International Journal Of Physical Distribution: Steakhouse Delight Innovates Restaurant Experience

Innovation

Discuss About The International Journal Physical Distribution.

Steakhouse Delight is one of the most reputed fine dining restaurants that is located in New South Wales Australia and the owner of the restaurant is Statham Family. Currently Nick Statham is running the business being the representative of the family and is aiming to build a huge reputation of the organization in all over Australia and also aiming to expand the business in the market of New Zealand in near future. Nick Statham gained huge popularity in the market of New South Wales as he introduced many new rules and regulations in the business organization to enhance the service quality and the quality of the food and the beverages served in the restaurant. He understood the fact that being a hospitality business organization, he should stress on the quality of the service and the quality of the food products in order to sustain the business in a market full of rivalries.

In order to sustain the business in the market full of uncertainties due to rapidly changing demands of the target customers and also due to fierce rivalry in the hospitality business, Nick Statham decided to introduce the age old restaurant as a new molecular gastronomy pub in order to retain the popularity of the organization in the tough times.  Molecular gastronomy can be looked at as a sub-discipline of food science that focuses on the chemical and the physical transformations of the ingredients of the food while cooking. This sometimes enhances the nutrition of the ingredients and majorly used to make the food more presentable along with making it more artistic and technical.

Nick Statham before renovating the family business organization studied the market of operation and decided that for achieving success the target customer base should be of the age group of 20 to 45 as the type of services and the décor they will be providing to the customers is best suited for that particular age group.  Currently Nick is operating in the market of New South Wales and wants to expand the business in the whole Australian market and in the market of New Zealand.

In this context, the restaurant is going to put more emphasis on the quality of foods rather than the price. As a result of that the food prices will be much higher but the company never wants to compromise of its quality. In this regard, the restaurant is going to provide foods with low fat so that it will be beneficial for reducing the high risk of obesity which becomes an epidemic in Australia (Hayes et al. 2016). Moreover, there is an array of foods which are not only delicious but also healthy and in good quality.

Customers and Markets

The target customers for the restaurants are mainly from 20 to 45 years of age. It means the company encapsulates adult customers who are very conscious about their health. As a matter of fact, the company is going to organize campaigns in the local community about the detrimental impacts of obesity and other food oriented health problems. In course of taking these measures it will be beneficial for the company to attract more customers. Besides this, the company is willing to change its service procedure by conducting training for the employees. In return, it will help to render good services with professional outcome on behalf of creating a good brand image of the restaurant.

The Company intends to follow both the traditional and the modern tools of marketing strategies. In this regard, promoting through flyers and television are considered to be the traditional marketing mechanisms for the company. In addition to this, the restaurant also uses social media as a guiding tool for promoting its new products. Social media like Facebook and twitter are the principal social media that can generate more customers for the company. In addition to this, regular campaigns on health awareness against obesity are considered to be an effective promotional tool for the restaurant (Sulaiman 2016).

In order to entice the customers to pay the prices the company can conduct creative servicing plans. In order to give the customers, the conception that the restaurant uses farm fresh ingredients, many of which are grown organically, extra consumables can be added to the catering list. Lead customers generally care for the quality of food, and not much for the service quality (Cole 2016). It is expected that take-up rate of this business strategy will be high, owing to the fact that they would get assurance about the product quality from this. The company can indulge in direct physical sales. Besides, the revenue stream can be directed through online sales with PayPal as the payment option. However, retailers and distributors can also be used for broadening the revenue stream.

The management team for this venture will be comprising of the Supply Chain manager along with Dieticians and Nutritionists who would be involved in relating the customers with the ways in which the venture produces value for them. The restaurant staffs involved in the project, should be trained regarding the various gastronomical issues prevailing in the society and how their products generates value in that context (Stewart 2016). Along with the current crew, additional 25 staff have to be incorporated by the company. The additional employees should be employed under the criteria that they should have knowledge in gastronomy.

Customer Value Proposition

A market trademark have to be attained for the products and services that the company wants to endorses through this venture. This would prevent other entrants from spreading negative vibes about the utility of the services and products (Larsenand Jacobsen 2016). The company can generate business value through this venture, alongside making the Australian people more conscious about consuming food in restaurant.

