At first night of the class you have partnered with another student. Please provide your first draft and let them review your paper using the First Draft checklist and review their paper as well. For every two items you find in their paper you will earn 1

Restaurant industry role in American economic is increasing steadily, and intervening everyone’s life. In recent decades American diners’ taste preference, interests in trying new ethnic cuisines are driving into aggressive growth, competition in international restaurants. However, despite of constant growth most restaurants have seen a drop in the certain period of year due to consumers’ demand. The purpose of the project is to address ways to overcome seasonal impact on one of the new business entries in ethnic cuisine, YONA Japanese restaurant. Moreover, through SWOT and IFE/EFE matrix analyses, the paper examined the current situation and its possible resources. Indeed, this project recommended potential solutions and implementations.

Feldman (2015) noted restaurant industry is playing a more significant role in human life since 82% of the US population is living urban area and as people are getting busier, people do not have time to cook at home, more food service companies are growing. In addition, many special occasions like anniversaries, birthdays, and first meetings take place in restaurants, which makes places important as well as their homes. However, 61% of restaurants have been noticed a drop in sales, also faced lack of demand (“How to seasonal”, n.d.). Besides seasonal impact, due to a competitive environment nowadays consumers have more choices and maintaining business’s profitability and maintaining the position of the business is becoming more and more complicated and challenging for every single restaurant pruner. YONA is one of the new entries, where seasonal impact is very considerably happening, into an emerging Japanese food market in the Washington DC metro area. The aim of this project is to determine ways to improve the current situation of YONA restaurant. In spite of good quality food and skilled team YONA restaurant is undergoing some problems that need to be solved to enable the restaurant to perform in the best way possible. The problems are identified, decreased number of customers, inconsistent work environment in terms of employees, high food cost to sales.

YONA is a brand new Japanese noodle bar and small plates restaurant was opened in November 2015, where can accommodate 50 quests at a time. The restaurant runs under a name of celebrity chef, restaurateur Mike Isabella with partnership chef Jonah Kim along other concepts. The restaurant services around 100 people during the weekday and up to 150 during weekend with total of front-of house and back-of-house 30 employees. According to general manager of Mike Isabella C.Caras (personal communication, April 25,2016) the average sale of the restaurant is 130.000$, and serving average 3700 guest per month.

Wrangham emphasized (as cited in Feldman, 2015)“Restaurants are now part of who we are and affect us in every way you can imagine”. Restaurants have been playing in a main role with retail business for city planning by creating vibrant streets, a complex environment for neighborhood. But technology advancement has been bringing great change in last decades for retail business, which is shifting to online. Consequently, the first level of buildings is left for food industry. In addition in 2015 Americans spent more on dining out than groceries (Fox News, 2015).

As Zagat (2015) declared without counting breakfast national average dine-out is 4.5 times a week. The cost of dining-out national average is $39.40 per customer; the most expensive cities are New York City followed by Boston is above average by $8. On the other 38% of consumers are concerned about the economic situation and holding back their spending on leisure things like dining out until the economy improves (NRA, 2015).

Many theories and studies conducted about customer satisfaction in the restaurant industry, they all agreed the most influential factors for customers’ overall experience and post-dining behavioral are food quality, service quality and atmosphere, followed by price, and location (Liu & Jang, as cited in Lim, 2010; Haghighi et al., 2012). Thereby, the survey revealed the results what brings customers’ bad experienced dining, which are poor quality service (26%), noise (24%), price (17%), crowd (13%). In terms of service quality these things annoys diners most: inattentive waiters (24%), slow service (17%), rude staff (10%) (Zagat, 2015). As far as there are proven vital attributers in success of restaurant regardless other externalities it is extremely important to build a very good base with their first customers since it is YONA’s first year of business.

In the second place, chef Mike Isabella commented they are targeting suburb customers who tend not to go out dinner into the city center. In contrast, Toki underground, Sakuramen, Momofuku other big competitors are located in Washington DC, being only leader in the area will definitely benefit the restaurant.

