Strategic Plan

Executive Summary

This initial strategic plan presents a blueprint of Fine Dishes Restaurant business as it seeks to establish operations in the restaurants industry. According to the plan, Fine Dining seeks to penetrate the market by offering highly innovative and differentiated products and services. This will thus provide a competitive edge with which we will effectively compete and achieve business objectives. The plan shall analyze the external and internal environments using the SWOT model. The industry in which the company expects to compete will also be analyzed using the porter’s five force model. Strategies that will be implemented by the company to achieve its objectives includes: increase innovation and new product development, employee training and development, financial stability, and market penetration and expansion.

Table of Contents

Executive Summary ……………………………………………………………………….. 2

Overview of the opportunity …………………………………………………………….… 4

Vision …………………………………………………………….………………… 4

Mission Statement ……………………………………………….……………….… 4

Management Structure ………………………………………….…………………… 4

External Environment Analysis ……………………….……………….…………………… 5

Opportunities ………………………………………………….…………………….. 5

Threats ………………………………………………………….…………………… 6

Restaurants Industry 5 Forces Analysis ……………………………….………………….… 6

Industry Rivalry ……………………………………………….……………………. 6

Barriers to Entry ………………………………….…………….…………………… 7

Threats of Substitutes …………………….…………………….…………………… 7

Power of Suppliers ……………………………………………….…………………. 7

Bargaining Power of Buyer …………………………………….…………………… 7

Internal Environment Analysis……………….………………………………………………8

Strengths ……………………………………….……………………………………. 8

Weaknesses …………………………………….…………………………………… 8

Goals and Strategies ………………………………………….………………………….… 8

Market Share Expansion ………………………………………….……………………….. 8

Innovation and New Product development …………………………….………………….. 9

Development of Human Resources ……………………………………….………………. 9

Financial Stability ………………………………………………………….……………… 9

Risk Planning for Strategy Implementation ……………………………….……………… 10

Action Plan for Strategy Implementation …………………………….…………………… 11

Evaluation and Control ………………………………………………….………………… 12

Overview of the Opportunity

Fine Dining Restaurant is an up and coming restaurant that promises to provide the best service in the Hotel and Restaurants industry. The restaurant intends to succeed through a combination of excellent and interesting food options in an atmosphere that appeal to a wide market.

Vision

Fine Dining Restaurant aspires to be one of the best restaurants in the industry, competing among the top range restaurants and providing cutting-edge products and services to its customers. At Fine Dining, we seek to penetrate the market through highly innovative and differentiated products and services. This will provide a competitive edge with which we will effectively compete and achieve our objectives.

Mission Statement

Our mission is to ‘establish a medium range restaurant that provides competitive products and services that are offered by top range restaurants at affordable prices’. The business shall seek to establish the needs and preferences of clients and seek ways of satisfying them. Through high innovation in the restaurants industry, the organization shall aggressively solicit for wider market share and be able to increase the market in order to achieve its growth and expansion strategies.

Management Structure

The corporate structure of Fine Dining will be a lean but straightforward one. This is in view of the fact that the company will be in its initiation stage and there will be less need for differentiation in management structure. Nevertheless, the following will be key positions and their respective responsibilities.

The President (): The president of the restaurant shall be in overall charge of the key operations of the restaurant. Heads of various departments shall report directly to the president. The key task of the president shall be to direct all other employees and make strategic decisions for the organization. The president shall, thus, be assisted by other heads of various departments.

Chief Financial Officer (): The chief finance officer is the head of the accounting and finance department and controls the flow of finances within and out of the business. The CFO shall facilitate decision making by providing qualitative and quantitative analyses of the financial position of the restaurant.

Human Resources Manager (): The key responsibility of the HRM is to find and develop talents that will enable the company to provide the best services in the restaurants industry. Therefore, the tasks of the manager will be more than just hiring and firing, but developing employees as competitive resources of the company.

Director of Operations (): The DOS shall play a more active role in directing the daily operations of the company. He shall determine the type of services and products to be offered and how to be offered.

The External Environment Analysis

Opportunities

There are opportunities in the restaurants industry, especially with the emphasis on organic foods and health-conscious diet. Our organization shall emphasize on providing healthy foods and thus attract a growing market for healthy foods. The population is increasingly relying on naturally grown foods. This is an opportunity for us to source such products fresh from farm and market them as so.

