Frank's All-American Barbeque Business Case Study (Case Study Sample)

Frank’s All-American Barbeque Business Case Study
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Question 5: Factors that lead to success of a second business venture.
Frank’s all-American BarBeQue is a successful business due to the owner’s principle of offering best food that attracted and retained the customers, unlike much advertising done by other similar firms. Robert, the owner's son wants to expand his father's business in a new location. He has put up measures to ensure that the new firm becomes successful as the parent business.
Business location
The management had done significant research in determining the location of the new venture, and several factors had been considered such as population density, income and total population. Situating the business in Darien, Connecticut, was the best place since there was high-income earning population, the population density was high, and many residents had families unlike other surrounding areas such as Fairfield, Westport, Easton and Norwalk. The outlet in Darien would be large to serve many customers and offer takeout services. The opening of the second restaurant is projected to increase sales, and adapting to the new location will not be limited since Frank’s all-American BarBeQue had been selling in the region before. The business is planning to sign a contract with a major supermarket and sell its products across New England.
Products and services offered
Frank’s all-American BarBeQue products include the finest cuts that were desired by consumers. The meats had gained popularity because of their slow-smoked and slow-cooked nature. The meats offered include; ribs, beef, pork, and chicken. The award-winning sauce varieties will be used to serve these meats, which involve the major styles of barbecue cooking at Frank's. These products are meant to attract more customers in Darien as it does to the mother business.
Competitive advantage
There are only four barbecue restaurants in Connecticut, and it shows that there is limited competition for the new firm. The prominent reputation of Frank’s all-American BarBeQue awards the new firm a significant advantage over other restaurants in Darien. Frank's being the restaurant that most supermarkets vie marketing their barbecue sauces, gives the new business a competitive advantage. Most new firms excel when their mother businesses have gained awareness in the market (Morelli 2006).
Web marketing
Frank’s all-American BarBeQue has been slow in online marketing, their website was simple and provided minimal information. After eight years of website creation, the website had the only list of menu items and telephone number of the restaurant. Robert is an expert in web development; he plans to provide an excellent site with more content and capable of appealing to customers. The site will include menu listing corresponding to their images. Online ordering of takeout foods will facilitate quick customer service as they will be available for pick up upon arrival. Facebook and Twitter accounts of Frank’s all-American BarBeQue will link the website to promote social media availability. Customers will post comments about their experience with the products and services offered at the premises. The new online platform will facilitate new client relations. Customers will be requested to enter their names and email addresses so that they could get notifications to keep them informed of the special rewards and offers on occasions such as holidays and birthdays. Relationships build between the business and its customers will enhance brand loyalty (Cadden & Leuder 2012).
Question 6: pricing strategy of a new product.
Prices of restaurants industry fell in 2009 due to the decrease in sales. The cost of products increased again in 2010 by 0.75 percent. Price competition is significant in the restaurant industry, due to the instability in travel by people on personal and business levels. There several factors that will affect the pricing of the firm’s products in Darien. The two products that Frank’s all-American BarBeQue new outlet will offer include; products that are ordered from the menu and the great combinations that will be introduced such as the main course, two side dishes, and a dessert. These meals are offered to the customer after receipt of an order.
Due to an excellent competitive position of Frank’s all-American BarBeQue in the restaurant industry, the business might choose to involve smart pricing in its pricing strategy where, the cost of products is based on the value to the customer. Location of the premise where there is high population density and high-income inhabitants will trigger higher prices due to an ability of the people to buy the products (Cadden & Leuder 2012).
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Pricing above competitions can reward the company more due to the quality services offered by the restaurant. The firm’s marketing mix is well defined to support the pricing strategy. The cost of online ordering of food is expected to be higher than the cost of ordering from the menu; this is due to the production costs and the time for preparing such food to suit customer expectation. There is an extra cost of packaging incurred.
Price flexibility can involve the pricing of new foods that are ordered. Customers' preferences vary, hence for the same food there would be a different cost of preparation and packaging. Offering discounts and allowances also affect the pricing of the product. These alterations in price are guided by business policy.
The new business might involve price bundling as a strategy to determine the cost of the variety of meats ordered together. When a customer orders complementary foods at once, the business might charge a total price that is lower than if sold separately. The analogy to this strategy is that increase in sales will reimburse for a lower profit margin.
Frank’s all-American BarBeQue may involve gross margin pricing in determining the prices of their products in the new location. Cost-oriented pricing does not forecast customer demand or business condition. Since the firm is a major player in the industry, high sales volumes are expected, and higher profits are realized. The price will be favorable to consumers since the cost of food will be related to the cost of preparation. Break-even price can be used on the new food varieties that will be introduced, and this is put to cover all the expenses that are incurred in the production of the food products and services. The total cost includes fixed cost and variable cost. Fixed cost does not change in case production increases or goes down. Rent, for example, does not vary. Variable costs are set to change with time (Ottenbacher, Gnoth & Jones 2006).
Question 7: Factors to consider in choosing a business location.
Darien, Connecticut was the most favorable location for the second restaurant. The factors considered suited the location of the premises unlike other places considered.
Population
There is a relatively high population in Darien, other regions such as Fairfield, Westport, and Norwalk have relatively higher population than Darien. Other important factors were considered other than population, which led to choice of this location such as the availability of disposable income and travel times. High population means there would be readily available labour and a market for their products.
Population density
Darien did not record a higher population density among the regions considered, but the number was significantly close to the leading towns. Population density refers to the number of people living per unit area. Unlike income and travel times, it is not sufficient to base the choice heavily on population density.
Average income
Average income was an important factor in the selection of the Darien as second business location. Darien has a high average income which, means the population has a higher disposable income to be utilized on eating out. Hence, with high population and population density within the region the business can record high sales.
Travel times
Travel times is relatively higher in Darien and denote the number of possible customers for the services offered by Frank’s all-American BarBeQue. People who travel a lot have less time to prepare meals in the houses, hence viability of prepared food is realized. The location near a railway station is ideal to attract commuters. The restaurant has enough parking to accommodate future customers.
Other factors that determine a suitable place for locating the business include, nearness to suppliers, adequate distribution channels, and available space for future expansion.
Proximity to suppliers
Frank’s all-American BarBeQue depends on various to supply different kinds of meets to their premises. Location close to these suppliers is necessary due to the perishability of the product and reduction in profit margins due to transportation cost (Andaleeb & Conway 2006).
Distribution channels
Distribution channels have not been considered well. Only one major supermarket in the region has been deemed to supply their products to New England. It will be cumbersome initiate this process since distribution strategies vary depending on various units that undertake this procedure (Bublitz & Peracchio 2015). Involving several channels in distributing their product will increase awareness of the products offered by Frank’s all-American BarBeQue hence increase in sales. Since not all people shop at that major supermarket.
Space for future expansion
Regarding growth in sales of Fr...