Discuss about the Entrepreneurial business practices at Jasmi’s in detail.
The report discusses the various aspects of a well-known that food service industry namely Jasmi’s that has been dominating the Kingdom of Bahrain since 1986. It started from a very small entrepreneurial venture in a particular region of Bahrain as a small business. The report has also discussed the business method of two internally well-known food companies such as MacDonald’s and Starbucks. These two companies have been exemplary in their entrepreneurial initiatives and followed by many other small business groups (Schrempf, 2014). The report compares Jasmi’s initiatives to those of Starbucks and MacDonald’s then discuss the process or models supported by the entrepreneurial theories so that Jasmi’s can improve their service. The report analyses the entrepreneurial theories, concept and frameworks which Jasmi’s can apply in their organization and thus gain more market penetration and brand value (Wach, 2015). The aim of this report is to discuss the ideas that these international brands use for expanding and surviving their customers which can be followed by the local entrepreneurs to gain popularity.
Jasmi’s was found in the year 1986, when its founder Jassim Al Ameen returned from the UK to his homeland Bahrain. He was then a fresh university graduate and accustomed with the western habits of food and culture. After he returned to Bahrain he found that there was a growing demand of western style of fast food and very few companies were present to handle this rising demand. Therefore, he decided that he would grab this opportunity by opening a family restaurant business. The name of the organization emblems his own name. However, Jassim ran this restaurant himself without any partners until in 1990 he younger brother Adnan Al Ameen returned completing his university degree from the USA. He stated helping Jassim and this partnership between brothers strengthen the success of the organization. Jasmi’s is famous for their experimental food which are very popular in Bahrain. Ameen brothers spent years by researching the food market of the country to create value for their customers as well as addressing their needs.
According to the founder Jassim Al Ameen, Jasmi’s was always passionate about serving quality food so that the customers experience new tastes and enjoy them at an affordable price. To him, “Persistency during a task execution is the key to success.” According to the vice president of Jasmi’s Corporation it is their staff who are the chief means of communicating the brand to their customers (Jasmis.com, 2017). Therefore, their mission is to provide training to their staff to the highest standard as it will ensure popularity. His vision is to learn from the previous mistake and working hard so that they can achieve success in future. Jasmi’s Corporation believes in acquiring the customer’s loyalty through best quality ingredients along with service. It is their mission to develop new ways so that it can sustain their business thus meet the growing demand of economy. Jasmi’s vision is to become the healthiest alternative in fast food restaurants in the country and mission is to become the first choice of the customers (Schaltegger, Lüdeke-Freund & Hansen, 2016). The operation revolves round the strategies to capture the customer loyalty by delivering exceptional services. It cares for the customer feedbacks for upgrading their performance.
Jasmi’s is basically a quick food restaurant which have 29 branches in all over Bahrain. It offers breakfast and snacks to the customers which include Burgers, salads and desserts. They have maintained an international standard of food and service which have provided them competitive advantage over their competitors through food. In their salads, deserts and other food, one can find touch of numerous cultures (Jasmis.com, 2017). In 2009, Jasmi’s has started to serve coffee along with their other food items. It offers warm rich coffee blends in their family friendly outlets.
The staffs of Jasmi’s Corporation undergo a rigorous training for improving their skills in all their departments. This training programs involve learning expertise in working in the back office, kitchen, front house services, health and hygiene maintenance departments only after which the employees are recruited as customer survive representatives. The organization has more than 1200 employees to whom training and development is very crucial.
Ideas and opportunities:
The company has been founded by Richard and Maurice McDonald at California in 1940. They started their restaurants as hamburger stand and had only 5 to 6 outlets. They opened a store in Arizona and used the famous golden arches logo in 1953. Ray Kroc was a businessman and joined this company in 1955 as franchise agent. After years of working with Macdonald brothers, he found out that these owners have no ambition thus Kroc would be unable to sell more multi-mixers (Mcdonalds.com.ph, 2017). He also noticed that the trend and demand for fast food is fast growing in the country and restaurants like MacDonald’s could have been the best place for serving people’s appetite. Therefore, in 1961 Kroc bought the brand form the owners and quickly expanded its outlet under franchising form.
The brand now has restaurants in more than 120 countries and serve 69 million people. During 1990s McDonald’s focused on the core brand as well as began divesting itself to other chains that the company acquired. The company retained a bulk of stake in Chipotle Mexican Grill till 2006. In this year McDonald’s completely divested from Chipotle through a stock exchange. From 1999 to 2001, the company had a small share of Aroma Cafe. Until 2003, Macdonald’s owned Donatos Pizza. Till 2007, McDonald’s had Boston Market and Sun Capital Partners. Macdonald’s has enhanced stockholder dividends for last 25 years that had made it one of the S&P 500 Dividend Aristocrats.