As mentioned above YONA is facing to decreased number of customers. In first week of January, the number of served guest was 1190 whereas; in April 17 to April 23 they served only 588 quests, which is 2 times less (C.Caras, personal communication, April 15, 2016). In YONA average guest spends $35.68 for dinner, $22.82 for lunch, which is little bit lower than nation’s average $39.40. Also she noted that the restaurant is spending 23% of its sales into labor, which is dropping in Bastianich’s 30% limit in labor. Again, most importantly average food cost is over 30% of rule and arising steadily, in January YONA’s food cost was 25.3%, 33.31% of sales in March.

Graphic 0. YONA Customers numbers by a week

As a whole concept, they have lots of advantages, such as a strong skilled team for marketing, PR, ability to shift resources among concepts, professional strong team for both management and executive levels. Indeed, whole concept can maintain its revenue in stable level. One of the concepts is having difficulties; others will replace its space. Therefore, they have huge potential to expand its market share in the area. For instance, in 2017, the big project, 10-concept food emporium is going on to launch in 2017 at Tyson’s Galleria in Fairfax, VA. Industry people, fans of the concepts are seeing it as advanced, another level of food service.

SWOT and IFE/EFE matrix will be conducted in order to figure out YONA restaurant has to take overcome current obstacles and secure the future business success. The reason for using SWOT analysis will gather basic information about business from internal (strength, weakness) and external (opportunities, threats) sides. Whereas IFE/EFE matrix will go a little bit deeper and give quantitative scale regarding these insider and outsider factors how the restaurant is responding based on calculation.

SWOT analysis is an analytical tool used for the identification and categorization of internal and external factors. SWOT analysis can help organizations in their strategic planning process, and in matching their capabilities and resources to the competitive environment in which it carries out its operations (Jim Makos, 2014). SWOT analysis is very effective way to understand the business better, regarding insider, outsider factors. By using SWOT analysis the company is able to take advantages of own strength, develop business goals and strategies for achieving them, diminish weaknesses, will be prepared for threats, and capitalize on opportunities. The first letter of each of these four factors creates the acronym SWOT.

Running the business under the big-name restaurateur facilitates them with an experienced, professional team in all aspects of the business. Being part of famous concepts attracts market easily with a wide range of audience. Chef Jonah Kim is well known in the industry has won lots of competitions and his reputation is rising constantly. YONA’s marketing team works very well with newspapers, TV shows, local websites, and medias. They consistently publish positive presses, food critic reviews. Proximity to other restaurants within the company, other 2 restaurant Pepita Cantina, Kapnos Taverna are located in a same block, where is becoming a new trendy spot for diners in the Ballston area.

High quality ingredients, 50% of their ingredients in their food are authentic, very traditional and imported from origin land Japan. They have high willingness to educate staffs and customers, the management team works really hard to educate employees first, through their employees they intend to inform guest with concise, true information and deliver high quality service. The atmosphere of the restaurant is clean neat, and very modern.

The most harmful weakness is that the population within the closest radius has a lack of education regarding ingredients and quality. Most of the guests are very new to the cuisine, and there is unfamiliarity with Japanese on the menu and cooking methods. The price is 2-3$ higher than other main competitors. The entrance of the restaurant is not in main street, where has minimal foot traffic also consumers, who live in city (Washington DC) assume location is too far, it makes the location undesirable. Difficulty in hiring staff both for back-of-house and front-of-house leads to over-worked staff. There is high cost for imported products due to shipping, processing fee and tax cost is higher than local products.

The YONA has a very promising opportunity for a market expansion along Mike Isabella concepts’ growth. The increased interest in exploring other cultures through food is bringing more new customers to the international cuisine market.

Perceived food suitability for the warm season harming the restaurant’s revenue. The competition in the restaurant industry becoming wilder, every other day new businesses are launching. High cost of goods but low-budget/willingness to spend from consumers as well as high labor due to overtime and percentage of labor cost to low sales.

