Strategic critical analysis of company business environment and competitive issues

Business Policy

J-Food has an opportunity to become the first one to shift in the "all-you-can-eat steak buffet" notion to grow into a market leader. The steady attractiveness of steak along with a perception of economy in buffet seems to be the perfect combination in foreign markets and is bound to produce the same results here (Clancy et al., 2000).

By analyzing the situation in the market, we have characterized groups into various subdivisions. The only exclusion comes when we characterize our subdivision for lunch. We strongly trust, and have observed, that a much widespread desire prevails for this lunchtime slot because our pricing is on the economical side and includes our J-Food's Specialty Beef burger. The following are our targeted subdivisions (Clancy et al., 2000).

* Age -- Aged, Baby-Boomers, youthful couples with children, and labor of all areas.

* Family Unit -- We will send requests to small families with infants or large families with kids under the driving limit. Mostly, our customers have families with two earners.

* Gender -- We are trying to evenly focus on both genders with a little favor towards the males because they are more likely to eat more red meat.

* Income -- We will plea to the higher-low level income families to everyone in the middle income stage.

* Occupation -- We will aim the labor class, youthful experts with a family, and majority of mid-America.

* Education -- We will target the high school alumni, or persons with some college degree

By our description, we will have a wide plea for our conception. It is our objective to become the first choice restaurant for majority of the Americans (Clancy et al., 2000).

Target Market Segment Strategy

J-Food proposes to provide to the bulk of mid-America. We prefer this group for many significant reasons. Primary and principal is the absolute size. With our eateries having a placement of around 400 persons, we will require a wide bottom and major requirement of the food accessories, parking and sitting space to accommodate them. It's our target to have an enough for everyone, every time (Joshi, 2005).

Secondly, it is an extremely important user group. In previous years, Americans ate out around 3.7 times per week (that means dining out on alternate nights). They are on permanent incomes and look for good relationship with respect to value for money (Joshi, 2005). Finally, this collection will see a significant expansion in their figures for the next 10 years. If we can carry on to fulfill the demands, we can observe same store enhancements for the same time period. We will nevertheless adjust according to their varying requirements and set of choices to sustain their allegiance. For majority of the part, this group of people is in a hurry because of time constraints, so our buffet approach suits their service perfectly (Keller, 2002).

The plan for lunch is two-fold. Firstly, we are offering brand new ground J-Food's Specialty Beef burgers to try to fulfill everyone's need for hamburgers in America. Mostly people deal with sandwiches for lunch, not elaborate lunches. About 50% of our hot meals will be substituted with cuts of tomatoes and onions, pickles and relish, and diced or whole lettuce. Our visitors will select their J-Food's Specialty Beef burger at our show area, along with melted cheese or chilly BBQ sauce, and self serve to the best French fries in the region because of our extraordinary mixture of spices. A freshly grilled succulent J-Food's Specialty Beef burger is too hard to resist (Keller, 2002).

Secondly, so as to vigorously compete in the fast-food business we aimed to maintain a lower price point in the lunch time. Presently at $12, our offerings are numerous and we are just over the QSR segment. Along with a variety of fast food items, our menu incorporates drinks, salad, sandwiches, fries, and dessert. We have decided to decrease the fast food variety in the dinner menu, which will be helpful in maintaining and aligning the food expenditures to reduced prices. The motive of this tactic would be to create a winning situation for us in preserving our core market segment along with expanding the customer base in the lunch time to incorporate teenagers, professionals, and singles (Lenskold, 2003).

Market Needs

The targeted market faction which we selected is observed as favorable by J-Food. According to a latest Consumer Reports on Eating Share Trends (CREST) survey, following are the necessities on which we will accentuate in J-Food (Patterson, 2008). Our established core faction:

* Looks for strong value.

* Requires assortment along with taste in the menu.

* Gives importance to swiftness in providing service.

* Requires a dining experience full of entertainment.

* Persists on formulating a dining environment entailing the attributes like cleanliness, friendliness, and attractiveness (Philip, 2008).

Market Survey

After seven months since the commencement of second steak buffet restaurant; a market analysis was performed in the month of February of 2000. Nearly 505 customers belonging to the vicinity of the restaurant were asked to give their opinion regarding the experience they had there, and rate it accordingly (Ries and Trout, 2000).

Service Business Analysis

In America, a swift expansion has been witnessed over the past twenty years in restaurant industry and presently it is approaching towards the life cycle's maturity stage. Nowadays numerous elements played their part in the expansion of consumer demand of top-notch restaurants in America. Prevalently, the number of household incorporating more than one wage earner has augmented which has consequently affected the pattern of buying behavior; along with this individuals thrive for additional spare time so as to socialize more effectively (Schultz and Kitchen, 2000). Hence, the competition has become stiffer and demanding as quite a large number of restaurants compete for attaining greater profit margins as compared to their competitors. According to the present scenario, the restaurant businesses which are strong and sturdy enough to tackle the challenges will be able to preserve their existence and surely will flourish (Allen et al., 2000).

In the wake of such a severe competition, restaurant businesses willing to progress will have to endeavor in formulating distinguished and unique practices so as to have a competitive edge on the competitors. The J-Food's founder comprehends this necessity of distinguished and unique practices, and has a strong conviction that the combination of steak along with buffet is a distinctive idea and will lead to success. The reality that none of the national chain ever came into this notion provides us an opportunity and access to a revenue generating niche of this market (Betts, 2000).

Competition and Buying Patterns

The year 1999 proved to be a flourishing year for restaurant industry, when the consumers augmented their consumption even though the restaurants not performed to their fullest potential. The consumers were not propelled by promotional tactics instead they made their buying decisions purely on their instincts (Carter, 2000). The management of restaurants acted prudently as no additional unit was erected which did not happened since early 1990's. Even though the American market tackled hardships throughout that year but at the end of the year things shaped up well for the year 2000 (De Figueiredo, 2000).

