Internal and External Environment of Crepes and Waffles (Case Study Sample)

Name

Affiliation
30/08/2022
Executive Summary
The aim of this report is to perform a critical analysis of the position of Crepes & Waffles in the company’s industry and the potential of the restaurant to improve its competitive advantage as well as its ability to sustain earnings long-term. This will be achieved through the use of tools for analysis like the External Factor (EFE) Matrix, Porter 5 Forces, VIRO and value chain analysis, and SWOT analysis. The EFE Matrix and Porter five forces will analyse the external environment of Crepes & Waffles, VIRO and Value Chain analysis for the internal environment analysis, and SWOT analysis to facilitate the identification of the strengths and weaknesses, threats and opportunities of the company internally. Finally, the strategic recommendations will be presented and analysed based on their suitability, acceptability, and feasibility.
Table of Contents
1 Introduction………………………………………………………………………….4
2 External Analysis……………………………………………………………………5
2.1 Porter 5 Forces………………………………………………………………………5
1 Threat of New Entrants………………………………………………………….5
2 Competitive Rivalry……………………………………………………………..6
3 Bargaining Power of Buyers…………………………………………………….6
4 Bargaining Power of Suppliers………………………………………………….6
5 Threat of Substitute Products……………………………………………………7
1 External Factor Matrix of Crepes and Waffles…………………………………..7
6 Key Opportunities……………………………………………………………….8
7 Key Threats……………………………………………………………………..10
3 Internal Analysis……………………………………………………………………11
2 Resource-Based Review (RBV)…………………………………………………11
3 VIRO and Value Chain Analysis…………………………………………………12
4 SWOT Analysis…………………………………………………………………..15
4 Strategic Recommendation…………………………………………………………16
5 Recommendation 1……………………………………………………………….16
6 Recommendation 2……………………………………………………………….17
7 Recommendation 3……………………………………………………………….19
5 References………………………………………………………………………….20
6 Appendix…………………………………………………………………………...23
1 Introduction
Crepes & Waffles is a famous international restaurant in Medellin, Colombia, also operating in nine countries with several branches, 77 of which are located in Colombia. The first Crepes & Waffles restaurant was opened in 1980 and was located at Bogota and was a French crēperie (Melissa, 2014). The company has its first location as maintaining which was opened in 1955, the same year the business went international, locating its first restaurant at Eucador (Melissa, 2015). The restaurant is currently facing a collapse on sales globally as a result of the global pandemic of 2020. This was communicated through the reports for the first quarter of 2022 which specifically highlighted a 55% average reduction on the restaurant’s sales. Despite the fall in the restaurant’s sales, the restaurant industry remains competitive and to beat this competition and maintain a standard, Crepes & Waffles must endeavor to maintain and retain its competitive advantage.
2 External Analysis
Turkay, and Sengul, (2011) explained that the purpose of an external analysis is to gather information concerning the position of a company in its external environment, providing the opportunity for the company to respond to this information accordingly. It also helps for the identification of factors affecting a company’s competitive advantage.
2.1 Porter 5 Forces
To accurately analyse the external environment of Crepes & Waffles, this analysis has identified the threats of entrants, level of competition, power of buyers and suppliers, and market substitute threats. Crepes & Waffles must invent measures for the improvement of the restaurant’s ability to adapt to external events in its macro-environment.
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Fig.1 Porter five forces.
2.1.1 Threat of New Entrants: Relatively Low, Rating 1.
Food and beverage services often provided by restaurants are on the increase daily. However, it is very difficult for new companies to attain the success level of previous companies in the industry. New entrants in the industry are challenged by economies of scale which is usually promote through the efficiency of production and other important operations (Lee-Ross & Lashley, 2010). Additionally, to enter an industry, new entrants must be fully aware of fixed and operating costs to ensure cost advantage (Hill & Jones, 2014). Cost advantage could be attained through the use of purchasing products in bulk and receiving discounts from suppliers. In view of this points, the threat of new entrants in this industry is low.
2.1.2 Competitive Rivalry: High, Rating 5.
It is a well known fact that the higher the number of competitors, the tougher competition in the restaurant