Threats

Threats are externally generated forces that might affect the operations of a company and thus reduce profitability. Fine Dishes shall operate in a food and health industry, which is highly elastic to consumer needs. The first threat is the current state of the economy. The economic difficulty makes it hard for organizations to sell at premium prices. However, this threat can be mitigated by the company’s strategy to offer high quality products at medium prices. Another threat comes from entry of many businesses in the restaurants industry. This increases the competition and reduces the prices of products. There is also stiff competition from well-established companies such as McDonalds.

Restaurants Industry 5 Force Analysis

There are many businesses operating in the Restaurants industry. This means that competition significantly high. However, a more detailed analysis of the industry will enable Fine Dining to establish effective strategies that will enable it wedge through the competitive market. Therefore, this section presents Porter’s 5 Forces analysis of the restaurants industry:

Industry Rivalry

There is significantly high industry rivalry in the restaurants industry, especially the fast-foods sector. Many companies such as McDonalds, Coffee Bean, Starbucks and other local cafes are competing for the same market with minimal differentiation in the products and service offered. As a result, there is excess capacity in the industry, and a new entrant must convince consumers that products offered are highly differentiated and targeted in order to gain significant market. The demand for conventional foods is declining, and thus organic foods will have a cutting edge in the industry.

Barriers to Entry

There is medium to high barriers to entry of new restaurant operators. Low capital is required in establishing a restaurant since initial costs and low need for market analysis enables the entrant to establish operations. Due to limited product differentiation, new entrants find it easier to enter the market. Medium barriers to entry make it easier for new entrants enter the market and thus increased competition.

Threats of substitutes

Since the restaurant established shall provide a big range of products and services, the threats of substitutes is likely to be significantly low. This is so because the substitute to a product is more likely to be on the menu of the restaurant. For instance, alcoholic beverages may be substitute for coffee, but the restaurant shall have sections where alcoholic beverages are dispensed.

Power of the Supplier

There is medium-to-high bargaining power of the supplier in the restaurants industry. This is especially when the supply of organic foods is concerned. Although there are many suppliers wishing to work with any restaurants, supplying conventional restaurants cuisine, there are a few who have purely organic foods and this gives them a bargaining power. Suppliers can thus increase their prices and affect the bottom line of the company.

Bargaining power of the Buyer

Just like the preceding section, the bargaining power of buyers is medium-to-high. Even if the prices of differentiated products go up, buyers will still be willing to purchase from a restaurant offering the products. However, buyers can buy their products from other restaurants. Fine Dishes has not yet established more branch networks and thus will be disadvantaged in this regard.

The Internal Environment Analysis

Strengths

Internal strengths of a company are pillars that can be used to overcome weaknesses and utilize the opportunities to overcome threats from the external environment. Fine Dishes shall be among the first restaurants to emphasize on the production of highly differentiated healthy foods that extensively composes of organic products. This will enable the company to leverage itself in the restaurants industry and thus appeal to the market. In addition, strength lies in the good customer experience from experienced and dedicated human resources. The services provided by Fine Dishes will be of top quality and efficient. This will enable the company to use this as a marketing strategy.

Weaknesses

Just like any other startup company, Fine Dishes will suffer from the weaknesses of low brand recognition in the market. Other established brands such as McDonalds and Starbucks have strong reputations and well known in the market. However, they do not offer the kind of products that our restaurant shall provide. This will be a leveraging aspect of the restaurant. And as consumers begin to note the difference, the brand name shall develop steadily.

Goals and Strategies

This section entails the objectives and strategies that the company shall implement in order to increase its operations and attract a high market share.

Market Share expansion

Since the business is a start-up, we will need an extensive marketing and product awareness strategy that will expose the products and services provided by the company to consumers. Our business aims to become one of the top competing restaurant brands in the restaurants industry. In order to achieve this, more financial resources must be allocated to the marketing department. Currently, the market is highly competitive. Therefore, our business seeks to achieve a 10% market share in the first two years, and maintain the market at 15% in the next three years as we seek to expand into new markets. The company is capable of achieving more than 30% of the market, as a strategic objective, because of the highly differentiated products that it will offer.

