Q 1) What is the current positioning strategy? Is it working? Why or why not? Positioning strategy helps a company in creating its identity and its products/service it provides (Anderson, 2011). Café Bijoux offers a relatively low price for a cup of soup and a sandwich, while offering healthy and tasty meals to their targeted market (primarily workers at the City Hall). To keep the cost low, the management did not printed a menu instead it was written on a chalkboard and was updated daily.
In addition, the condiments were handed out to the customers as they picked up their orders. Business operations were from 10 am till 3 pm, mainly attracting customers from local surrounding business for lunch, specializing in homemade soup, fresh sandwiches, and salads. The positioning strategy was not successful mainly due to an unclear vision. Even though it attracted a niche market it was a great strategy of offering healthy foods, however it was not implemented effectively. There were complaints on several occasions that the restaurant could not be located, the mangers were aware about the conflict, but were unable to resolve it due to lack of financial abilities.
Furthermore, the restaurant was located beside a parking garage, which was used by the city hall employees and other public offices employees. The average arrival time for these employees was between 7:30 – 8:30 am and they leave around 4:30 – 5:30 pm, while Furthermore, management has failed to identify a clear strategy for the business. No clear vision has been implemented due to the business’ dysfunctions in general.
The café, only opens five days a week, caters to lunch specials, however, should be a breakfast and brunch getaway from the offices of many which hasn’t been the case. In addition, due to the scheduling of the hours of operations many potential customers are missed due to the café being closed in the morning and the evening, where many are entering and leaving the parking garage, which is directly in front of the Cafe. These potential customers are usually in need of an early morning bagel and coffee before enduring a long day of work.
Nevertheless, the majority of customers are very satisfied with the amount of serving along with the quality of their meal as well as the price paid. The strategy of being a low priced high value added has seen problems due to lack of customers which is affecting the bottom line drastically. This inevitable circumstance has put a hold on operations and started an investigation upon various neighboring competitors and their own strategies. Overall, the strategy is effective but not effectively used, which considers areas of error that include, a visible colorful sign, extended hours of operations, increased advertising, a stable menu, a catering opportunity, and a real café look which can distinguish itself from the rest of its competitors.
Q 2) What are the key reasons for the depressing sales and profits? Some of the key reasons for the dismal profits are primarily due to lack of control, and inexperience from both Julie and Mary, the co-owners and managers of Café Bijoux. The reasoning behind this claim is that a business that is not seen profitable is usually not. In addition, a real restaurant sign is not up and visible. A sign is a major gateway to success in a busy congested market which sees more than eleven businesses surrounding a one km radius.
However, Julie and Mary have been awaiting the funds to put up a sign, which has seen negative results due to lack of customers. The lack of customers stems from a poor business model that is implemented correctly. The Business model consists of healthy fresh foods with a low price. This definitely targets the right crowd, at the wrong time, literally. Scheduling of hours of operations are tremendously hurting the business, by opening at 10am and closing at 3pm. The major activity is lost from the morning peak of breakfast through to its late afternoon lunch/dinner slot. The mismanagement of hours of operations is costing the business a lot of money, and will continue to due to the environment that it does business in. Advertising and Marketing have also taken the back seat due to lack of funds, this is hurting the business and is definitely taking away from it.
The current business model, which entails a fresh and healthy living, does target many individuals in the current area such as, residential and other various offices. Furthermore, no take-out orders or catering initiatives have been implemented to increase awareness or capability. In addition, a fixed menu has not been created that should list the most favored items along with their prices. Losing out on this chance is another businesses’ gain, by not creating and distributing menus or listing the menu on an online website is a no brainer. This can be very cost effective considering mass production, as well as a free website that advertises small business ventures within the area. The break-even point is not even reached, so these negative figures are falling along with the co-owners.
Q 3) Is there a way to improve the restaurants performance? If so, how? There are several ways to improve the restaurants performance within this saturated market. Firstly, the restaurant must clearly identify who it should cater to and how, this can be upon observations from past and present customers. However, a colorful vibrant sign must be created and implemented in order to be seen by pedestrian and vehicle traffic. In addition, a grand re-opening event should be created in order to re-introduce the café.
Café music, colorful balloons, and free coffee should make for a great day of reintroducing the business to many customers. In addition, a website should be created with a menu that has items and associated prices in order to satisfy the needs of its many working office customers in the area, a group discount rate can also be implemented in order to develop a customer relationship management model. This can be done inexpensively, and can reach many individuals through mail, email, and/or drop offs.
In addition, a strategy that has come back to life has been the couponing industry, which sees large websites such as Groupon, caters to a wide array of businesses in their respective areas. Groupon creates an ad which is delivered to many depending on their neighborhoods and preferences. The deal of the day may contain a sandwich, soup and salad combo with a special introductory price that will appeal to the average person who is healthy conscience. The couponing industry has suddenly reentered the market with a bang due to the boom of social networking.
This will definitely increase potential customers, as many individuals have been increasingly adapting to the social websites, which is a new trend. In order to attract as many people as possible by this form of couponing, there must be a special incentive that would catch their attention, in order to literally bring them into the café, maybe a promotion for a cup of free coffee for a specific day such as Monday. Reentering a current market may be difficult, however, with the right plans, it may be viable.