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Unit 33 Small Business Enterprise Assignment Kitchin Case
Diploma in Business
Unit Number and Title
Unit 33 Small Business Enterprise Assignment Kitchin Case
Small businesses are the chief supporting system of UK’s economy and are a major contributor in driving growth, opening new markets and creating employment opportunities. Acting as seedbeds for innovation, SBE’s embolden market competition by brining original business ideas thereby, challenging the status quo. SBE’s are valuable for UK representing about 99.9% of businesses hence, the government encourages them to grow.
For understanding the importance and impact of SBE, in this assignment The Kitchin has been considered as a case example.
1.1 In the above scenario of a small business enterprise, produce a profile of a selected small business identifying its strengths and weaknesses (AC 1.1)
In this section the profile of small business that will be discussed is a restaurant The Kitchin that was opened in 2006 in Edinburgh, UK. The business profile:
Overview: The Kitchin’s business philosophy is to bring nature to the plate of guests and that is the passion envisioned by Chef Tom Kithin who started this restaurant partnering with Michaela Kitchin in 2006. They serve modern British cuisine influenced by French cooking by sourcing some of the freshest and finest local produce. They are located in 78, Commercial Quay, Leith, Edinburgh.
The Kitchin is designed to provide warm and relaxed atmosphere to the diners by maintaining Scottish heritage which can be viewed all over the tones and its textures. They offer welcoming and non intrusive service to their guest which is their speciality of ultimate dining experience. (TheKitchin, 2016)
- Team: Tom & Michaela Kitchen (Proprietors), Philippe Nublat and Maitre d’ Sylvain (Food & Beverage Director)
- Nature of business: Dine-in restaurant
- Mission: The Kitchin’s mission is its philosophy statement “From Nature to Plate” i.e. offering fresh and finest meal cooked with local farm produce. They believe in enriching diner’s experience with combination of taste, cosy ambience and non intrusive delivery.
- Products and service: The Kitchin’s offer their customers with wide range of food, drinks and online shopping products like meal vouchers, gift vouchers and recipe books.
Tuesday-Thursday: 12:15 PM-2:30 PM, 6:30 PM-10:00 PM
Fri-Saturday: 12:15 PM- 2:30 PM, 6:30 PM-10:30 PM
Sunday and Monday closed.
Payment method: Cash, Credit cards and E-wallets
Financial Report: Not disclosed
Contact us: The Kitchin, 78 Commercial Quay, Leith, Edinburgh EH6 6LX
Telephone: +44(0) 131 555 1755, email: firstname.lastname@example.org
Analysis of Strength and Weakness at The Kitchin’s
Strength: The Kitchin serves best quality food cooked with fresh and finest local farm produce in a warm and relaxed atmosphere. The ingredients are of best quality and they are supplied by local suppliers in the kitchen every day. Also meat and fish are sourced whole and all butchering and filleting are done in-house. This is the biggest strength of The Kitchin’s best cooked British food. Also, the restaurant maintains a touch of Scottish Heritage in its colours, furniture’s, designs and crockery’s. They have dining area made from original stone and wood which gives a sense of intimacy and cosiness. The colour tones are kept grey and silver with turquoise to create relaxing atmosphere. The textures used are wool, wood, stone, glass and fur that provide a place to unwind and enjoy. These all make it attractive and warm place. Even, the service is warm, friendly and non intrusive due to highly professional and trained staffs. The customers can see their chefs prepare delicious meals from dining area which enhances the dining experience. Also the prices that are offered are affordable which helps to maintain customer influx. Moreover, The Kitchin has strong relationship with their selected suppliers who provide seasonable produce daily at negotiable rates. (MindTools, 2016)
Weakness: Some notable weakness of The Kitchin is its opening timing which is very limited as it closes early. This restricts those customers who prefer late night dining due to professional work or especially during weekends. Also it has Sunday and Monday closed days which means limiting customers who choose to go to restaurants on Sundays. Even the restaurant has less staff which means limited possibility to add more cuisines, services or customer volume. At present they serve only British food which means they have limited food options for those customers who prefer to taste more new servings. Finally, they have limited use of technology in ordering and billing process which is a weakness as these days more customers prefer online medium. (MindTools, 2016)