The company will be working based on different partners so that the supply chain can be managed in a proper manner. This will help in the efficient operation of the company as well. The major partners of the company will be the loyal customers who will help in increasing the sales in a better manner, as the products need to be consumed by them. The suppliers of the company will be the markets from where the raw materials need to be procured. The company will make sure that the raw materials are fresh so that it can be stored and used for cooking as well. The bank will provide the initial loan to the company so that the restaurant can be opened without any hassles. The amount of the loan will be returned to the bank along with the rate of interest within a specific period of time (Stewart 2016).

Summary Statement
Sources of Capital
Owners’ and Other Investments	$    10,000
Bank Loans	150,000
Other Loans	–
Total Source of Funds	$  160,000
Startup Expenses
Buildings and R/E	$    22,000
Leasehold Improvements	–
Capital Equipment	70,000
Location / Admin Expenses	12,000
Opening Inventory	22,000
Advertising / Promo Expenses	15,000
Other Expenses	–
Total Startup Expenses	$  141,000

			Year 1	Year 2	Year 3	Year 4	Year 5
Revenue
	Gross revenue		$487,500	$521,625	$573,788	$631,166	$694,283
	Cost of goods sold		$146,250	$149,175	$155,142	$164,451	$177,607
	Gross margin		$341,250	$372,450	$418,646	$466,716	$516,676
	Other revenue [source]		$0	$0	$0	$0	$0
	Interest income		$0	$0	$0	$0	$0
	Total revenue		$341,250	$372,450	$418,646	$466,716	$516,676
Operating expenses
	Sales and marketing		$15,000	$15,300	$15,912	$16,867	$18,216
	Payroll and payroll taxes		$0	$0	$0	$0	$0
	Depreciation		$18,400	$18,768	$19,136	$19,504	$19,872
	Maintenance, repair, and overhaul		$0	$0	$0	$0	$0
	Total operating expenses		$33,400	$34,068	$35,048	$36,371	$38,088
Operating income		$307,850	$338,382	$383,598	$430,345	$478,588
	Interest expense on long-term debt		$5,398	$4,290	$3,138	$1,940	$694
Operating income before other items		$302,452	$334,092	$380,460	$428,405	$477,895
	Loss (gain) on sale of assets		$0	$0	$0	$0	$0
	Other unusual expenses (income)		$0	$0	$0	$0	$0
Earnings before taxes		$302,452	$334,092	$380,460	$428,405	$477,895
Taxes on income	30%	$90,736	$100,228	$114,138	$128,522	$143,368
Net income (loss)		$211,717	$233,865	$266,322	$299,884	$334,526
Cumulative income		$211,717	$445,581	$711,903	$1,011,787	$1,346,313

The company will have break-even sales in the first year itself and precisely by the mid-year assuming that the accounts in being done in a financial year.

Assets	Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Cash and short-term investments	$19,000	$114,307	$212,872	$326,696	$456,114	$634,746
	Accounts receivable	$0	$0	$0	$0	$0	$0
	Total inventory	$234,000.00	$250,380.00	$275,418.00	$302,959.80	$333,255.78	$333,256
	Prepaid expenses	0	0	0	0	0	$0
	Deferred income tax	0	0	0	0	0	$0
	Other current assets	0	0	0	0	0	$0
	Total current assets	$253,000	$364,687	$488,290	$629,656	$789,370	$968,002
	Buildings	$22,000	$22,000	$22,000	$22,000	$22,000	$22,000
	Land	0	0	0	0	0	0
	Capital improvements	$                                   –	0	0	0	0	0
	Machinery and equipment	$                        70,000	70,000	70,000	70,000	70,000	70,000
	Less: Accumulated depreciation expense	0	18,400	37,168	56,304	75,808	95,680
	Net property/equipment	$92,000	$73,600	$54,832	$35,696	$16,192	($3,680)
	Goodwill	$0	$0	$0	$0	$0	$0
	Deferred income tax	0	0	0	0	0	0
	Long-term investments	0	0	0	0	0	0
	Deposits	0	0	0	0	0	0
	Other long-term assets	0	0	0	0	0	0
	Total assets	$345,000	$438,287	$543,122	$665,352	$805,562	$964,322
Liabilities	Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Accounts payable	$0	$0	$0	$0	$0	$0
	Accrued expenses	0	0	0	0	0	0
	Notes payable/short-term debt	0	0	0	0	0	0
	Capital leases	0	0	0	0	0	0
	Other current liabilities	233,475	420,389	629,756	872,064	1,148,784	1,461,421
	Total current liabilities	$233,475	$420,389	$629,756	$872,064	$1,148,784	$1,461,421
	Long-term debt from loan payment calculator	150,000	$122,306	$93,504	$63,550	$32,398	($0)
	Other long-term debt	$0	$0	$0	$0	$0	$0
	Total debt	$383,475	$542,695	$723,260	$935,614	$1,181,182	$1,461,421
	Other liabilities	0	0	0	0	0	0
	Total liabilities	$383,475	$542,695	$723,260	$935,614	$1,181,182	$1,461,421
Equity		Initial balance	Year 1	Year 2	Year 3	Year 4	Year 5
	Owner’s equity (common)	$                        10,000	$10,000	$10,000	$10,000	$10,000	$10,000
	Paid-in capital	0	0	0	0	0	0
	Preferred equity	0	0	0	0	0	0
	Retained earnings	0	0	0	0	0	0
	Total equity	$10,000	$10,000	$10,000	$10,000	$10,000	$10,000
	Total liabilities and equity	$393,475	$552,695	$733,260	$945,614	$1,191,182	$1,471,421

