurant business has to face intense competition in Auckland. There are various restaurants in Auckland, which has provided authentic and romantic dining experience along with delicious foods. As Elfenbein et al., (2014) stated that, there are various restaurants such as apero, Bracu, Cassia and Clooney, which have high brand image in Auckland. However, the rapidly expanding business environment and industrial capability of Auckland has given Bowling Grill restaurant a chance to gain their own market position. Besides, their innovative idea of providing bill free food to the winner customer is another attraction, which will help them to gain competitive advantages (Navarro, 2015). Price Pricing strategy of Bowling Grill restaurant will be kept as low as possible to gain competitive advantage over its rivals. Low pricing strategy like Wal-Mart will be used for two purposes (Laroche et al., 2013). One is to attract customers and other is to keep other restaurants out of the business. Most of the restaurants that will be unable to provide products on such low price will have no option but to close their business. Promotion As a promotional strategy, the restaurant brand will use mostly online promotions through Facebook and Twitter. According to Navarro (2015), on average 2.5m people of New Zealand are using Facebook per month (Forbes et al., 2015). Over 2m people are using Facebook every day and 1.6m people are frequently using mobile phones to access Facebook each day (Kwok Yu, 2013). This clearly states Facebook is a very popular social networking site. Therefore, it is suggested that Bowling Grill can Facebook as their primary promotional strategy. Product With 14,000 kilometers of coastline, seafoods are very popular in New Zealand. Therefore, most of the seafoods will be present in Menu of Bowling Grill restaurant. On the other hand, Beer is considered as the most popular drink of the country; therefore, customers will be able to have several brand of beer in the restaurant (Williamson et al., 2012). However, the primary product of the restaurant would be its Bowling game parlor where customers will compete for free meals. Business structure and operations The Bowling Grill Restaurant will be formed as a sole proprietorship of Nicholas Stevenson. The restaurant will hire experienced accountant in order to maintain the books. In addition to that, Nicolas Stephenson is highly experienced executive chef from various multinational 5 star restaurant chains. This way the experience of Mr. Stevenson will be most effective for achieving the success of the organization. Moreover, Mr. Stevenson has been passionate bowler in his early life. The Bowling Grill Restaurant is a unique combination of sports restaurant where the organization will offer the customer to win a huge amount of discount by bowling in the restaurant. However, the owner of restaurant organization will be depended on the finance from the external sources. Nicholas Stevenson is the ultimate decision maker in respect to the operational activities of the restaurant. He is also most responsible body for directing the business activities in proper path. Mr. Stevenson will not be involved in the day to day business. In order to properly maintain the operational activities Floor Manager will be employed. Floor Manager will be accountable for deciding the daily operations of Bowling Grill restaurant business. The major responsibility of the Floor Manager will be employing, training as well as monitoring the staffs. The efficient and experienced staff support will be most helpful for operating the smooth operation in Bowling Grill restaurant (Hoque, 2013). The Floor Manager is required to maintain the legal necessity of the restaurant. The Floor Manager will be responsible to maintain the front of house operation in the restaurant. The front of house of the restaurant consists of several services such as servicing, bowling activities, along with interacting with customer and handling complain of customer (Hofer Scuderi, 2016). Whilst the Floor Manager will handle the front of house, the Executive Chef will operate the back of house. He will be most influential for processing the food as well as maintaining the supply of ingredients of the entire company. The Executive Chef performs the actual hiring as well as training of the employees in the kitchen. In addition to that, the executive chef will be greatly efficient for developing the attractive menu items for the customers as well as purchasing foods and ingredients. In this particular context, Bowling Grill Restaurant will be highly inclined towards the pyramid structure of the organization. The pyramid shape of the organization will be most effectively help Mr. Stevenson to distribute the work to the employees in a crucial manner. Flow chart of operations Figure 1: Flow Chart of operations for Bowling Grill (Source: Author) Financial forecast Cost Benefit Analysis using Present Value (ENOC Group) Benefits of option Year 1 Year 2 Year 3 Year 4 Year 5 Improved working $ 20.00 $ 30.00 $ 40.00 $ 45.00 $ 50.00 Improved savings $ 4.00 $ 6.00 $ 9.00 $ 12.00 $ 20.00 Total Benefits $ 24.00 $ 36.00 $ 49.00 $ 57.00 $ 70.00 Costs of option Year 1 Year 2 Year 3 Year 4 Year 5 Additional costs $ 130.00 $ - $ - $ - $ - Development costs $ 5.00 $ 8.00 $ 8.00 $ 3.00 $ - Maintenance costs $ 10.00 $ 20.00 $ 20.00 $ 20.00 $ 20.00 User time during implementation $ 10.00 $ - $ - $ - $ - Operations costs $ - $ 8.00 $ 4.00 $ 4.00 $ 4.00 Total Costs $ 155.00 $ 36.00 $ 32.00 $ 27.00 $ 24.00 Net benefits/costs $ (131.00) $ - $ 17.00 $ 30.00 $ 46.00 Cumulative benefits/costs $ (131.00) $ (131.00) $ (114.00) $ (84.00) $ (38.00) Net benefits/cost (NPV @ 5%) $ (124.76) $ - $ 14.69 $ 24.68 $ 36.04 Cumulative NPV $ (124.76) $ (124.76) $ (110.08) $ (85.40) $ (49.35) Table 1: Financial Forecast (Source: Author) Figure 2: Graphical Representation of financial forecast (Source: Author) Summary of the research From the research, it is clear that the business plan taken by Nicholas is absolutely new and innovative. Most of the customers will have a go to bowling parlor with a hope to win an 80% off ticket. This will help the restaurant to attract customers of any age and class in the country. Goals and action plan Outline Number Task Name Duration Start Finish Predecessors 1 Action plan for Bowling Grill 280 days Tue 12/1/15 Mon 12/26/16 1.1 Implementation of Business plan 2 months Tue 12/1/15 Mon 1/25/16 1.2 Developing bowling parlor 3 months Tue 1/26/16 Mon 4/18/16 2 1.3 Testing the parlor 40 days Tue 4/19/16 Mon 6/13/16 3 1.4 Developing other products including drinks corner 3 months Tue 6/14/16 Mon 9/5/16 4 1.5 Marketing and promotions in the market 40 days Tue 9/6/16 Mon 10/31/16 5 1.6 Launching the restaurant 40 days Tue 11/1/16 Mon 12/26/16 6 Table 2: Action Plan (Source: Author) Reference List: Elfenbein, D., Fisman, R., McManus, B. (2014).Market structure, reputation, and the value of quality certification(No. w20074). National Bureau of Economic Research. Forbes, S. 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