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Strategic Analytical Review of the Catering
Sector
James Guild
Oliver Benbow
Gareth Williams
Claire Ryder
Lisa Westwood
Bournemouth UniversityBournemouth UniversityBAIHMBAIHM
Business StrategyBusiness Strategy
Introduction
Catering sector consists of:- Restaurants- Takeaways/Café’s- Pubs/Bars- Hotels
Each sub-sector caters for a similar segment of the entire marketInvesting in the sector?
Introduction - statistics
Restaurants take up 68% of the eating out market
Market value reached an estimated 21.8 billion pounds in 2000
This indicates a market growth of 6% between 1995 and 2000
2 in 10 adults are choosing to eat out more often (leisure intelligence, 2001)
Restaurants- Fine Dining
- Independent /Privately owned
- Brassiere
- Ethnic
- A la Carte
- Table d’hote
- Themed/Branded Restaurants
Analysed Sector - Restaurants
Reason for analysing Restaurants:Market Share
Restaurants Pubs/Bars
HotelsConvenience
foods
Roadside Catering
High Low
Low
Growth
Boston Consultancy Group Model
Trends In The Catering Sector
People want value for money
More leisure time
Social trends towards a healthier lifestyle
Increase in PDI and consumer expenditure
Increase PDI and Consumer Expenditure Trends 1994-1999
0
100
200
300
400
500
600
700
1994 1995 1996 1997 1998 1999
Year
£B
n
Consumer Expenditure
PDI
Increase in eating out
Trends In The Catering Industry
Inbound tourism
0
5000
10000
15000
20000
25000
30000
Spending(£000) 11763 12290 12244 12671 12498 12780 10500
Visits(000) 23537 25163 25515 25747 25934 25192 20250
1995 1996 1997 1998 1999 2000 2001
Direct- Takeaways/Café’s
- Supermarket/Convenience Food
- Pubs
- Hotels
- Contract Catering i.e. in store
Competitors
Competitors
Indirect- Theme parks
- Leisure centres
- Shopping centres
- Cinemas
- Hobbies
(DEEPLIST) Factors Influencing The Catering Sector
Demographic- American demography of “large portions”- Woman from a large % of customers to
restaurants in the daytime, however equal split during the evening
- Consumers continue to seek value for money, with an AVG spend per capita of £389
- The UK public with the help of technology are more knowledgeable regarding foreign/ branded food
(DEEPLIST) Factors Influencing The Catering Sector
Economic- Possible predicted “recession”- Current base rate lowest ever for decades- Food prices remain constant in the industry,
following BSC and foot and mouth- Economic cycles
(DEEPLIST) Factors Influencing The Catering Sector
Ecological- Consideration towards the use of recyclable
goods- Possibility of extra operating expenses due
to environmental friendliness- Foot and mouth
(DEEPLIST) Factors Influencing The Catering Sector
Political- Impact of current worldwide political unrest- Implications of the Euro on the future
economic position within the UK- Policies on subsidisation
(DEEPLIST) Factors Influencing The Catering Sector
Legal- Legislation regarding increased minimum
wage- European Union working time directive, 48
hour working week- Food and Safety Act 1995 - Disability Discrimination Act (Updated)
(DEEPLIST) Factors Influencing The Catering Sector
Informational- Increased access to multimedia systems- Virtual tours- Consumers choice to access and
research specified eating requirements
Social
- Competition for leisure time
- More women are working
- Family orientation values (cocooning)
- Large target market
- Consumers are comfortable with established high street branded restaurants
(DEEPLIST) Factors Influencing The Catering Sector
(DEEPLIST) Factors Influencing The Catering Sector
Technological
- Cook-chill methods are on the increase allowing for a less skilled workforce to be employed
- Growing use of internet
- More consumer awareness via media publications
Risk Factors For Market Entry
Saturated market
Predicted recession
High start up costs
Increased home leisure activities
Strict legislative factors
Ego of founder
Uncertainty of foreign expenditure
1998 TOURIST EXPENDITURE IN THE UK
OTHER57%
HOLLAND3%
AUSTRALIA3%
USA20% GERMANY
7%
FRANCE6%
ITALY4%
Future Trends In The Catering Industry
Systematically increasing Disposable income
Indirect competitors expected to gain in popularity in the next 4 years (i.e.theme parks)
Social trends towards a healthier lifestyle
Main target market (55+) is growing in age and numbers
Main Market Audience
Recommendations
Branding/theme of product
- possible franchise affiliation
Strive to offer value for money
Reserve of adequate capital
Use celebrity image to produce image of quality
Develop effective marketing strategies
- target correct and emerging markets
Demographic location/infrastructure
Know your legislation
Effective and efficient use of resources
Recommendations
Conclusion
The next 5 yrs will see an uncertain economicclimate, worldwide. However current trendsindicate a growth in eating establishments,particularly branded outlets. People willcontinue to eat out,as it is now a characteristicof the population!