ABC Corporation decided to foray into a restaurant business with an investment of Rs. 2 crore. They expected a ROI of 10 % the initial broad distribution of costs was estimated as follows. Raw material cost 25% Manpower cost 22% Energy 28% Other costs 15% Profit 10 %
They decided to open a restaurant of 100 covers. The menu comprised of 15 items in various categories. The finance department was given a task to prepare a daily budget of income and expenditure to achieve a net profit of 10% over a year.
The company thought that the restaurant business is very simple and decided to keep the prices low to attract more customers.
Their menu consisted as follows
Items Selling Price Soup n.veg 40 Soup sea food 60 Starter non veg 80 Starter veg 50 Main course Indian non veg 160 Main course prawns 320 Main course lamb 225 Main course conti chicken 120 Main course lamb conti 160 Veg main course Indian 80 Veg main course conti 100 Salad non veg 60 Salad veg 40 Rice 40 Dessert 60
The restaurant opened with a fan fare and had very good response for 2 weeks. After that, they started getting customer complaints about the following: • inconsistency in quality of food, • portions sizes, • plate presentation, The customer base started reducing. At the end of year, the restaurant was at a loss. They hired a consultancy firm to analyze the problem. The analysis showed following results: Raw material cost 45 % Manpower Cost 20% Energy 30% Other costs 25 % Loss 20%
The consultant went through various Pre control phases like menu planning, pricing policies, methods of ordering food, purchasing methods, budget planning and execution on a daily basis and daily MIS system of revenue and expenditure control.
If you are hired as a consultant, how will you analyze the problem, prepare a budget and suggest the solution to restore the profitability and customer satisfaction. pl help me pl answer the question. i cant do that pl urgent pl help me
18 July 2024
ABC Corporation faces issues with food quality, portion sizes, and presentation, leading to customer dissatisfaction and loss of repeat customers. To restore profitability and customer satisfaction, they need to rationalize their menu, implement cost control measures, develop quality assurance standards, and prepare a detailed financial budget. They should also focus on service excellence, pricing strategies, operational efficiency, marketing, and promotions. A comprehensive consultancy report detailing these solutions can be presented to the management team.
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