Mystica Restaurant Consulting Report B00311109

Mystica Restaurant Consulting Report B00311109

Working Title:

Mystica Restaurant Consulting report

Photo: Mystica Restaurant

-A critical assessment of Service Quality of Mystica Restaurant using Analytical Framework & Its strategic responses to the primary issues affecting it.

Module Name:

Strategic Thinking and Value Management

Submission Date:

21.07.2016

Submitted by:

B00311109

Table of Contents

1 Executive Summary

2 Introduction

2.1 Problem Statement

2.2 Strategic Challenges

2.3 Report Objectives

3 Company Background

3.1 Mystica Competitive Profile

3.2 Company’s Key products and Services

3.3 Company’s Currant Strategies

2.4 Company’s Structures

3 Literature review:

3.1 Service Quality Defined:

3.2 Strategic Service Quality Objectives:

3.3 Limitation to Service Quality

3 Situation Analysis:

3.1 Competitive Analysis (Porter’s Five Forces)

3.1.1 Key Challenges: Competitive advantage

3.2 Performances Analysis (Balance Scorecard)

3.2.1 Key Challenge: Selecting a new location

3.3 Perceptual Map

3.4 SWOT Analysis: External & Internal Factors:

3.5 Management Overview (Business Canvas Model):

3.6 Marketing Strategy

3.7 Idle Time and Unproductive process

3.8 Learning Outcomes:

4 Proposed Strategies for Service Quality:

4.1 Motivate Employees:

4.2 Increase Local Marketing Efforts:

4.3 Increase Customer Satisfaction:

4.4 Reducing the Idle time and unproductive processes:

5 Action Plan

5.1 Proposed Implementation Process:

6 Conclusion

7 References

Executive Summary

In this competitive business world, business organizations may face challenges everyday in their operation and lead changes in their company environment but it does not necessarily create new values or strategies. Having implementing the change in a communicative way across to the business stakeholder’s may bring long-term sustainability and profitability for the business. “The company has to consider its strategy depending on the company’s size, structure, strategies, skills, policies, systems, and culture as well as shared values” (Parnell, 2010)

Hence, the main purpose of this report is to look at the current strategies of Mystica Cuisine via in depth evaluation of its strategy and operations over its performance. This report will also focus on the strategic implementation of analytical frameworks as significant tools for enhancing the performance for Mystica Cuisine. The efficiency of the company’s performance, productivity and competition will be reviewed by using its financial performances, customer feedback, and service rating.

The objective of this report intends to examine the urgent strategy modification plans over Mystica’s current strategy by installing diversified products and services, developing a marketing plan, selecting a new location and followed by recommendation.

1 Introduction

In the competitive catering industries,an evaluation of business environment is crucial by the company to create value and a unique capability for enhancing business performances. Businesses have to understand the constant evolving trends in response to changing customer demands and expectation. Failing to understand the market, customer trends and demand will keep the business away from competition, business growth and sustainability. A company has to familiarize its vision by articulating the key challenges and business phenomena and implementing strategic desgin to ensure long-term sustainability and growth. The current scenario of Mystica Cuisine is challenging and it is striving for survival in the competitive market.

1.1 Problem Statement

Mystica is one of the top-rated modern Indian cuisines in Addlestone. In recent days, Mystica is facing tremendous competition in the survival context due to intense rivalry and substitute products available in this area. Mystica is constantly striving to offer quality food, quality pattern, and service quality in demand of customer’s expectation. But, Mystica restaurants have failed to generate sufficient revenues over the few years and identify the gaps between the customer’s expectation and perception of quality service. In this competitive environment, failing to offer quality service to customer, decent working environment for employees will increase intense competition, costs and ultimately minimise profit margin etc.

This report indents to look at the Mystica Cuisine’s current strategies and profile. Based on the analytical analysis of the restaurant strategy and business phenomena, recommendation and implementation process will be designed.

1.2 Strategic Challenges

• Inefficient employees to offer excellent services
• Training and development challenge
• Staff crisis due to new policies on Immigrants
• Financial threat fromthe Britain exit from the EU
• Using the Idle timing
• Lack of technological development
• Failing to offer completive price

1.3 Report Objectives

• Provide an in-depth analysis of Mystica’s current strategic objectives,
• Provide a platform for suitability and continuous growth for Mystica restaurant using Balance Scorecard and strategic road map
• Design implementation plans of balance scorecard, SRM and Change model
• Highlight long term and short term implication of the proposed changes

2 Company Background

“Mystica Modern Indian Cuisine is a top 100 restaurant rated by top table (open table, 2016). Mystica modern cuisine was established in 2004 in the UK operating in Adllestone, Surrey; providing a range of foods and services mainly in Addlestone and across Chertsey, Virginia Water, Walton-on-Thames, New Haw, By fleet, Woking as well as Guildford in England. The Mystica cuisine has more than 6full time employees as well as 3 part-time and 4 delivery drivers. Mystica’s mission is to provide customers with quality service, wonderful atmosphere and quality food. It has a mission of having leadership locally and expanding this business across the UK by integrating total quality management and maximizes profit. (Mystica, 2016)

Key information about Mystica Restaurant:

2.1 Mystica Competitive Profile

Top Table (2016) - “Located in the Station Road in Addlestone, Surrey, Mystica is a stylish Indian restaurant with a chic and cosmopolitan ambience. With dark wooden floors, vibrant contemporary artworks, crisp white tablecloths and sofas upholstered in vibrant Indian silks, Mystica is a sophisticated setting formeals with friends, family and colleagues. The kitchen combines authentic Indian flavours with a unique contemporary twist, and favourite dishes include the lamb rogan josh – a thick, textured curry garnished with chunky roasted tomatoes; chicken saali – lightly grilled chicken served sizzling in a thick coconut and cream sauce flavoured with apricots; and the king prawn jalfrezi – a stir-fry of peppers, onions and fresh chillies. Mystica's wine list is diverse, with 18 bottles for under £20.”

2.2 Company’s Key products and Services

Mystica mainly serves three types of services to the customers such as dinning-in services, takeaway services and free home delivery services.

The restaurant has just-eat order taking facilities through online but hasn’t introduced the mobile app application yet as the competitors taking advantages of it. Mystica does take big takeout order for celebration or parties and make free home delivery or collection. Mystica donates some free food vouchers to the local charity if local charity comes to the restaurant.

2.3 Company’s Currant Strategies

Mystica’s current strategies are very simple and it intends to succeed by giving a combination of excellent food and quality service to the local community. Mystica has little marketing strategy such as take-out menu distribution, having two big sign broads on the window describing about the restaurant promotion. Mystica mainly focuses on the local customer and has a website about the restaurant which does not appeal a wide range of customer from all walks of life. It intends to keep its standard high but recent poor condition in kitchen led the health visitor rank the restaurant three star. Mystica tries to accept almost all types of discounted card to offer local customers but these promotional offers downgraded the reputation of the Cuisine.

2.4 Company’s Structures

Mystica Cuisine is situated in the high street of Adllestone Town, which is near the Addlestone railway station. Mystica has 6 full time employee, 3 part time employee, 4 delivery drivers, the owner and the manger. The owner and manager undertake initiatives to run the operation of the business and hire the staff from the London based agencies or mouth of words from the known people.

3 Literature review:

The main purpose of this literature review is to critically appraise the term “service quality”, service quality model and evaluate issues for research methodology and research question based on the critical analysis of primary and secondary literature. Primary sources for this study includes unpublished Mystica reports, published reports on newspaper, online and websites where secondary research will be based on academic books, journals, textbooks and the Internet using Athens, Emerald, Google books and Google scholar.

Blumberg et al(2011, P-86) states “the main aims and objectives of literature review is to establish the context of the problem or topic by reference to previous work and understand the structure of the problem.” Saunders et al (2009, P-61) states, “reviewing the literature critically will provide the foundation on which the research will be conducted.

For this research study the researcher will use deductive approach to develop a theoretical and conceptual framework in which ideas and theory will be tested using data. Saunders et al. (2009, P-61)

This literature review will develop a linkage between different service quality dimensions used in hospitality and catering sectors.

3.1 Service Quality Defined:

Service sector, especially hospitality and catering sector has assumed the greater importance of service quality over the last few decades. “It is estimated that ‘doing things wrong’ typically accounts for between 30 and 40% of a service organisation’s operating costs. (Ghobadian, Speller and Jones, 1994, p45.)”

Simply, service quality is an approach to manage business processes and ensure full satisfaction of customers as well as quality in service provided to consumers.

In this study, service quality can be defined as the differences between consumer’s expectation for quality service they received from hospitality industries and their perception of the service received.

In recent times, “service quality has been receiving much importance for its obvious relation ship with costs(Kellogget al., 1997, cited by Sureshchandar, 2002), financial performance (Nelsonet al., 1992; Rust and Zahorik, 1993; Rustet al., 1994, 1995, 1999, cited by Sureshchandar, 2002)”

A review of the service quality indicates that “service quality and satisfaction has indeed swelled enormously over the past two decades“(e.g. Parasuramanet et al., 1985, 1988, 1991, 1993, 1994a, b; Zeithamlet al., 1985, 1990, 1993, 1996; Carman, 1990; Finn and Lamb, 1991; Cronin and Taylor, 1992, 1994; Babakus and Boller, 1992; Brownet al., 1993; Teas, 1993a, 1994cited by Sureshchandar, 2002).

3.2 Strategic Service Quality Objectives:

Seth et al (2005) Managing service quality in hospitality and catering industries has to match the expected service and perceived to each other in order to achieve full customer satisfaction.

There are number of objectives of service quality in hospitality industries, specifically in Mystica Modern Restaurant. Such as:

• In the “age of customer” delivering quality service is considered an essential strategy for success and survival in today's competitive environment (Dawkins and Reichheld, 1990;Parasuramanet al., 1985;Reichheld and Sasser, 1990;Zeithamlet al., 1990, cited by Chowdhary & Prakash, 2007)
• Service quality is a holistic process of evaluating the total performance by identifying the conceptual framework. An appendix 1 shows a conceptual framework for understanding the interplay between service quality and productivity adapted from Parasuraman (2002).
• To increase organisational and individual effectiveness of various service quality dimensions.
• To give increased attention to customer-perceived service quality in order to survive in competition and develop customer satisfaction. (Negi, 2009)

3.3 Limitation to Service Quality

4 Situation Analysis:

Mystica Cuisine is situated in a highly completive geographical area with major competitors within the same industries. Mystica is also experiencing a major crisis of employee’s shortage due to less number of migrants and recent Brexit.