The growth rate of GDP-Gross Domestic Product escalated to four percent and it finished strongly at the end of the year. The disposable personal income as compared to the last two years escalated at a slower rate. The CPI-Consumer Price Index ended at two percent and unemployment rate persisted to lessen during the year (De Figueiredo, 2000).

Sustainability of the current upward trend in the economic conditions is one of the most important concerns of the workers working in restaurant industry. As we have seen in 1998, the growth rate dropped to zero after a rapid growth in restaurant business. Since the recession of 1990, after a very long time this was first time that there was no growth in the total number of restaurants (Deutsch, 2000).

While looking at chains, the ones which have small chains, which have less than 99 units, saw decline in their unit counts; whereas, the ones which are more aggressive were able to maintain their numbers between 100 to 500 units (Deutsch, 2000).

Conventional behavior of operator community might have resulted in an unexciting year for restaurant industry, but that was not the case due to the fact that the consumers, no matter what, kept buying foods prepared by restaurants. In the year 1999, per person rate of the number of snacks and meals bought from restaurant had been up to 158 per year which is indeed nearly half of a year (Elliott and Rutenberg, 2000).

Due to rise in both guest check and traffic counts; there has been a 6.5% increase of consumer spending in restaurants. In 25 years of CREST's history, this has been the most longest and strong expenditures growth for restaurant industry (Elliott and Rutenberg, 2000).

To conclude, year of 1999 was the best for restaurant industry. There was an increase in sales and consumers, whatever the situation was, customers continued to come to restaurants. Due to growth in different segments and categories there was an improvement in sales and they became financially stable and healthier (Elliott and Rutenberg, 2000).

Industry Marketing Overview: 1999

Marketing was mainly focused on two things that are quality and value in 1999. Few different elements like chains approached advertising and experienced an increase in creativity to differentiate for competitor in the market. Their main focus was more toward customer service and satisfaction (Elliott and Rutenberg, 2000).

In the year 1999, whatever message was tried to be conveyed through advertisements, consumers perceived that there were less deals on offer in that year. This perception has sustained into the following years. The point is that the trend had stretched and still continues to go and consumers no more perceive a combination of meal and a $19 sandwiches as a deal. So this is not a case that operators are offering less deals. Advantage to this is that consumers are now more sensitive toward special deals and when ever new deals are introduced they are more inclined towards that offer. On the other hand, the disadvantage is it is very hard to come up with a price range which is more appealing and attractive than $19 (Elliott and Rutenberg, 2000).

Restaurant Industry Long-Term Future

As it appears for the current situation there would be two things that may have happened in restaurant industry. First, it is most likely that they may have limited resources which would result in less expansion in contrast than what we have seen in early 1990's. Secondly it is most likely that there would be rapid increase in demand of both snacks and prepared meals. Well-developed and managed restaurants have not been that successful and given the kind of importance that has been given to dot-coms in past years. There is very little that can be done to attract capital to the industry in the way we have seen in 1990's. One of the reasons that restaurant operators will remain in their same mindset is due to minimal or no interest of financial institutions and markets toward the industry (Gulati and Garino, 2000).

The managers have been thinking of the successful ways to earn more profit from real estate than they already get. In order to achieve that, amongst other ways, the one most suitable is to increase the prices. This has brought success to them for the last two years and it has promising results in the future too. Moreover, they probably want to explore new entities of the business like initiating breakfast facility, altering the taste of food, giving the facilitation of delivery. These plans can bring about a visible change and innovation in the present outlets with the help of the production firms (Gulati and Garino, 2000).

From many years the customers have been spending almost 5% of their personal income to be spent on the food apart from their homes. So, they are playing their role efficiently. This number of 5% is the same since 1930. Keeping this in view, you can deduce that spending in this regard will remain the same if the incomes aren't raised. As we are expecting that incomes will be raised, we can also anticipate 3%-5% increase in growth. Everyone can be accommodated only if the resources, i.e. people and money, are on hand (Gulati and Garino, 2000).

Meeting Tomorrow's Needs

The optimistic news is that Gen Y and Baby Boomers are roughly equal in size. With both of them excelling so much now, our commerce shall have to put more into their taste to keep on taking profit from them. The current age bracket will have tastes and concerns different from the people before them so the market will have to modify itself (Hansell, 2001).

A steady development and change in the menu is expected. Tex-Mex, Italian and Mexican will boost in the coming time. Spicy and hot foods will keep on raising their importance. Asian and Chinese foods will be trademarks of future. There are a couple valid reasons for the modification of menu and increase in the temperature of food and they are: 79% of teenagers love to try innovative recipes and 81% of teens currently present like highly spiced food (Hansell, 2001).

Increased inclination of family gatherings and food will be observed. The coming generation will like to dine with family more and more. The future of Gen Y as depicted by them is more strained, having increased free time and giving more concern to fun. They are fond of conversing with the consumers, a healthy light surrounding and observing the food being cooked according to what has been ordered. The current generation is well aware of brands and is very faithful to whatever they like (Hoffman and Novak, 2000).

Selecting a proper staff will propose itself to be a major problem in coming times for the industry of restaurants. Merely employing a worker isn't difficult but to hold onto him/her is also a problem (Porter, 2001). The right buttons should be determined and pressed by the J-Food service operators, so that the retention process of tomorrow's worker can take place, because it is totally dependent on their marketing skills and customer service abilities (Porter, 2001).

What will be the right buttons to push?

Alternatives that are boundless

Immediate satisfaction