Gloagburn Farm Shop And Coffee Shop - Essay Example

? Gloagburn farm shop and Coffee shop INTRODUCTION Gloagburn farm shop and coffee shop, opened in 2003, is beautifully located in Perthshire countryside with a farm shop selling wonderful farm grown products and a coffee shop that offers a delightful homemade menu and organic wines (Gloagburn, 2012). The restaurant also offers take away and picnic arrangements. Though the firm had previously won several awards in various categories, with the rising competition its future doesn’t seem very promising (PKC government, 2012). A situational analysis has been conducted using SWOT and Porter’s five-force analysis to assess its present situation and its future progress. 1.SWOT ANALYSIS 1.1Strengths 1.1.1 Products Gloagburn has a nice breakfast and lunch offering with options like porridge, eggs, bacon brunch and various coffee options. For lunch they offer fresh soup, sandwiches, baked potatoes and fresh bread etc. they also have a wide dessert variety like fruit crumbles, pies, cakes scones and different tarts to name a few. Such an offering is appreciated by the customers as the products a farm fresh that make all the difference (Gloagburn, 2012). The restaurant has also won Scottish Food and Drink Excellence Award 2009 and many other awards in 2004 (PKC government, 2012). 1.1.2.Restaurant environment The main strength of the coffee shop is its location and its environment of a farmhouse. Customers get a feel of the countryside, which is its main competitive edge. Away from the hustle of city life the serenity and the friendliness of the place is what attracts the customers (Gloagburn, 2012). The coffee shop has smartly marketed its competitive edge and has also stood by it by delivering the right environment that they have claimed they would give its customers. The customers are pleasantly happy and since there is both an indoor and outdoor facility of seating, they can enjoy the place in all weathers. Moreover, the place is also child-friendly which opens its doors to another market niche (Pahl and Richer, 2009). 1.1.3 Food quality The food quality is another thing that the customers rave about. This is because every food item is farm fresh which makes it more attractive for the customers. The food is fresh and has a different taste altogether which is something that the competitors cannot replicate so easily. 1.1.4 Ingredients The ingredients are another factor that give the SME its competitive edge over the competition. This is because not every restaurant can boast to have in-grown ingredients like turnips, potatoes, fresh meat etc. 1.1.5 Low cost of production 1. 2 Weakness 1.2.1 The service The services was commendable when the restaurant was smaller, however, with the expansion by increasing the seating area outdoors also, the service is not as sufficient as before. This is because every order is prepared from scratch, which is good however, the wait for meal to arrive is long and the customers have to wait for a long time. The restaurant was fine with a smaller setup however; there are issues especially in terms of services when the restaurant increased on the size. There were some complaints regarding the attitude of the waiters towards the customers, which could in turn be bad for the customer flow and ultimately have a bad impact on the restaurant reputation. 1.2.2. Self-suppliers This is though considered a strength but it is also a weakness. This is because the supplies quantity is limited and thus there is only a certain amount that the restaurant can produce. After this limit is exhausted, more supplies cannot be obtained and thus this limits the expansion of the restaurant. Moreover, if on a particular day, the customers’ demand exceeds the farm’s capacity to produce, the customers will be disappointed. On the other hand, if a commercial restaurant is considered that outsources its supplies, it may not face this problem as it may over stock or under stock depending on the demand predictability (Gloagburn, 2012). 1.2.3 Losses in terms of decayed products. The restaurant may also pre-stock finished food items like bread etc which may go stale if not sold and thus the restaurant bears the complete loss. However, in the case of other restaurants such items could be returned to the suppliers and the restaurants may not bear all the losses incurred in such a manner. 1.2.4 Caters to a niche The restaurant has a very defined customer profile like those that are looking for a relaxing morning and have the option of bringing along kids, which everyone may not appreciate. Moreover, it is for those who can spare a lot of time for breakfast as every product is prepared there and then, it takes more time. Those working and looking for a quick breakfast before work may not want to come in regularly. 1.2.5 Location The restaurant is located in such a way that there may not be room for expansion. Even if done so, it may be at the expense of the very environment that the customers are coming in for. 1.3 Opportunities 1.3.1 Expansion opportunities Gloagburn has the opportunity to grow bigger as it has a lot of demand, as the customers love the breakfast routine in such a farm environment. The demand for such places is likely to increase because people may want a get away from the hustle and bustle of the city life and may opt to come here. 1.4 Threats 1.4.1 Expansion options The restaurant may not have too many expansion options. This is because to expand, it will eventually exhaust the space that it currently has. On the other hand, commercializing the place will rip it of its initial competitive edge that is the rural feel that the customers have with the whole environment. Moreover, having the restaurant chain in different parts of the city and country or even going global, may not be feasible for Gloagburn as it may not be easy to replicate a similar environment unlike McDonalds. Thus the restaurant may not have a sustainable long-term expansion plan that may be workable. 1.4.2 Upcoming competition Seeing the success of Gloagburn, new restaurants may come up with similar environments and a farm-like environment that may give tough competition to Gloagburn. The SME needs to improve its management so that it may be able to compete with such restaurants. The new restaurants may be better in nature and managerial skills and thus may give an outright competition to Gloagburn. This in turn could be a major threat unless the restaurant decides to take steps to improve itself by working on its weaknesses. 2. PORTER’S FIVE FORCES 2.1. Bargaining power of buyers There is low bargaining power of the buyers. This is because there are currently very few restaurants that have an environment like that of Gloagburn. The farm environment is not something that every restaurant can replicate nor can the customers find such an environment in every nook and corner. Moreover, the products are very fresh and that is something that could make the customers come back again for more. The price factor however, is something that could influence the decisions of the customers (Tripadvisor, 2012). This is because customer reviews reveal that some of them think that the prices are higher and that the customers are not getting value for money at Gloagburn (Beamish, 2005-06). 