Management team:
Initially the company was only a restaurant chain operating only in Arizona and California. After Ray Kroc purchased the brand from the McDonald brothers, he established the McDonald’s Corporation and followed strict operational standards for all franchises of the brand. It included portion sizes, food ingredients, packaging, preparation. The standers of customer services were established very high though the franchise owners could make decisions to market their business (An, 2016). In 1968, Fred Turner was employed as the Chief Administrative Officer of the company and it launched 1000th outlet. Ray Kroc acted as the president and CEO till 1973. Since that year, this company was led by various presidents and CEOs until 2015. In this year, Steve Easterbrook the President and Chief Executive Officer of McDonald’s. Steve took smart decisions as well as risks which helped him to manage various disputes especially regarding the customers’ dissatisfaction. He re-concentrated on the basics of operating great restaurant chains and expanded the company in various markets (Nasution et al., 2014).
Unlike other food companies operating globally, McDonald’s has a C-level of executives for setting goals, making decisions, operations, finances in order to ensure smooth functioning of the organization (Wu et al., 2014). The company has top level positions such as CEO, CFO, directors, Board Chairman, marketing managers, sales managers and chief restaurant officer. Andrew McKenna, Sheila Penrose, John Mulligan, Lloyd Dean, Mary Georgiadis and Jeanne Jackson are these executives.
Strategy:
McDonald’s general strategies determine its primary approach for developing business as well as competitive advantages. It is the largest quick food restaurant chain that practises concentrated growth strategies for supporting its business development and expansion. The related strategic objectives guide the operative activities of the organization, particularly in responding the economic changes and operations of the competing companies. Market variations and changing conditions pose pressure on the company’s business adaption and reforming previous strategies. Therefore, McDonald’s growth strategies and generic strategies change time to time in order to ensure business viability.
The company’s primary generic strategies have been cost leadership. Their generic strategies involve minimizing costs for offering their products at lower prices (Zaridis & Mousiolis, 2014). For this reason, McDonald’s can offer products in relatively cheaper cost compared to its competitors.
This company utilises broad differentiation as subordinate generic strategy which includes the corporate development and its products for making them different from the competitors. For instance, through the McCafé products, the company applies its wide differentiation policy. Vertical integration has been a deliberate attempt allied to the company’s cost-leadership approach. For instance, it owns facilities which produce a standardized mixture of ingredients (Gerhardt, Hazen & Lewis, 2014). Cost minimization has been an economic strategic objective grounded on cost-leadership policy. Product improvement is associated with wider differentiation strategy of MacDonald’s.
Market Penetration:
The company uses the market penetration as chief intensive policy for inclusive growth. To apply intensive strategy, it grows by penetrating more markets where the company already operates. For instance, it has opened new restaurants in the USA as well as Europe by joint ventures, franchising and corporate ownership. MacDonald’s strategy is to expand globally through newer locations. Their generic strategy backs intensive growth strategy as low costs along with low prices empowers the company to penetrate new markets easily (Fayolle, & Liñán, 2014).
Market Development:
Initially, McDonald’s had used the market expansion as key intensive approach to grow. However, it has become secondary development strategy as McDonald’s has opened its restaurants in most of the developed countries around the world. Now, the premeditated objective for the intensive growth plan aims to launch new stores in new markets, for example new restaurants in Africa, Mongolia and some Middle East countries where the McDonald’s currently do not operate. Here also, McDonald’s use low prices to compete in new markets (Leekha Chhabra & Sharma, 2014).
Product Development:
The company uses product advancement as supporting intensive policy to grow. By relating this particular concentrated growth strategy, it develops fresh products, like those of McCafé products. The products are sometimes completely new products or variations of some existing products. The objectives’ aim is to reach more customers by enticing them towards these new products (Fayolle, Liñán & Moriano, 2014). This policy agrees with the company’s differentiation strategy which make MacDonald’s distinct.
Marketing plan:
The company attracts its price sensitive customers through it specific products that are value for money. Unlike Starbucks, MacDonald’s also aims to provide excellent customer service with high quality food. The company is following the brand marketing method where it is trying to create awareness about the health food habits thus earning trust of the customers on MacDonald’s own food products (Ala-Harja & Helo, 2014). They have brought changes in the categories of products that they used to sell once and included high quality healthy and fresh foods to its clients. In its various stalls, it has started to serve iced tea, sugar-free tea and drinks, salads, fruit juice and other healthy foods and beverages which are popular for low in calories as well as carbohydrates. Unlike other international food industries, MacDonald’s have concentrated in digital marketing aimed to concentrate on the young generation through various social media like Facebook and Twitter as well as its own website.
