Discuss About The Behavioral Control Formation Of Consumers.
A business venture can be defined as a startup business which is established by a single or a group of individuals with the intention of getting profited financially. A majority of the business ventures are created based on the demand of the market. Requirements of the consumers are identified for the products or services in order to deliver consumer specific services or products. This is done to enhance the satisfaction of the consumers. In this report, analysis of a restaurant business which is a new business venture will be performed. A brief description of the Restaurant business will be provided in this report. Along with that, the chief sources required for the mentioned business and the method of obtaining them will also be discussed here. The challenges and difficulties faced by the mentioned venture with respect to legal, technological, political, economic, environmental, social and cultural challenges have also being discussed in this report. The potential risks of the mentioned business venture will also be identified.
A Restaurant business chiefly involves preparation and serving of food and drink items in exchange for money. The ‘Yarri’ restaurant is a new restaurant which has been established by Chef Aaron Carr who is a well-recognized chef of Australia. The restaurant has been established in conjunction with the winemakers of Snake and Harring. In order to gain the loyalty of the local Noongar people, the menu of the Yarri restaurant chiefly features sustainably sourced ingredients. In order to provide a ‘close to the nature feeling’, the restaurant provides both outdoor as well as indoor dining (Yarri Restaurant and bar, 2018). While outdoor dining involves dining in a courtyard under a tree, indoor dining includes a dining room with limestone, terracotta, timber and leather finish.
In order to open the above mentioned restaurant, the help of three capital sources, namely, personal resources, partnership investment and commercial banks have been taken.
Personal resources: More than 60 percent of the capital sources that has been invested for establishing the Yarri Restaurant includes Chef Aaron Carr’s personal investments. He used more than 60 percent of his total savings for buying the plot for the restaurant.
Partnership investment: As is mentioned earlier, the business was open in partnership with winemakers of Snake and Herrings. The majority of the expense of the construction of the Yarri restaurant has been carried out by the mentioned wine manufacturing company (Ramos-Rodríguez, Medina-Garrido & Ruiz-Navarro, 2012). The partnership between the two organizations is a 50 -50 partnership. However, the investment of the Chef Aaron Carr is found to be much more compared to that of the owners of the Snake and Herrings Wine Company. Hence to compensate, the mentioned wine company has taken the responsibility of decorating as well as providing furniture in the restaurant.
Commercial banks: Chef Aaron Carr has taken a loan from the National Australian Bank for advertising and promotional purposes of his restaurant. Being a brand new restaurant, it is highly crucial to promote and advertise the business in order to attract consumers and thus enhance the consumer base of the organization. Several high-cost promotional tactics that include advertisement though digital hoardings across the country and celebrity endorsement have been performed. In spite of the high interest rate of the mentioned commercial bank, the loan has been taken to ensure effective promotion for attracting a huge amount of consumers.
Being a new business venture, the mentioned restaurant is supposed to face several challenges as well as difficulties while pursuing its business in Australia In order to access the external environment of the Yarri Restaurant, a PESTLE analysis has been performed below. With the help of the PESTLE analysis, the company will be able to access its potential challenges and develop effective strategies to overcome these challenges.
The political climate of Australia is highly stable. The political stability of Australia has contributed to the significant growth of the food industry in Australia and it is expected that by the end of the year 2018, the restaurant industry of Australia with representing approximately 32 percent of the total growth of the Australian food industry. This positive condition of the restaurant industry owes to the political climate in the democratic federal nation comprising six states and two territories. Australia is characterized by transparent legal actions designed to eradicate corruption. The political regimes of the country act as a shield for the food industry that protects it from any types of unjustified and uncompetitive practices through legislation. Thus it can be clearly understood no potential challenges are expected to face by the company due to the political environment in Australia (Oraman, 2014).