1.2 Carry out an analysis of the business using comparative measures of performance (AC 1.2)
The performance of restaurant The Kitchin can be measured by using various bases like financial profits, ROI, sales, customer satisfaction, employee retention, timely procurement of supplies and cost indicators. At present The Kitchen is awarded with various accolades such as Michelin Star, Best UK restaurant, Five AA Rosettes etc. These are indicators of its quality food offering, customer satisfaction and services. Apart from these performance bases let us discuss its financial profits. (Mokhtar, 2012)
Table 1: Comparison of Profitability during 2011-15 for The Kitchin and Wedgewood The Restaurant
Wedgewood The Restaurant
From the above table it can be analysed that profit generation of The Kitchin has keep growing positively between the years 2011-15. Also Profit after Tax (PAT) has shown a growing trend which is a good performance indicator to decide on revenue generated after deduction of expenses and taxes. But comparatively the profit achieved is lower as compared to another restaurant in Edinburgh Wedgewood so, The Kitchin’s objective is to achieve higher profit % in upcoming years.
Table 2: Sales between the years 2011-15
Wedgewood The Restaurant
From the above table it can be analysed that sales of both The Kitchin and Wedgewood has increased but comparatively Wedgewood has shown higher growth in sales till 2014. But in year 2015, The Kitchin has reported a fall of 2.38 % in sales whereas Wedgewood has shown a growth of 15% rise in sales during the same period.
Other than financial bases, some non financial bases include brand awareness that indicates popularity of product/service among customers. This is as given:
Table 3:Comparison of Brand Awareness
Wedgewood The Restaurant
Other attributes such as patents or trademarks.
Scale: 1= Lowest; 7= Highest
From the above table it can be analysed that in terms of customer loyalty The Kitchin holds comparatively better score than Wedgewood. While in Brand awareness, patents and trademark Wedgewood leads. However, in terms of quality food and service both are equally rated.
Table 4: Customer Perception of Food & Service Quality
Year ending 2015
Wedgewood The Restaurant
Is it good value
Can it really deliver superior performance
How does it compare with competitor offerings
How will it compare with competitor offerings in the future given competitive innovations
Scale: 1= Lowest; 7= Highest
From the above comparison it can be analysed that in terms of value for money and performance Wedgewood is ranked higher than The Kitchin, so it needs to add more menu, process like quick delivery, online booking and billing option. The Kitchin needs more staff to increase their performance ranking and score against competitor offerings.
2.1 Recommend with justification, appropriate actions to overcome the identified weaknesses in the business (AC 2.1)
Certain recommendations that can be included at The Kitchin for overcoming their existing weaknesses in business are:
- The most significant weakness of The Kitchin is less number of staff both in kitchen and business process. In order to improve their competitiveness they need to hire more number of personnel. They can choose for contract hiring as it will help them to retain only selected trained personnel’s who can match their standards and expectations. They can engage new staff for six months contractual agreement for which they can advertise on their website or outside their restaurant. They also need to plan job description and person specification by stating responsibilities and number of working days/hours. (Hauser, 2016)
- The Kitchin should increase their opening hours and number of working days. Especially during weekends they can choose to remain open as more customers prefer to dine out during weekends. This will help to put up their sales and customers will feel satisfied who are regular visitors at The Kitchin. Moreover they can keep the restaurant open for longer hours during weekends as many customers prefer late night dining. (Hauser, 2016)
- The Kitchin presently serves only British menu to customers which it needs to change according to customer demand. Nowadays customers prefer to taste more varieties and global food so The Kitchin can use this opportunity to attract and satisfy customers. In order to add more menu and cuisines they need to hire more professional staffs who are master in cooking international cuisines.
