Discuss about the Hospitality Management for Industry in Restaurant Business.
Hospitality industry regarding food and beverages industry in restaurant businesses in almost every country is one of the most important as well as huge workers in entire countries. This industry achieved maximum standards of works from its workers (Chang &Kleiner, 2007). Workers opportunities are available highly in this industry but still potentiality and capability is necessary for personality standard in every field. Food and beverage industry in the hospitality sectors is a huge business sector for the Australian economy basically in employment as well as in financial contribution. Food and beverage processing is actually Australia’s most huge and broad manufacturing industry. This paper willhighlight various aspects of food and beverages industry in hospitality sector as well as competition policy regarding Baxter Inn Bar cum Restaurant which is one of the most popular restaurants in Australia.
Baxter Inn uses Competitive advantage as well as Value Chain Analysis in order to meet their strategic objective and motives (Knowles & Hartwell, 2002). Competitive advantages are situations which ensure the organization for producing products and services at a low amount or in most desirable trend for customers. These situations ensure the productive object for generating maximum sales margins than its competitions. Competitive advantages are credited to various factors which contain brand, customer support, cost structure and quality of product.
Competitive advantage for Baxter Inn restaurant does not means only surpassing what competitors can perform but at the same time it also means discovering what customers need as well as profitably satisfying and at the same time expanding their expectations (Knowles & Hartwell, 2002). Because of barriers to international, trades have declined and therefore access to products or services has developed. Under developed competition as well as increasing customers’ expectations, the firm’s consequences for satisfactions become even huge. For prospering and surviving in the business companies should meet at least two criteria firstly, they should know what consumers want to buy and secondly they should survive competition (Young, 1999). Competitive advantage regarding products and services in Baxter Inn receives two possible forms. Firstly, differentiation advantage i.e. if customers observes a commodity or service as superior then they become more willing for the payment of premium price which is related for the payment for competing offerings. Secondly, low- cost advantage, in which customers gain while the firm’s total costs weakened that of its regular competitor.
Differentiate advantage occurs in Baxter Inn Bar and Restaurant, when customers observes that the industry unit’s product offering is actually of maximum standard which incurs low risks (Oliveira &Huse, 2009). The organizations appreciates cost advantage if its total costs are low than the market average. This cost advantage allows the industry to perform one of two things i.e. price it commodities and services lower than its competitors for gaining market share as well as maintain recent profitability (Garcés, 2001). Various sources of cost advantage contain access to low- cost raw materials as well as distributions channels.
Value chain is the whole range of functioning which comprises of marketing, design, productions as well as distribution. Every business runs for bringing a commodity or service from beginning to delivery (Singh, 2008). For the organizations which produce commodities then the value chain begins with the raw materials utilized in order to create their goods as well as includes everything which is improved before it is sold to consumers. Value chain analysis depends on the basic economic principle of benefit i.e. firms are better served by implementing in industries where they have a related productive benefits in comparison to their competitors (“Bar and restaurant staff are regularly overexposed”, 2002). In order to conduct a value chain analysis in Baxter Inn Bar cum Restaurant, the firm starts by observing every portion of its production method as well as observing where stages can be deducted and at the same time development can be implement. These developments can effect in improved productive capacity and cost savings. The final effect is that customers receive high benefits from the products for the cheapest amount that develops the firm’s bottom line in long-term life (Nakhla, 2006). The phenomenon of implementing all above performance, so the firm can be appropriately analyzed is actually known as value chain management, which is the important key factor that is used by Baxter Inn.
The bar and restaurant industry is very competitive in nature and adding a competitive advantage on it requires a detail examination of the demographics of surrounding environment and also the analysis of the nature of existing competitors. The value chain analysis for one of the best bar and restaurant in Sydney, Australia of The Baxter Inn indicates a sequence of procedures that are part of the regular operations of the business. The process leads to growth of the competitive advantage to Baxter Inn to the other competitors of the industry. The company has never hesitated in adopting successful strategies for its competitors. The primary and support procedures of the company that gave it a competitive advantage over others is described below:
Infrastructure:
The layout of the restaurant is set in a sprawling area of land in the city and gives an ideal option for having a fine-dining experience. The location of the restaurant is also in a wonderful place and has been successful in portraying attention, interest, and attracting foreign tourist and domestic peoples (I. Buchin, 2012). The restaurant has become popular in Sydney and is also used for many social occasions. The layout of the interior of the restaurant is beautifully constructed and is very spacious and comfortable for customers. The restaurant has a royal and surrounding with the mixture of current generation designs. The restaurant is also laid out with beautiful gardens with the art of design and decoration.