When it comes to export, import as well as foreign investment policy, the Foreign Acquisition and takeover act guide all these mentioned policies. Moreover, the Australian government has the authority to formulate the exchange controls as advised by the Reserve Bank of Australia. For Instance, the Yarri Company will require mandatory reporting for currency movement exceeding 10 thousand dollars.
The economy of Australia demonstrates an annual growth in GDP by 2.9 percent by the year 2015 (Chang, 2017). However, due to resent rescission the economic growth of the mentioned nation has got hampered. However, compared to the other developed nation, the economic condition of Australia is better. The sudden downfall of the Australian industry has imposed a negative impact on the food industry of the nation. This is because consumers are less likely to invest in restaurant and luxurious cuisines when they are suffering from financial crisis. Moreover, the existence of fast food chains has enhanced the difficulties for the restaurant industries to attract consumers during the time of economic crisis. The target consumers of both the restaurant as well as the fast food chain industry are the office going individuals. Due to the recession, the target consumers of the restaurant industry are switching their preference and opting to dine in fast food outlets to save both times as well as money (Chang, 2017). Thus it can be clearly understood that the second challenge that can be faced by the Yarri Company is the preference of consumers for quickly made and inexpensive food items. However, the fact that sudden fall of the economy has enhanced the unemployment rate in Australia, has made it easier for the restaurant organizations to recruit staffs at a lower cost. Thus, the Yarri Company will be able to enhance its number of labors as well as productivity by engaging more staffs at a lower cost.
The society of Australia is multi cultural. The nation presents an organized social movement aligned with its ethnic as well as racial inclusiveness. The history of Australia reveals its commitment to assimilate several cultural groups. This, in turn, has made the country the home of diverse individuals and depicts a cosmopolitan population. This multicultural society of Australia acts as a challenging factor for the restaurant industry of Australia (Kim et al., 2013). Due to variation in the taste, the restaurants need to have a huge variety in their menu lists in order to ensure consumer satisfaction and enhance the competitive advantage. Hence, the third challenge that will be faced by the Yarri Company is the huge variation in the taste of its consumers.
Another issue which is faced by the food industry of Australia includes the ageing generation of Australia. Since the number of youngsters an]d teenagers is comparatively lower than the middle-aged and elderly people, the restaurant industry is suffering from the crisis of efficient labors. It can be clearly understood that the efficiency, energy and skills of middle-aged or elderly staff will be much lower compared to that of the younger staffs. Moreover, since younger people are more likely to visit restaurants compared to elderly citizens, the ageing population of Australia can be considered as a major challenge to the food industry of Australia and therefore to the Yarri restaurant as well.
Being a highly developed country, the mentioned nation is technologically advanced. The technological advancement of the mentioned nation results in the cost reduction, the deliverance of high-quality services and wider connectivity to the supply and international market. According to a recent survey, Australia is considered to be the most connected nation after Singapore, Taiwan and South Korea (Oraman, 2014). Information and communication technology of Australia, that includes popular social media platforms and others, helps the restaurant industry to effectively communicate with their supply chain as well as with the consumers. Hence with the help of effective communication technology, the Yarri Company will be able to understand the specific requirements of the consumers through a conversation on Facebook, Linked In and other social media platforms. Another major advantage of the advanced technology of Australia for the restaurant industry includes the availability of high-tech machines and tools that reduce the need for employees in restaurants. As being discussed earlier, Australian restaurants are suffering from lack of efficient employees, the high tech equipment also help the restaurant to minimize the cost of recruiting employees (Chou, Chen & Wang, 2012). Thus it can be understood that the Yarri restaurant has no potential risks from the technological environment of Australia.
The restaurant industry of Australia gets highly affected by the legislative changes in the country since the restaurants require altering their operations from time to time to abide by the rules and regulations of the country. In countries with generous regulation and liberal principles conducting business is easier. Australia ranks lowest in regulation among the Organization for Economic Co-operation and Development (OECD) members when it comes to market entry barriers, foreign investment and telecom regulations (Suriani et al., 2015). Moreover, the nation comes second in liberal approach in the retail supply chain. The liberal approach of Australia reflects in the Australia-New Zealand Food Standards Code provisions that include additives, food safety, genetically modified foods and labelling. However, due to the low barrier for new entrance in due to liberal rules and regulation, the competition among the restaurants in Australia is high. Thus due to the legal environment of Australia, the Yarri restaurant have the risk to face a high competition in the Australian restaurant industry.