- The Kitchin can increase their integration of technology into booking and billing process by accepting credit cards or online payments. By incorporating more payment options they will increase access and convenience of customers who prefer mobility and quick methods over traditional way to carry cash in wallets. Also they can add Wi-Fi access to keep customer engaged during their waiting time which will help to boost sales and customer satisfaction. (Hauser, 2016)
2.2 Analyse ways in which existing performance could be maintained and strengthened (AC 2.2)
The Kitchin can maintain and strengthen their existing strengths to maintain their business performance. The foremost thing in this regard is to adapt the business with changing environment, market demand and customer preferences. As customers these days are highly informed and hooked to digital platform like social media, internet and mobile apps so The Kitchin needs to infuse more of digital promotion and usage in its marketing channels and process of ordering food and making payments. They can improve business strategies and decision making by including e-wallet options, accepting card payments and also facilitating pre online food ordering. Additionally they can use mobile apps for quick bill payments and checking menu. This will increase customer usability and convenience. (Philips, 2011)
The Kitchin can also keep an eye on their competitor strategies to improve their business decisions. As like their rivals they can add more cuisine options and elaborate menus to attract more customers who prefer experimenting tastes. They also need to analyse competitor’s products and services closely to include more differentiation and uniqueness in their restaurant.
Further, The Kitchin needs to widely promote their strengths of quality in terms of fresh and authentic taste, ambience, warmer customer dealings, friendly staff and chefs to promote their uniqueness by appealing customer’s regularly with some catchy promotions or tricky offers. This will strengthen their USP (Unique Selling Proposition) Moreover, as The Kitchin’s staff and selected suppliers are their core strengths so they need to always build relationships with them by engaging them in decisions and giving them valued significance. (Philips, 2011)
2.3 Recommend with justification, new areas in which the business could be expanded (AC 2.3)
The recommendations through which The Kitchin could improve their business expansions are:
- First they need to have a proper business plan of expansion and strategic development so that their business objectives, resources and growth plans are all aligned effectively. This will also help them decide on priorities, timescales and budget planning under SMART objectives. William, 2016)
- They need to increase their staff to plan expansion avenues and meet business requirements for growth.
- They need to expand their cuisine and menu options on palate to appeal more prospective customers and increase their sales. Also they need to integrate and optimise their business process according to changing times where customers prefer e-wallets or card payments over cash payments. Even they need to keep their restaurant open in weekends for long hours to catch more sales. William, 2016)
- They can increase their connection and relationship building with customers by increasing their social networking. Example, they can encourage their customers to ask queries regarding food or ingredients used in preparations which can be responded by team of The Kitchin. This instant process of questioning and responding will increase customer engagement and will even help them to identify their emerging needs. This opportunity of exploration will appeal customer interest and increase their brand value.
- To increase more visibility they can regularly add instant promotions or newsletter to customers that would catch their interest. Integrating marketing with various communication channels will expand customer base, retention and profitability. (William, 2016)
3.1 Produce an assessment of existing business objectives and plans (AC 3.1)
Business Plan of The Kitchin
Marketing aims and Objectives: The Kitchin restaurant, which is, located in Edinburgh, Scotland, UK is in need of expanding its existing customer base to 10% by 2017 hence, its business plan will highlight the estimation of the number of customers it needs to double. Moreover, another key purpose the plan needs to serve is covering up the loss of 3.42% and enhances its profit margins for standing the aggressive market competition. The restaurant should also give genuine efforts in making the best use of online marketing tools through social media tools like Facebook Page Insights, PlaceIt, Piktochart, MailChimp and many more and offer a more user-friendly website and mobile application in 6 months. (Khan, 2014)
Restaurant’s location: The Kitchin is located in Leith, Edinburgh. Local grocery stores, meat shops and local farmers are the key suppliers of the restaurant who every day supply seasonal fruits and vegetables direct into the kitchen.