Due to certain internal factors, Mystica Cuisine is currently experiencing difficulties to maintain positive profit margin. The root cause of this downward is identified as unmotivated staff. Therefore quality of service severely decreased in response to the staff indifference and then Mystica is making financial loss on taking care unsatisfied customers’ meal and retraining staff. In order to establish and sustain in the competitive market and generating more revenues, an evaluation of the operational effectiveness of Mystica is drawn here.

(Source: Author)

4.1 Competitive Analysis (Porter’s Five Forces)

Mystica Cuisine is situated in Addlestone which is a very small town compared to its current town such as Guildford, Woking, Virginia Water, Walton-on-Thames, Chertsey and Weybridge. Within such a small town there are at least five major competitors to Mystica Cuisine. Each of these main competitors is an established brad to actively compete with Mystica Cuisine.

Mystica’s key competitors are Beijing Restaurant, Zall restaurant, Hawelli, Taj-Mahal Cuisine and Nillis tandoori. These competitors are within the same industries and serving sort of same foods and services to local customers and remote villagers. Due to intense competition Mystica is under tremendous pressure of ensuring quality service perceived by local customers.

4.1.1 Key Challenges: Competitive advantage

Due to intense competition, Mystica is failing to offer completive price to consumers, therefore competitors are taking Mystica’s regular customers away by offering value for money.

4.2 Performances Analysis (Balance Scorecard)

Due to location and intense competition, Mystica profit margin is calculated under performing. In 2015 Mystica has spent £2000 on take-out menu distribution and re-design the internal atmosphere by around £5000 to increase the growth of the business. Having seen high employee turnover and high price in supplies have hugely affected the company’s profitability.

4.2.1 Key Challenge: Selecting a new location

Due to financial losses annual, Mystica is now thinking to select a new location and identifying & evaluating the new location. A huge number of capital investments required completing the process. The Owner is concerned about the capital investment and relocating challenges he is going to face. The Mystica’s second key challenge is to find staff to run the business due to staff crisis and Britain exit from the EU.

4.3 Perceptual Map

Mystica has been placed at the second top along with local rivals on the Perceptual Map. Having compared to the other chains Mystica restaurant has still the higher quality due to a constant upgrading food menu according to the customer trends and demand. But, Mystica cannot charge higher of its consumers than competitors due to intense competition in the area.

4.4 SWOT Analysis: External & Internal Factors:

SWOT Analysis of Mystica Restaurant

4.4.1 External Factors

Opportunities

Mystica restaurant has been operating in the area for a decade and many customers frequenting to Mystica since it opening. Though Addlestone is a very small town but being demographically economic. Customers are coming back to the restaurant. Recently there is infrastructural development work going on for a big town mall, which may open the big market for Mystica Cuisine.

Threats

Mystica is mainly confronting challenges of competitive price and quality as its rivals are offering to the local customer. All the competitors are offering discounted price on collection, delivery and even free bottle of wine with minimum order of £20. Mystica may not operate in the completive environment unless it overcomes the competitive edge. The recent Brexit is also a big threat for Mystica as it has some of the employees from the EU countries. The government regulation on bringing overseas worker is very stick that may all substitute business more profitable. Treat of new entrant is still there

4.4.2 Internal Factors

Strengths

Having operated in the area for a decade Mystica is known as strong brand in the community. Recent identification of health problem in the kitchen and sales decrease and recognition of these problems and even willingness to solve these problems is incredibly outstanding for Mystica’s future. Mystica believes in “Kitchen is soul” policy that means Mystica is constantly trying to bring freshness, authentic, original menu for consumers.

Weaknesses

The main weakness of Mystica is very low motivation among the employees due to lack of training and development at the beginning stage. This negative effect may result in poor customer service and quality. At the same time, high turnover rate on restaurant industries put Mystica in risky situation. Mystica is struggling to balance staff in the kitchen and bar. Most of the time It has to hire someone new in average two month time. Most Asian people are hired to work for this cuisine. The closure of recruitment industries also creates staff crisis. Mystica operates with uncertain sales per week and past management practices, which are highly affecting its performance objectives.

4.5 Management Overview (Business Canvas Model):

In recenttime, the fundamental day-to-day operations of Mystica restaurant have been somewhat affected due to employee motivation. Employee relation with the management team is somewhat bitter due to lack of incentives, holiday payments, and flexibilities of work. Both the front of house including servers, waitresses, waiting staff, bartenders and the kitchen staff including chef, cook, kitchen porter have been affected which have resulted in unmotivated staff with no concern for quality service and well-being of the restaurant.

Recent health visit and ‘three stars’ by the health officer from ‘five stars’ show that the restaurant is going through turmoil situation in where change is ever necessary.