Technology:
Baxter Inn has successfully implemented modern technology in its production system as well as does examination for its target market (“Technology”, 2006). The company has successfully gathered the required data regarding its target market and operational information in the restaurant is exchanged in a unified manner. The restaurant has implemented modern booking system i.e. its internet booking service and have developed customer relationship management. This function has leaded the company to be effective in its main function of collection, examination and development of its relationship with its targeted and loyal customers (“Technology”, 2007). The customer relationship management of the Baxter Inn has positively integrated with the technology.
Logic for guests:
The customer relationship management of Baxter Inn gives their management a dynamic access to their customer base. It has enabled the respective restaurant to identify and provide better service to their loyal and most valuable customers and also in understating their customer profiles (“Honored Guests”, 2013). It has also helped the company in understanding the activity of micro-markets within their targeted markets, so that right offer can be sent to the right customers. Baxter Inn aims in customer service.
Hierarchy Policy:
Baxter Inn, in order to run a proper bar and restaurant, uses an organizational structure with a clear grading in place (Peters, 2013). As the bar and restaurant is highly competitive market and has a disreputably high turnover rate mainly in its front employees, the company has made best policy in which the workers are assigned to dedicate its work in their specified department.
Location:
A superior location can beat other company by enhancing sales. Baxter Inn outlet is at a good location; it is easily accessible to everyone and is convenient for shoppers. The managers have furnished the layout of the restaurant in such an area that it defends itself from other competitors.
The VRIO Analysis of a company is an analytical technique of it, in which every resource are considered as well as of its competitors. The VRIO stands for Value, Rareness, Inimitability, and Organization. The VRIO framework of Baxter Inn provides it with great competitive advantage and is a part of strategic scheme of the enterprise. It falls under the internal analysis of the company. The value of Baxter Inn enables it to manipulate its environmental issues. The recipes of the restaurant are offered at reasonable price with quick service, and thus add in increasing the value of the firm. Baxter Inn also provides some of the rarest continental dishes which are not served by every Australian restaurant. The respective restaurant has years of experience, and is one of the Australia’s recognized bar and restaurant. The individuality of Baxter Inn has a great level of awareness, making other companies to develop their inimitability. The company provides the services to its customers in an organized way, and is market leader in standard dishes. The VRIO framework of the company has let it to gain sustainable competitive advantage.
Cafes, bars or restaurants providers are the most important part of Australia’s economic fabric. Australian competition policy is actually important in order to protect the interests of restaurants organizers while engaged in the industry transactions. Food and beverage organizations are competing based on the distribution of desirable, standard as well as finished goods better than their competitors (“Food, beverage membranes worth US$230mn by 2011”, 2006). Small food and beverage sectors in Australia are much effective at beating out their competition in local markets by growing popular goods as well as assure their processes are efficient. The food andbeverage industry in Australia is an extremely competitive industry where producers are competing to improve same alternative commodities for customers.
Organizations faces double pressures from the competitors as well as from the customers, which actually create producers, lower their amount. Customers demand for more and more varieties, healthy and tasty foods and along with that they also want maximum value goods for the same amount. Customers are shifting their food preferences to much healthy, natural as well as organic food. The food and beverage industry’s development is relies on population, consumer’s tastes and preference. Food and beverage organization are continuously challenged to enhance their development chances in a competitive market. Enhancing competitive pressures, management of cost as well as motivating talent are facing challenges in the industry (“MC2 market & competitive convergence”, 2002). The industry survives competition as well as has competitive benefits which mean company potentiality to gain consistently in the long term in the competitive situation.