Financial Information: in 2013, the restaurant suffered a loss of 3.42% despite of a marginal increase in revenue generation in between 2009 to 2012.
Summary of business objectives
The Kitchin restaurant has certain SMART objectives that are briefly discussed
Measuring progress through time quotes and customer call backs for checking satisfaction. It should include a comment sheet for customer responses.
Through customer call backs or comment cards
Designing a grading chart on a scale of 1 to 10 and include a check-off list for the manager to follow.
Setting up customer call back system including a comment sheet for collecting customer responses
Taking feedback from catered customers
The restaurant can measure this goal with the actual outcome of the sales amount daily
By placing the deliveries within the reach of the waiter serving the table once the order is placed and the food comes up
Setting attainable standards
Can be controlled and achieved because managers prepare and submit the information
Managers will regularly call and fill the form
Designing a system, training the staff and measuring feedback
This goal can be achieved expanding the marketing techniques
The view is practical because by reducing the waiting time, more orders can be taken
Setting a real time within which the food can be delivered
Is a continuous process which should be altered with conformity
Can be attained through consistency and prioritizing
Can be achieved through follow-up
Making £4000 per day is a feasible goal.
The restaurant needs to start the process instantly and will take 2 weeks for training the staff and will take about 2 months for noticing the sizable difference at the customer end
Starting at the earliest to conclude within 3-4 weeks. (Khan, 2014)
Till December 2016
The outcome of this goal measured within 3 months
The SMART Objected are analysed below:
- The Kitchin has no myriad of business objectives and is specific and focused on what its goals are and further aims of designing adequate strategies
- The goals are quantitative which the restaurant aims of measuring through its daily sales performance and customer responses
- The goals that are defined can be attained by the restaurant by clearly defining the job responsibilities of employees
- The applicability of the plan is effective only if the outcome meets the expectations hence, the strategic planning is designed by considering few proactive measures for proving the plan’s importance.
- It is recommended of expanding the business by opening one or more outlets further satisfying the last element of the theory i.e. time bound
- It is prescribed that within a year the company will open more outlets and which is fixed. This plan satisfies the last element of SMART theory i.e. time bound.
3.2 Revise business plans to incorporate appropriate changes (AC 3.2)
Preparing a business plan without reviewing it regularly is similar to drive a car without knowing the route. For developing a business and incorporating any change, it is foremost essential to develop an understanding about the business. Moreover, it is necessary to review the outcomes of the measures undertaken for accomplishing the goals with the action plan and finally assess the overall performances. The Kitchin’s long-term strategies are further built on various short-steps it takes. In case, the restaurant’s business is not up to the mark or satisfaction levels then appropriate changes can be made that eventually will depend on the results derived. However, at the same time, it is important for just plunging from one strategy to another. (Berry, 2016)
In case the niche marketing strategy of The Kitchin is not producing good results, it is not mandatory or a ‘Must Do’ activity of changing the marketing strategy. The restaurant needs to understand the right time of revising the plan, which obviously should be any change in the business environment and market conditions, change in customers’ behaviour, for example, for identifying the areas where The Kitchin is going wrong, it can conduct a SWOT and pre-evaluate and if certain business presumptions are changed, for example, regular reviewing of the forecasting might bring a change in its business beliefs.