After the excessive pollution due to the mass emission of carbon dioxide in November 2010, the government has implemented strict laws and regulations to prevent further environmental pollution. Moreover, in the year, 2011, usage of plastic bags was banned in Northern Territory, Tasmania and South Australia. The decision was taken since plastics bags were found to harm wildlife and require valuable resources for manufacturing. Moreover, the Environment Protection and Biodiversity Conservation Act also look after the yearly emission of carbon dioxide due to the food industry. Hence in order to establish a business in the Australian food industry, the Yarri restaurant needs to abide by the environmental laws set by the nation.
Some of the potential risks of the Yarri Restaurant include
The health consciousness of the Australian citizens is preventing them to indulge themselves in fatty food items that are served in restaurants. Consumers are found to be inclined towards healthier food options. Moreover, due to the recession, consumers are found to be opting for food options that are cheap and easily available (Chang, 2017). Above all this, the high competition in the food industry in Australia enhances the risk of failure of the Yarri Restaurant.
When it comes to the restaurant business, frivolous lawsuits are major risks. Several examples are there where the restaurant owners are sued due to unsatisfactory services or behaviors offered to the consumers (Suriani et al., 2015). Hence, even if the employees and business of the Yarri restaurant are free from wrongdoings, there remains a risk of being sued by the consumers and compensate with expensive legal fees.
Conclusion
Form the above discussion, it can be concluded that the restaurant industry of Australia has the potential to enhance the revenue of the Yarri Restaurant. The high tech facilities and the supportive governmental laws will help the company to enhance its annual revenue. However, being a new business venture, the Yarri Restaurant may suffer from risks associated with the multicultural environment of the nation as well as the high competition in the food market. Moreover, there prevails a risk associated with the mentioned new business venture that includes frivolous lawsuits and risk of business failure.
Reference List:
Chang, R. C. (2017). The influence of attitudes towards healthy eating on food consumption when travelling. Current Issues in Tourism, 20(4), 369-390.
Chou, C. J., Chen, K. S., & Wang, Y. Y. (2012). Green practices in the restaurant industry from an innovation adoption perspective: Evidence from Taiwan. International Journal of Hospitality Management, 31(3), 703-711.
Kim, E., Ham, S., Yang, I. S., & Choi, J. G. (2013). The roles of attitude, subjective norm, and perceived behavioral control in the formation of consumers’ behavioral intentions to read menu labels in the restaurant industry. International Journal of Hospitality Management, 35, 203-213.
Kim, Y., Kim, M., & O’Neill, J. W. (2013). Advertising and firm risk: A study of the restaurant industry. Journal of Travel & Tourism Marketing, 30(5), 455-470.
Oraman, Y. (2014). An Analytic Study of Organic Food Industry as Part of Healthy Eating Habit in Turkey: Market Growth, Challenges and Prospects. Procedia-Social and Behavioral Sciences, 150, 1030-1039.
Ramos-Rodríguez, A. R., Medina-Garrido, J. A., & Ruiz-Navarro, J. (2012). Determinants of hotels and restaurants entrepreneurship: A study using GEM data. International Journal of Hospitality Management, 31(2), 579-587.
Suriani, I., Shamsuddin, K., Khalib, A. L., Hazizi, A. S., & Fadlan, M. O. (2015). Barriers to food quantity intake control and healthy eating among overweight and obese working Malay women in public service. International Journal of Public Health and Clinical Sciences, 2(3), 81-93.
Yarri Restaurant and bar (2018). yarri.com.au.Retrived from: https://yarri.com.au/
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