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Background explanation for expansion operation
Customers are increasingly becoming conscious about their health and are careful with the foods they consume. Certainly, health conscious customers will not eat what is otherwise referred to as junk food every day. Most of them pay attention to the portion and ingredients of the food they consume. In this regard, Gallery restaurant has decided to expand its business to attract not only customers who want sandwiches but even those who may need other types of fast foods for breakfast. In addition, Gallery restaurant is keen on tapping the potential of high demand for other fast foods in the United States. This will help it increase its market share and therefore improve its profits.
Description of basic operations management principles
Gallery Restaurant is not only conscious of the customers’ health but is keen on increasing its market share while maximizing on the high demand for fast food in the US. The main goal of the restaurant is to provide customers with the best quality foods at reasonable prices and with friendly customer care facilities. In fact, this is the reason why Gallery Restaurant has numerous loyal customers across the country. There are two main sections to be looked at when addressing Gallery’s operations management principles: Firstly, Gallery has its own bakery and therefore does not subcontract other bakeries to supply bread. Therefore, the bakery forms a crucial part of the restaurant’s operations and logistics. Secondly, the restaurant has subcontracted suppliers for products other than bread. Instead of buying necessary ingredients from the market, Gallery gets them from suppliers and therefore it has created a strong bond between the suppliers and the restaurant. Ultimately, the management ensures that customers are fully satisfied and therefore don’t feel cheated when they buy the sandwiches. To achieve this, only highly qualified employees are recruited and they undergo further training on best practices of running a restaurant.
Operations and Supply Strategy for Expansion
Gallery Restaurant is a privately owned company. The ownership is made up of the finance and administration director who owns 40% of the share, the director of sales and marketig that has 30% share, and the operations who own the remaining 30% shares. Currently, the restaurant mainly consists of sandwiches for take-away customers. The business has continued to maximize on our revenue and has led to growth in profits every year. (West, Ford & Essam, 2010). This is why the management is focused on an extensive expansion strategy to further penetrate the markets.
The company has several brunches across the US. This approach has ensured that the company maximizes of the high demand for fast foods in the country.(Wilson, 2006) Although this approach increases the cost implications of regional supervision, it enables the company to cushion stores where sales might not be low. This has also helped in increasing the visibility of the company because customers can find stores in different states whenever they travel or migrate.
However, the company has realized that in order to attract more customers, it has to include additional fast foods for breakfast. In addition, it recognizes that most customers are keen on living healthy lifestyles and therefore there is need to introduce health foods.
Project Management Strategy
The business operates as a partnership. According to Gerald (2004), this is a business model, where two or more people come together to form a business and contribute management skills or capital to ensure that the business is successful. Therefore, the three partners of Gallery Restaurant share various responsibilities, profit and losses incurred by the company. However, the company operates with a flat organizational structure where every member is allowed to share his or her ideas that may contribute to the success of the restaurant. Smooth information flow supported by open communication amongst the members has eased the process of decision making. It is for this reason that all members agreed that Gallery Restaurant need to expand. However, this calls for expansions of the organizational structure to accommodate the changes. Therefore current staffing may be promoted and additional recruiting will be necessary.
The strategies are the tools, which are used for achieving the goals. (Gerald, 2004)Gallery will evaluate the suitability of the company’s sales through the two strategies: the replacement strategy, which would determine if the products are suitable for direct sale; the complementary strategy, which could help to determine if the products are unsuitable for direct sale. This would lead to the need of the business to analyze its market target througgh market segmentation, where the restaurant has identified the groups of middle and high income women as a target group. Therefore, the business can be able to provide different foods according to the needs of all the groups in order to enhance customer satisfaction and to increase the direct sales of the company.
New Product line and rationale for selection
Some of the foods that are given priority include doughnuts and indigenous foods such as sweet potatoes and yams. The suggested foods are based on the findings from the regular surveys conducted on the customers. Since the restaurant seeks to align itself with proper health for the customers, I suggest that you introduce indigenous foods and other fast foods that do not have so much fat. Product selection is the key to your success because if you introduce foods that may not be appealing to the loyal customers, they might feel disappointment and look for alternative restaurants.(Kelvin &Kotler, 2006) Nonetheless, the expansion process should meet the company’s demographic requirements. It would also be of great benefit if you focused on making use of customers who like shopping in the morning or evening. Most of them prefer buying fast foods either for evening tea or breakfast.
Strategic Capacity Management
One attribute that has contributed to the success of the company is employment of highly trained personnel. Experience is very important, especially in the hospitality industry (Kelvin &Kotler, 2006).Therefore, for any new employee to be recruited, he/she must have at least three years’ experience. Moreover, employees undergo trainings regularly in order to ensure that they remain up-to-date with skills needed to run the restaurant.
Furthermore, an experienced management team is also critical. Lucky enough, all the three managers of Gallery Restaurant are well trained and have passion for their business. The management constitutes of three very skilled and talented men who make a strong team. They have an ability to offer a sense of direction to the employees and form a collaborative environment for all stakeholders (Harvard Business School, 2007). They are also decisive in dealing with issues that arise on daily basis and come up with better strategies that ensure proper completion of work. Nonetheless, organizational learning is encouraged because people are free to interact with each other.
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