For incorporating changes in the business plan The Kitchin can remove few objectives or amend them. Moreover, it needs to undergo various measures while evaluating and executing the strategies. Ahead of exercising any major change, the restaurant needs to predict its prospective loss because taking bad investment measure will bring in more losses. The owner should ensure that there are enough funds for implementing the changes. It should take into account a comprehensive observation of the business environment along with considering breakeven point analysis for measuring its current and future performances. In case, The Kitchin genuinely needs to incorporate change then it should consider how the adjustments would be made without bothering the customers and employees. The Kitchin should pay attention in following and monitoring a change and keep the shareholders informed. If exercising the change needs some kind of employee training then it should be provided. (Berry, 2016)
Project budgeting for the Kitchin
Based on the restaurant’s objectives of growing at least 10% from its current customer base, the budget might look like
Project monthly budget for the Kitchin
By calculating the project budgeting, the restaurant can gain an estimate of its monthly expense and further identify if some unnecessary expenses are made and what are its savings
Based on The Kitchin’s performance and the above analysis if it is assumed that the restaurant has £13000 operational balance then the saving plan will be:
Savings = £13,000 – £9, 638 = £3,362 x 12 = £40, 344
Sales Forecasting: It is assumed that in the first month it is more likely that no improvement in the sales will be there and even if it improves, will be very marginal. In the second month, the restaurant will be a little more active and customers are making repeated visits. Market promotion, on the other hand is continued. The third month is comparatively better than the first two as improvements are forecasted to be more evident in the third month. Any variation in the next months will depend on customer demands. On successfully completing the first year, the annual revenue growth predicted is £55,000.
3.3 Prepare an action plan to implement the changes (AC 3.3)
For incorporating changes discussed in the earlier section, The Kitchin needs to adopt certain strategies for strengthening its shortcomings thereby, eventually achieving the long-term business goals. However, it is important for the restaurant to understand that the action plan might vary from any kind of change in the external and internal business environment. For averting lapses, the action plan must be a reflection of the ongoing process and every day records.
The proposed changes are:
- Opening new branch in London
- Expanding the food offerings with an economical bar menu chock-full of favourites.
- Renovating the dining area and making it more relaxed and warmer
- Making the restaurant more accessible by remaining open for lunch too
- Offering a table of low-cost weekend specials like family dinner on Sundays where children below 8 can eat for free. (Marquis, 2016)
Few measures needed to be taken ahead of implementing the action plan. For example, if The Kitchin is saving say, £2290 a month should hike the sales revenue by approximately 15% for enabling to execute the plan. The estimated time frame for achieving what has been proposed is 6 months. For opening a new branch in London, The Kitchin needs to arrange for a backing support, which will further gradually grow its market image thereby, increasing the profit margins. For expanding the chain, the restaurant needs to set up a well-executed promotional plan which should be executed within six months. Moreover, The Kitchin should prepare a well-planned portfolio performance which will encompass of forecasting’s, timescales and analysis for determining a clear view of its mission, vision and market position. The most important thing to implement a change is setting up timeframe which further will allow the staffs involved in getting enough time for preparing themselves to wilfully accept the changes. The owner should direct them thereby, giving minimum scope of making mistakes. While incorporating a change The Kitchin should maintain the performance records and adjustments wherever required.
4.1 Report on the impact of the proposed changes on the business and its personnel (AC 4.1)
Impact of proposed changes toThe Kitchin: Appropriate financial planning will help the restaurant in achieving its desirable success and reaching its goals. A well-planned financial plan eventually will bring a drastic improvement in revenue generation of The Kitchin. (Schwartz, 2013)
Engaging people with required skill sets: The Kitchin by determining its recruitment needs can outline the job description specification of the vacant positions and give advertisements in print and electronic media for attracting new staffs for enhancing the overall productiveness of the workforce. This further will empower The Kitchin in acquiring experienced employees because they understand the requirements of the restaurant and the job thereby, delivering an improved customer services. (Schwartz, 2013)
Acquiring value added services:forThe Kitchin additional services like offering alternative modes of payment, gift cards, loyalty cards, and prepaid cards, sending a coffee card, car parking etc. Introduction of additional services will bring in more diners as it is not only the food that drives them. Hence, focusing on these services will enhance its daily business and customer acquisition. Designing a themed ambience, beautiful surroundings etc. will grasp customers’ attention.
