Levendary Cafe Assignment Recommendations and Advice Memo

0 Comment

6. The cost to the company is the main problem because the occupancy, labor, food, supply, and marketing cost altogether incur a heavy cost for the restaurant. The occupancy cost includes maintenance of common area, real estate charge, as well as waste disposal cost. Altogether they comprise 10% of returns. Labor cost signifies 25% to 30% of revenues. Food costs represent around 32% of revenues. Supply cost signifies around 4% of total returns. Marketing fee accounts for 2% – 10% of revenue and overhead represents 5% – 15% 0f revenue. So, altogether the restaurant has to incur heavy costs on all these elements. Therefore, the gross profit of the restaurant is less (Barlett and Han 2).2. Restaurant design: The design of the restaurant should be reliable with the designs of the US restaurants. It doesn’t matter whether the restaurants are big or small, but it should go well with the location.4. Positioning: The present layout of the restaurant should be renovated. Better quality of food should be offered and the service should be fast so that the customer should not have to wait for their order. An excellent positioning changes the attitude of customers towards the product (Viardot 149. Hooley, Piercy and Nicoulaud 205).5. Competition: It determines the suitability of a company’s activities which can add to its presentation (Porter). As the competition is high, so, the company should keep its margin low in order to attract more customer and they should create high awareness about their brand i.e. food quality in order to perform better from their competitors.The decisions which are needed to be taken for the better future of Levendary Café are: Mia Foster can make Chen understand that what are the core values of the restaurant and also should build a panel for Louis Chen. She could also follow the approach of KFC or McDonald or other restaurants.