Organizations in the food and beverage industry are facing with an enhancing health conscious. New customers demand companies to implement new technologies for creating innovative goods, improve more interactive as well as associating with market campaigns and also develops their potentiality to gathered important visions from the statics they gather. Now customers become enhanced health conscious so organizations provide low fat products are likely see a competitive benefits. One of the most important innovations in the industry for competitive advantage is by using of manufactured particles performs as enabling organizations to lower the fat. Firm also focuses on driving innovation by quick goods development as well as commercialization. For accomplishing many more quick innovations cycles, the industry are starting alignment partnership with entrepreneurs. Moreover, product innovations, food and beverages firms are observing innovations in their manufacturing phenomenon. Innovations in sensor tags are even helps firms to develop productivity. Furthermore, product innovation, industries in the food and beverage industry are also begging to leverage tools and techniques to adopt more insight within customer behavior as well as develop the effectiveness of marketing.
As a bar and restaurant operator, management of Baxter Inn know the importance of keeping their food costs in line. Food and beverage cost account for nearly 70 percent of the total revenue of the company. Preparing and designing an efficient menu shouldn’t be a random and guess-and-check progress. The preparation of a menu requires information about the customer physiology and most importantly needs analysis of restaurant food costs, menu item costs, and contribution margins (“Menu engineering for assisted-living elderly: a public health imperative”, 2012). With an overall view of the menu item profitability and popularity, restaurants can identify which items donate more profits and which items are holding their restaurant back (“Growth on the menu for food and beverage membranes”, 2006).
Contribution Margins
The perception of food cost percentage which is derived by dividing the cost of the ingredients to its menu worth is the most preferable option for implementing valuable cost in controls. The concept of contribution margins is the base where the menu engineering starts. Baxter Inn has effectively implemented contribution margins in the preparation of their menu.
Popularity of menu items
When a contribution margins tells us about how much profit each menu items contributes in the cash register. Baxter Inn knows how popular item of the menu is important to determine the total revenue. Menu engineering thus takes every menu items input margins and its popularity to conclude the different categories of the menu.
How profitable is menu engineering
The management of the Baxter Inn knows how to calculate the food cost for each item. However, examination of food cost analysis id so much important that if any restaurant wants to make sure that it doesn’t losses its money every time. Baxter Inn has successfully implemented strategies that calculate the food cost and margins for the specific menu items within the menu of the restaurant (CHONG & LAM, 2013). The specific restaurant has listed all the ingredients needed for a specific dish and also calculates the cost associated in a specified dish. The restaurant generates its menu items food cost by adding the cost of each ingredient and purchasing costs. Menu engineering helps in calculating the food cost percentage and also the contribution margins and most importantly profit in each of the menu items.
Various different companies in world of commercial business normally fail to accomplish their motives and objectives targets which help in order to develop trendy commodities for sustaining competitive advantages. The firm’s motives and objectives in order to develop profitability as well as revenue for the company fail because of inappropriate planning. Sustainable competitive advantage is the hugest outlet of an industry. It enables the organization for improving as well as maintaining its competitive rank of the market. Based on the analysis as well as research, there are mostly five type major stages which help Baxter Inn in order to develop competitive advantage.
Developing brand loyalty: customers normally carry on along with the Brandon which they receives their trusts and loyalty with. Baxter Inn targets to increase its brand loyalty with their consumers.
Constant innovation: Baxter Inn keeps their menu upgrading, so that it could be compatible with the market.
Bonus and Discounts: Long term relationships with the customers are advantageous for almost various companies as well as industries. Baxter Inn attracts and drives the minds of their customers for entering within a long term relationship with them by offering discount.
Pricing strategy of the company
The price that Baxter Inn charge for their menu items is the most vital decision regarding business which the management of the firm has taken (Swanger, 2002). The planning as well as setting of the price that is high or at the same time low will be responsible for the highest of development commercially (Su & Bowen, 2000). There have been numerous varieties of aspects of restrict the price of Baxter Inn still the major important pricing approach is centered on the motives as well as on the situations of the market.
Conclusion
From the above study it has been derived that food and beverage industry in the hospitality sectors is a huge business sector for the Australian economy basically in employment as well as in financial contribution. Food and beverage processing is actually Australia’s most huge and broad manufacturing industry. Competitive advantage like differentiate advantage and low cost advantage used by Baxter Inn helps to meet the strategic objectives. Food and beverage industry uses value chain analysis for meeting their strategic objectives.
References
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