The proposed changes will leave a positive impact on The Kitchin that eventually will bring more effectiveness, escalate the profit margin and add value to the business. Implementation and management of the proposed change will further waive the errors in the restaurant’s business plan that brought inadequacies and reduced its profits. Despite knowing the fact that change is inevitable, it usually is not always wholeheartedly welcomed by the staffs as they might hesitate in leaving their comfort zones because their doubts that they cannot adjust in the changing environment. (Schwartz, 2013)
Change will help The Kitchin in staying updated with the current business trends making it more appealing to existing and potential customers
4.2 Plan how the changes will be managed in the business (AC 4.2)
For successfully implementing and managing the changes in an effective way The Kitchin must adopt the following measures:
Prioritizing which change is more important: pursuing the action plan, opening a new branch can be considered as The Kitchin’s most important change and it can be managed by arranging for funds or investors for executing the long-term objectives and plan change. (Root, 2016)
Take opinions: changes often are uncertain and involve forwarding to unidentified areas hence, it always is beneficial in taking advices from experts. The Kitchin needs to first seek for financial advices from bank or any trusted business associate. It can also keep a close tab on the competitors
Test the change: setting a trial period say, 6 months for implementing the action plan will help The Kitchin in identifying the flaws and lapses during the process
Taking employees’ feedback: although employees forgo any change, taking their feedbacks will make the entire process easy to execute as they will feel that the owner values their opinions.
Taking customers’ feedback:keeping the customers well-informed and asking for their opinions will eventually allow The Kitchin in revising the plan of change as at times customers can act as good judge in deciding whether the proposed change will be fruitful. (Root, 2016)
Making comparisons with past performances will enable The Kitchin in seeing how evenly the changes are implemented. Furthermore, maintaining a database will give a transparent picture of what has been accomplished and needs to rectify. Impact of any changes is the most on staffs hence, for evaluating the change the owner should openly communicate with them and listen if any other change is possible.
4.3 Monitor improvements in the performance of the business over a given timescale (AC 4.3)
The Kitchin should conduct an analysis of the entire plan. Moreover, the restaurants daily operations, improvements and performance eventually rely on systematic monitoring of the plan. Going back to the strategic action plan, the owner needs to keep a close watch on the progress of the actions executed by setting up the timescale for varied time periods. Confiding on the action plan, it will empower The Kitchin in assessing the exact stage the business is currently in, whether or not it is following the action plan step by step. At this stage, it is equally important to compare the expected figures with the actual ones in order to find out if the business is operating effectively. By adopting a culture of planning and evaluating, The Kitchin can gain competitive advantage. Maintaining a trail of what is done, where the business stand and what should be the action plan eventually acts as a direction to follow. In case, the restaurant at a certain point is unsatisfied with the achieved outcomes, the prospect of changing the value chain is always there by outsourcing an experienced person. (McNamara, 2016)
The Kitchin’sbusiness plan framework and strategic thinking
The Kitchin should understand that each stage is significant in one way or the other and in the absence of smart objectives it is impossible to scan the business environment productively and making improvements wherever required. Specifically for a small business enterprise like The Kitchin it is essential in having a well defined strategic action plan for exercising the desired changes to enhancing the market share and evolving a viable competitive advantage. Targeting the niche market will be a good way for allowing the restaurant in setting up high price for the dishes. Moreover, a product’s life cycle will predict the right time of reducing the prices and initiate a product/services change marketing and selling strategy. It is essential that The Kitchin possess the key skills of surviving in the market. (McNamara, 2016)
At the end, it can be concluded that with the emergence of modern business scenario, the contributions made by small business enterprise are leaving immense significance on facilitating the prosperity and commercial evolution of UK. Although, SBE’s might not much revenue when compared with large corporations, they are emerging as major contributors in strengthening the local economies. SBE’s provide new employment opportunities thereby, serving as pillars of UK’s large companies
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