As the vision statement of MacDonald’s convey that the vision of the company is to become modern, advanced burger company that deliver a contemporary customer experience. to the company, modern is being a brand which is revealed through the present condition of the company and being progressive is to advance inclusively in the future. It is the customer expectation that provide fresh impetus to the organization as well as help in realising the commitments (Ghobadian & O’Regan, 2014). MacDonald’s promises to offer a great tasty food experience as well as high quality of healthy foods and beverages. It provides a world-class experience to its customers thus create a good reputation and positive image about the brand.
Business ownership:
The company’s business ownership is a franchise. It basically penetrates international markets through franchising. The company remains to be renowned as a leading franchising organization in the world. More than 88% of its restaurants doing business worldwide are retained as well as functioned by their Franchisees. MacDonald’s have more than 35000 outlets in more than 122 countries that serve more than 72 million people per day.
Ideas and opportunities:
Howard Schulz’s Starbucks Corporation is a coffee chain in America. this company is considered to be the chief representation of second wave coffee by differentiating itself from all the other coffee serving brands in the USA (Starbucks.com, 2017). This brand has characterised itself to be different by quality, taste along with unique customer experience. the legendary leader of this brand Howard Schultz is a titan in the corporate world and three times billionaire. Therefore, when he talks, Washington D.C and Wall Street pay attention.
The first Starbucks store was opened at Washington in March 1971 by three business partners Jerry Baldwin, Gordon Bowker and Zev Siegl. At that time were just college students in the University of San Francisco. They were inspired to start their entrepreneurship by selling high-quality coffee beans. Initially this company used to sell roasted whole coffee beans instead of brewed coffee that it does today. Gradually they served brewed coffee as free samples. During that time, they used to purchase green coffee beans from the coffee roasting entrepreneur Alfred Peet later bought directly from the growers (Pollock et al., 2015).
Opportunities:
During 1980s the total sales of coffee in the Us was fast decreasing but speciality coffee was growing therefore in 1984 the owners acquired Peet’s and opened six stores in Washington. It began to vend espresso coffee.
In 1987, these owners of the brand vended the company chain to its ex manager Howard Schultz. He rebranded his own coffee outlets with the name of Starbucks thus quickly began to inflate. In 1987 itself the company opened its first outlet outside Seattle in Vancouver, Chicago, Illinois and British Columbia by 1989. By the next year, the company was roasting over 907,185 kg coffee.
In June 1992, the opening public offering in the stock market, Starbucks had a revenue of $73 million that rose up from $1.3. in 1996, Starbucks opened its first location outside the USA in Tokyo, Japan. Within next two years, the company entered the UK market with more than $80 million USD acquiring 56 outlets of a UK based coffee company and rebranded all the outlets as Starbucks.
In 2002, Starbucks entered the market of Latin America in Mexico. Recently the city has more than 500 Starbucks stores and will be grown to 850 by 2018. In the same year the company started to trade in Lausanne, Switzerland for handling green coffee business.
Starbucks had established its outlet in Russia in 2007 despite of registering a trademark 10 years ago. All the coffee related business were controlled from the headquarter Seattle. In 2008, they acquired the manufacturer of the Clover Brewing System. The company began to test the fresh-pressed coffee system in most of the Starbucks locations in New York, Seattle, California, and Boston. During this year, the brand stared to collect feedbacks and ideas from its customers in order to bring innovation through a community website (Kirkpatrick et al., 2014). The company introduced a loyalty program for the registered users of the band’s gift card that offered perks. Next year Starbucks stated testing its mobile app through which the customers could access prepaid funds for purchasing products from Starbucks.
In 2012, Starbucks purchased Teavana and opened stores in Vietnam. In 2014, Starbucks decided to open stores in Brooklyn which would serve wine and beer. In the next year, the brand entered China and Italy. In 2016, it publicised a debut of its foremost original content series. It was named “Upstanders” that aimed to stimulate American citizens with tales of empathy along with civility. This series structures written word, podcasts as well as video. This will be dispersed via the bend’s mobile app, website and through Starbucks in-store digital networks (Rowley & McMurtrey, 2016).
Management team:
Howard Schultz is the chairman, CEO and president of the company. He has held the label of Chief Global Strategist and led the corporation in highest position (Tan, Oriade & Fallon, 2014). Schultz was the director of retail operations as well as marketing for Starbucks Coffee Company before he took the responsibility of entire brand. Robert Gates has been a director since 2012. The other directors are Mellody Hobson, Kevin Johnson, Olden Lee, Joshua Ramo, James Shennan, Clara Shih, Myron Ullman and Javier Teruel.