		Year 1	Year 2	Year 3	Year 4	Year 5	Total
Operating activities
	Net income	$211,717	$233,865	$266,322	$299,884	$334,526	$1,346,313
	Depreciation	$18,400	$18,768	$19,136	$19,504	$19,872	$95,680
	Accounts receivable	$0	$0	$0	$0	$0	$0
	Inventories	($16,380)	($25,038)	($27,542)	($30,296)	$0	($99,256)
	Accounts payable	$0	$0	$0	$0	$0	$0
	Amortization	0	0	$0	$0	$0	$0
	Other liabilities	0	0	$0	$0	$0	$0
	Other operating cash flow items	0	0	$0	$0	$0	$0
	Total operating activities	$213,737	$227,595	$257,916	$289,092	$354,398	$1,342,737
Investing activities						$0
	Capital expenditures	$0	$0	$0	$0	$0	$0
	Acquisition of business	0	0	0	0	0	$0
	Sale of fixed assets	($90,736)	($100,228)	($114,138)	($128,522)	($143,368)	($576,991)
	Other investing cash flow items	0	0	0	0	0	$0
	Total investing activities	($90,736)	($100,228)	($114,138)	($128,522)	($143,368)	($576,991)
Financing activities
	Long-term debt/financing	($27,694)	($28,802)	($29,954)	($31,152)	($32,398)	($150,000)
	Preferred stock	0	0	0	0	0	0
	Total cash dividends paid	0	0	0	0	0	0
	Common stock	0	0	0	0	0	0
	Other financing cash flow items	0	0	0	0	0	0
	Total financing activities	($27,694)	($28,802)	($29,954)	($31,152)	($32,398)	($150,000)
Cumulative cash flow	$95,307	$98,565	$113,824	$129,418	$178,632	$615,746
Beginning cash balance	$19,000	$114,307	$212,872	$326,696	$456,114
Ending cash balance	$114,307	$212,872	$326,696	$456,114	$634,746

The company will be trying to open their branches in different cities of Australia as well so that the restaurant can become famous and result in a higher profit as well. This will ensure that the company will be running for a longer period as well.

Conclusion

Therefore it can be stated that the restaurant will be running in a proper manner in the market, as the profits of the company will be high. Since gastronomy is a newer concept in the food business, it will help in attracting more number of customers. This will also result in increasing the popularity of the company as well.

Reference List

Cole, S., 2016. Can Managed Services Help Your Firm’s Revenue Stream. Legal Mgmt., 35, p.19.

Hayes, A., Chevalier, A., D’Souza, M., Baur, L., Wen, L.M. and Simpson, J., 2016. Early childhood obesity: Association with healthcare expenditure in Australia. Obesity, 24(8), pp.1752-1758.

Larsen, S.B. and Jacobsen, P., 2016. Revenue in reverse? An examination of reverse supply chain enabled revenue streams. International Journal of Physical Distribution & Logistics Management, 46(8), pp.783-804

Stewart, S., 2016. Independent School Has Everything but a Large Tuition Revenue Stream: Waterside School, Stamford, Connecticut. Independent School, 75(4), p.n4.

Sulaiman, M.Z., 2016. Translating Australian Urban Gastronomic Experiences for Malay Tourists. Pertanika Journal of Social Sciences & Humanities, 24.