Innovation and new product development

In order to acquire new customers and maintain existing ones, the company shall constantly engage in innovation in product and services provided to the market. Innovation will not only be done in physical products and services, but also in the operations and processes engaged in by the company. Innovation and new product development shall be the main pillar upon which the restaurant shall achieve its strategic goals. Therefore, it is imperative that at least 5% of the total sales revenue be apportioned to innovation and new product development.

Development of human resources

At Fine Dishes, we will recognize the important role played by employees. As such, there will training and development programs for employees. Employees must be motivated to provide competitive service to customers. Various means of employee motivation will be used to ensure that they are driven to achieve organizational goals. For instance, aligning individual goals with organizational goals will enable us to tap the self-motivation from employees and thus accelerate the process of achieving organizational goals.

Financial stability

Financial stability is a strategic goal of any given business. By aligning the interests of shareholders and growth and development of the company, we will be able to strike a balance between the two and prevent the development of agency conflicts. The business is still in its initial growth stage and thus more capital will be required for growth and expansion. However, if we will be able to achieve the aforementioned objectives, then it will be easier to achieve the objective of financial stability in the medium-and-long term.

Within the initial operational period, the restaurant will seek to increase its revenue base by developing a strong revenue model. As we differentiate and target niche markets, it will be easier to achieve high sales and thus be able to fund other developmental strategies. The following is a financial forecast for the restaurant for the first three years:

Sales Forecast
Sales	YR 1 ($)	YR 2 ($)	YR 3 ($)
Food and Liquor	820,000	950,000	1,200,000
Catering	130,000	140,000	170,000
Other	0	0	0
Total Sales	950,000	1,090,000	1,370,000
Cost of Sales	350,000	400,000	700,000
Margin	600,000	690,000	670,000

Risk Planning and Contingency Plans

According to the sales forecast presented in the preceding section, it is highly probable that the business shall pick up and establish in the industry. However, we had also highlighted the risks inherent in the external operating environment through the SWOT and Five Forces Analyses. Therefore, in case there is cut-throat competition such that it is hard to proceed past the third year of operation, there are two strategies that the business may opt for.

The first strategy as an exit alternative is seeking a potential partner to enter a merger. This will ensure that the operations of the business are sustained and that is continues to grow. However, it fails to materialize, the last option would be is selling the operations to other already established restaurants. The second strategy would endure that shareholders retrieve their invested capital, which employees are absorbed into a new organization.

Action Plan for Strategy Implementation

In order to ensure that the established goals and strategies are effectively implemented, Fine Dishes has set aside enough capital that will ensure that there is no setback in terms of insufficient funds. For instance, employees are the key resources for the development of the company. As such, compensation for employees will be out of the revenue from operations for the first three years. Employees are thus guaranteed of their compensation and thus have motivation to discharge their full potential.

Marketing strategies will be done using all the relevant media channels. More emphasis shall be given to digital advertising platforms such as Facebook, Twitter, and other social media platforms. Electronic and print media shall also be used at local level. As outlined in the previous section, sufficient resources will be allocated for advertising and marketing campaigns so that the processes run seamlessly.

The chief financial officer will oversee the movement of financial resources within the business and with other external stakeholders to ensure that there is efficient utilization of financial resources. Through effective planning and budgeting, we expect the business to be stable financially, and be able to forecast future financial situation for earlier preparations. In case the real variables deviate from the forecasted values, quick actions shall be taken to prevent further deviation from the benchmark.

Evaluation and Control

Strategies will be evaluated based on their direction and magnitude. Therefore, there will be a set benchmark against which strategies shall be evaluated; and the company shall use a balance scorecard. The benchmark shall be established using the industry average, so that we do not deviate from the industry too much, and that we do not become too aggressive that we strain our financial resources. Whenever there is a significant deviation from set objectives, corrective measures shall be effectively implemented.

Conclusion

This initial strategic plan contains the strategies and steps that the new company will implement to ensure that it penetrates the market and offer competition to already established restaurants. The plan has evaluated the external and internal environment within which the company shall operate, and has established that the company holds a competitive advantage due to its ability to provide organic and healthy foods to its target market. Although there are risks in the operating environment, this plan has highlighted some of the adverse impacts of such risks, and has provided alternative courses of action should the venture fail to pick up: the exit strategy. The action plan for strategy implementation shall ensure that implementation of foretasted strategies are in line with the set targets. In case there are deviations in the achieved goals, the evaluation control mechanism shall be used to ensure that corrective measures are applied within time.