2.2 Bargaining power of suppliers The bargaining power of the suppliers is low. This is because the restaurants owns most of its supplies and thus has full control of the price and quality of the products that it produces and supplies to the restaurant. But where supplies, are concerned, their farm supplies eggs to the local shops in Perthshire. The rough breakdown of the farm is 40 acres potatoes, oil seed rape grown on 40 acres of land, turnips grown for the shop and supermarkets on 30 acres, grass on 30 acres to feed the cattle, 300 acres of seasonal barley, oats on 60 acres and peas for the freezer pea market on 40 acres (Gloagburn, 2012). 2.3. Substitute products The threat of substitute products is low because not many restaurants are offering a similar environment and menu selection. Moreover, the products are freshly produced which gives the restaurant a competitive edge. Thus the threat of substitute products is low. However, it cannot be ignored that the market has different products to offer and breakfast with a vast menu is easily available elsewhere also. 2.4. Threat of new entrants Since there is a growing demand for Gloagburn, there is a threat of new entrants in this niche. The demand is growing for such eating-places, which indicates that the industry hasn’t matured yet and there is a lot of scope for growth and investment. Small businesses entailing restaurants and such excusive services are being set up and thus the threat of new entrants is ever increasing. 2.5. Rivalry There is high competition in this niche. This is because since there is a demand for such an environment, services and products, new restaurants with similar services have sprouted that are giving a tough competition to Gloagburn. Moreover, there is rivalry from the existing restaurants that have increased their menu selections and improved their quality giving further competition to Gloagburn. 3. FUTURE ANALYSIS AND STRATGIES 3.1 Promotion 3.1.1 Promoting products and services As far as the promotion is considered, Gloagburn has concentrated on two things- firstly the products which are fresh from the farm and second the environment which gives the customers something different to come back to. When the customer comes in there he expects a countryside atmosphere and is never let down. Moreover, the restaurant is a family business that gives it a more homely environment and is warm. There is an in-house shop also where customers can purchase jam, marmalades, oatcakes, chutneys etc. In addition there are also potatoes, turnips and eggs etc that the customers can purchase. However, Gloagburn should concentrate on products that are unique like cakes or chutneys that are prepared by special recipes so that the customers come back for these products even when they are not visiting the restaurant. They can expand their business by marketing these products and at the same time such market presence will attract more customers to the restaurant. Their promotional offers like win Christmas dinners may not be so appealing and there should be more innovative ways of attracting the customers. 3.1. 2 Online promotion Moreover, Gloagburn should also focusing on their Facebook and Twitter pages as they currently have only 1100 likes and their pages are not updated frequently (Facebook, 2012). Gloagburn should even make their websites interactive with online purchases, orders and blogs. Such interaction with the customers will increase the demand for the restaurant and will spread awareness. Blogs is another option where the customers can have candid opinions about the restaurant and its products and services. Online promotion is suggested because the business is on a small scale and such advertisement is affordable and within the firm’s budget. 3.2 Products and services 3.2.1 products The current assortments of products that are offered at Gloagburn are limited. There should be an increase in the menu and it should be more lavish and extended. Variants should be increased and every week or month, there should be an addition to the menu or it should be revisited entirely. The customers will welcome such a change. The restaurant should also consider hiring more professional cooks so that there is a variety in the menu selection and at the same time the service is more prompt and to the liking of the customer. 3.2.2. Services The services should be improved and the staff should be trained on a regular basis. This is essential so that they deal with the customers professionally and that there are fewer customer complaints. The staff should also be motivated with rewards and perks to keep them interested in their work. 3.2.3 customer feedback Lastly it is very essential to take customer feedback and to incorporate the suggestions by the customers. There should be proper feedback forms given to every customer at the end of their meal and their suggestions should be given importance for improving quality of products and services and for the future growth of the firm. 3.3. Pricing strategy According to some customers, the prices of the products are a bit steep as they feel that they are not getting value for money. The market prices are very competitive and the customers easily shift to other restaurants that in turn indicate that the restaurant cannot build loyalty based on the pricing strategy. Gloagburn needs to lower their prices and at the same time they need to maintain their quality bringing new menu selections for the customers. Perhaps the customers may not mind paying more for products that are unique and service that is exceptional. The restaurant should keep low profits and build on a strong and loyal customer base. 3.4 Place and distribution The restaurant is not marketed as a high-end eating place and is a friendly and warm place for customers yet the high prices does not match the environment offered. Because of the positioning of the restaurant as a countryside place, it is limited where expansion is concerned. Gloagburn can expand in a countryside location only. Moreover, it can also increase its timing and open earlier than 9 am for breakfast and also offer dinner that they currently don’t. References Beamish, K. (2005-06). CIM Coursebook 05/06 Marketing Planning. Routledge. Facebook page (2012). Accessed on October 30th 2012. Available at: http://www.facebook.com/Gloagburn1 Gloagburn, (2012). Accessed on October 30th 2012. Available at: http://www.gloagburnfarmshop.co.uk/index.htm Pahl, N; and Richer, A. (2009). Swot Analysis - Idea, Methodology and a Practical Approach. GRIN Verlag. PKC government. (2012). Accessed on October 31st 2012. Available at: http://www.pkc.gov.uk/Promoting+Perth+and+Kinross/Perthshire+Produce+Guide/Awards.htm Tripadvisor (2012).http://www.tripadvisor.co.uk/Restaurant_Review-g186565-d2173062-Reviews-Gloagburn_Farm_Shop_and_Cafe-Perth_Perth_and_Kinross_Scotland.html Read More