New Business Concept Essay
The fact that our new venture would be based in such a multicultural place as London straightaway gives us a huge opportunity to succeed. First of all because this broadens our target market, now we not only aim at English people and about 100,000 Russians living in London, but also all other nationalities who would like to expand their knowledge of Russia by staying at our little island of Russian culture called “Izba”. We have this confidence in existing demand due to a lot of research we have done recently. Phrases like “I love Russia, Russians, your language and your culture!
I have been to Russia so many times and miss that and that so much! ” is something common to hear from a British person or any foreigner. So our aim is to provide that something they all miss or something they wish they could try. Surprisingly despite unstable political and economical situation in Russia it is becoming more and more popular country to know about and to talk about. The fact that it is European Unions largest trading partner gives it yet another opportunity for popularity growth and for us yet more people wanting to try out little something
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So the following is the description of the scope and content of our venture’s activities. Restaurant and bar will lie over two floors – ground floor and basement. Working seven days a week, from 11am to 4pm and then 6pm till 11:30pm. Food will be served in the above stated hours to a variety of Russian music in the background to match the customer’s desires. In the evenings they can enjoy the live music, which will make the atmosphere even more special, traditional and warm. Russian Restaurant’s menu will offer all dishes of traditional cuisine. It would be every day selection.
Moreover, restaurant will provide business lunch menu during the day, chief will accept special orders from all customers. There would be a separate menu for special occasions (birthday parties, celebrations, etc. ) Night bar with Russian billiard will be working seven days a week from 6 pm till 11:30 pm creating a very enjoyable atmosphere for the customers to relax in. Also on Fridays and Saturdays from 6 pm till 2 am Russian parties will take place in the Bar. All the customers will enjoy dancing to a mixture of different stiles of music, of course, including Russian music. Our friendly staff will always find the way to entertain people.
As we decided to combine various pieces of our culture, therefore this is the main and unique benefit of our restaurant. And as far as our restaurant will mainly concentrate on middle to upper class customers we will try to concentrate highly on service standards and quality of food. To achieve that we will have to apply a special marketing approach to reach our customer needs and wants. We will have the qualified staff to assist customers, the top food for them to enjoy, the finest style to make customers feel the genuine Russian atmosphere, the best entertainment to make them always happy and become regular customers.
And now we will have a more detailed look at the industry we want to enter, our service and its value, restaurant market, competition and some other important issues. Our private owned restaurant is a perfect example of monopolistic competition, which is the market where large number of firms compete by producing differentiated products, the gain here is a large product variety and consumer information. So in order to be successful we have to stand out with the service we provide and promote it using every possible way, and make sure the message reaches potential customers so they have the perfect knowledge.
Our restaurant value chain will be built up depending on three major aspects. Primarily value is added when a professional Russian Chef transforms raw food products into delicious Russian dishes. Excellent presentation of these dishes and overall hospitality makes the visit to the restaurant really worth full. The special traditional theme of the restaurant and variety of entertainments to enjoy add even more value to the time spent here. And value for money is the best possible compromise between the client and us.
PDI and consumer expenditure trends show that incomes are raising faster than consumer expenditure over these years. This has led to the creation of very value-conscious consumer. Within eating out market consumer is becoming more and more demanding. This would give our new venture a great possibility for potential growth. With raising income people would be more willing to go out and such a unique place as Traditional Russian Restaurant would satisfy increased demand by providing excellent quality food and friendly atmosphere.
There is great potential for growth as Russian restaurant will be in the category of Theme Restaurants. According to 2000 Mintel Report “consumers are dedicated a greater proportion of their personal disposable income to eating out and between 1995 and 2000 the value of this total “theme” market increased by 28%. Major economic technological and social forces that govern competition and inter-firm rivalry within the industry and how that might change into the future. Competition and inter-firm rivalry is very intense in this sector of the market.
With competition not only from restaurants, fast food chains and pubs but also from supermarkets and other shops which now provide not only ready to eat meals but also meals for special occasions and different cuisine’s. Technological and social forces control competition. Technology will have less effect on competition than social forces in the restaurant industry; however, with the age of computers and Internet they can bring competitive advantage to the business. In order to be efficient and gain competitive advantage restaurant should be cost efficient.
This can be achieved by using accounting software in order to control, monitor and budget costs. Our restaurant will provide best quality, fresh food. Therefore sock control is essential in order to gain good customer loyalty and competitive advantage. Internet can be used as a distribution channel and orders could be made through it. This is time saving and cost efficient. Internet is also one of the best communication channels. By having our own web site we could expand people awareness of Russian restaurant and attract potential customers.
It is also essential to supply information about the restaurant to all major restaurant guides both internet and books in order to provide easy and cheap access for customers. Social forces also influence competition. Mintel report claims that eating out is more popular now than it was ten years ago. Use of restaurants in the evening remains the most popular with 62%, but visiting restaurants during the day has increased more significantly with 51%. This reflects the tendency towards eating out on a wider range of occasions. Eating out has become more like every day necessity rather than a luxury.
Competition in restaurant market is strongly controlled by society: its habits and preferences. As said above people are more willing to go out and restaurants continue to take the lion’s share of eating out market with 69% share. Without major economic breakdowns these figures might be increasing in the future. However, there are other social factors apart from increase in incomes that influence competition in this industry. As suggested in Mintel report there is a decline in culinary skills for some adults. Home delivery or going out is a normal practice for some house holds.
There is also change in eating habits with more people cutting down on red meat. This trend boosts demand for vegetarian and healthy meals as well as white meat and fish dishes. In 1990 only 3. 3% of population were vegetarians, now this figures is more than 6. 7%. Competition will be affected by menu selection and availability of healthy food. Important factor affecting competition is eating out preferences. In order to remain competitive restaurants should carefully research what is customer interested in the most. The most important factor when selecting a restaurant with 12% increase was “good quality food”.
Reasonable prices are the second factor in 1999, when in 1990 it was first. Friendly service and “atmosphere I like” are also important. But increasing importance is coming from “easy to get to” factor and “vegetarian options on the menu”. According to Porter’s Five Forces Model competition is less intense if there are more buyers for the product. So in the future with raising incomes vs. decreasing expenditure and decreasing culinary skills eating out habits should increase. More people are concerned about healthy food and good quality food.
This should make competition for restaurants from fast food chains, take away and super markets less intense as the food they are offering is less healthy. McDonalds which is the main supplier of fast food facilities in the UK market closed around 50 stores recently due to decrease of demand. Prices in the restaurants are usually higher than in other food facilities, however, “reasonable price” factor is decreasing in its importance. These market factors should provide our venture with great possibility to grow and be competitive as it will provide best quality food, good location and friendly atmosphere.