Strategy:
Product differentiation: One of the chief strategies which Starbucks tracked since its start was that its product differentiation. The brand offers differentiators like locations, premium product mix, coffee beverage reputation along with ultimate customer service which translated to the building of a best valued brand. Therefore, it is costly to emulate for the competitors (Hiatt & Sine, 2014).
Acquisition and alliance: Starbucks has monitored a perceptive strategy of smart acquisitions strategic coalition (Saeidi et al., 2015). Starbucks never followed the franchising model but operated only business oriented outlets along with joint ventures in the intercontinental markets. Starbucks made some chief acquisitions for instance Teavana for tea products, Evolution Fresh for juice produces, Bay Breads for premium bread for using the product diversification strategy. The acquisition strategy of Starbucks has been horizontal that follows product as well as market extension throgh acquisitions. In India Starbucks operates as Tata Starbucks Limited.
Expansion: Another crucial strategy that helped in the growth of Starbucks has been its global strategies of expansion. The company strategies to expand its business into the developed as well as emerging markets for geographically diversifying. It is highly successful with operating in more than 60 countries covering all the continents. All of these strategies derived substantial competitive advantage for the company over the competitors.
Marketing plan:
Starbucks is chiefly a first mover organization. It sees trends as well as interests of its target market primarily then adapt to meet the initial needs. In 2007, Starbucks observed that the customers desired to support such companies which have social responsibilities. Starbucks therefore, began selling Product Red goods. This enabled the supply of AIDS medicines for more than 30,000 people a year. Beside this initiative, other contributions of Starbucks, helped it to enter in the minds of its customers. For Starbucks it was undoubtedly difficult to keep adapting these changes related to its products, packaging and the most favourable atmosphere for customers for staying ahead in the competition (Hill, Jones & Schilling, 2014). The company took advantage of new methods of promoting the brand with growing usage of smartphones, digital media and social networking for new promotion techniques.
Business ownership:
Starbucks is a Seattle-based coffee chain. It has experienced the expansion at a large scale in the current years. The number of outlets have grown more than replication over the last decades to more than 25 thousand in 2017. In the United States the brand has 13,900 locations that is the largest number of Starbucks outlets in the world by far. It is the largest brewed coffee server also offering Tazo teas, pastries as well as other treats along with high customer satisfaction (Klotz et al., 2014).
Entrepreneurship practices of Jasmi’s:
Jasmi’s is one of the popular fast food chain in Bahrain that has more than 25 outlets in all over the country. The entrepreneurship practice of the company discloses the fact that the key priority is to serve a high quality food in low price so that they can have a strong competitive advantage more than the other quick food services (Izogo & Ogba, 2015). The chiefly focus on the customer satisfaction which will attract new customers in growing competition. The time it started its journey, Bahrain was not so westernised in aspect of food culture which helped the organisation to gain popularity in short period (Klotz et al., 2014). Now the time has changed therefore, the management style has disclosed some shortcomings which need to be improved.
Shortcomings of Jasmi’s and lessons from the exemplary brands:
Figure 1. Timmons’s model for entrepreneurial process
Resources: for venture growth the company needs to have an ample amount of capital. Jasmi’s management will be designing effective strategies based on the resources and control them accordingly. This will make changes to the venture growth (Lin, 2014).
Opportunity: Jasmi’s has a lot of opportunities for new ventures as the market in its neighbour countries are ready for this kind of services that the company provides (Bae, Miao & Fiet, 2014). It has opportunity for finding new products, consumer behaviours and food consumption trends. Jasmi’s can consider the growing demand for healthy food and introduce new organic dishes thus diversify the menu (Saleem & Raja, 2014).
Team: an integrated entrepreneurial team attracts investors therefore there is a strong ned for building effective team with necessary skills (Andrevski et al., 2014). This will be done through proper and motivational training so that the members will be committed, determined and persistent. The team in Jasmi’s will be indispensable part of new venture and led to success (Mason & Brown, 2014).
Conclusion:
Therefore, it can be concluded that Jasmi’s is a successful quick food chain operating in Bahrain. The company has understood the constant change of customer demand and adopted numerous transformation since its origin in 1990s. It has become a remarkable success in the food industry in the Kingdom of Bahrain. Its chief aim is customer satisfaction which has made the company an important identity but it has some organizational shortcomings which need to be attended. Its whole focus remains on the cleanliness and quality of food which obviously has created a loyal customer group but needs a technological touch to attract more people. The report discusses the methods through which the company will be able to penetrate ore market as well as strengthen its organizational structure.
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