Table 0.YONA’s SWOT matrix

Internal/External Factor Evaluation (IFE/EFE) matrix is a strategic management tool for auditing or evaluating major strengths and weaknesses in functional areas of a business. IFE/EFE matrix also provides a basis for identifying and evaluating relationships among those areas (Maxi-Pedia, n.d.). By doing IFE/EFE analyses are able give quantitative scale, which is a 1-4 weighted score (1-2.5: in terms of factors, the company is operating no good enough, 2.5-4.0 means the company is operating well enough).

The IFE/EFE matrix can be created using the following five steps (Maxi-Pedia,n.d.):

1. List 10-20 important factors, both for IFE/EFE in terms of strength and weakness

2. Weights: Assign percentage to each factor 0 %(not important) to 100% (extremely important)

3. Rating: Assign a 1 to 4 rating to each factor. major weakness (rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4).

4. Multiply: Multiply each factor's weight its rating. This gives a weighted score for each factor.

5. Sum: Sum up all factors weighted score

According to IFE/EFE matrix the restaurant is operating good with weighted score 2.88 in terms of internal their advantages and resources. However, in terms of external factors, the weighted score is 2.33, which is below the average. Even though there are certain agencies cannot be changed, working towards to external factors is a vital step in order to come up with possible solutions to overcome the undergoing issues for YONA.

The purpose of this part is to suggest ways to solve three major problems. The perception of customers’ summer food is significantly impacting YONA’s number of guests negatively. Meanwhile, front-of-house employees’ income has been declining, which is leading to quitting job and over-worked staffs. Therefore, high food cost is facing to YONA.

By implementing these recommendations: brining more customers, keeping current employees and cutting food cost YONA can make positive changes and maintain its revenue during its off-peak season.

The decline in the number of quest has noticed significantly by almost 60% compared to restaurant’s January report in spite of offices. To overcome this issue they should make value meal for office workers during lunchtime before the happy hour with one entrée, one appetizer. The ramen bowl considered pretty big, however shorten its portion size, adding side dish with correct price will create more guests for lunch.

In addition, lately people are not following the strict 3 meals rule, this factor drives to consumers to snack more, eat during often off-peak hours. Besides this fact NRA (2015) 7 of 10 people are holding back their spending on leisure things like dining out (NRA, 2015). The tight budget drives people to purchase less during mealtime, which makes people hungrier. These changed habits are giving opportunities to increase revenue for restaurateurs. A typical happy hour is between 5 pm to 7 pm usually works as a bridge to the dinner hours. Most people are likely to stay in one place rather than seeking another one. (National, Restaurant Association, 2015).

50% of all beers that the restaurant is offering cost more than 8 $, which is quite expensive compared to the other restaurants, which are in one area. Also consumers’ interest in new cuisine is increased, on the other hand, some of them who are carefully minded seek local and national industry familiar, local items from the menu. Thus, they should few local, inexpensive beers and drinks to the menu and can serve to the happy hour or waiting guests

· Seasonal products refer fresh; grown under natural weather and climate condition without enforcement

· Seasonal products are less expensive; relatively grown locally, without shipping fees and other fees

· Seasonal products are more nutritious; shipping in close destination saves time and helps to vegetables are used in most nutritious stage.

By the way, Hays (2015) commented 59% of people more likely to pick an item if it labeled with seasonal also 49% think that seasonal items are more appetizing moreover, 39% people consider seasonal item as a healthier choice.

· Negotiate with distributers, instead of working with many suppliers, work with less and increase.

· Try an alternative less pricy proteins

· Use constant weights and measures to ensure portion control (Restaurant Business Online, 2009).

The considerable number of customers decrease has been noticed during lunchtime. Now the restaurant is serving average 25 customers for lunch per day and an average guest pays about $20. By implementing suggested implementations; value meals during lunch, happy hour is projected to bring 20-30 guests per day and it will increase sales by $600 per lunch service, as well as there will be an increase for dinner sales. Overall, they can see 25% of additional revenue by making additional $30000 per month. In addition, the improvements will contribute to a popularity of the business; over the time they can create loyal customers and secure the business’s profitability and its future success.

VII. Conclusion

The project identified the YONA restaurant’s current issues; the decreased number of customers, inconsistent work environment, high food cost. Therefore, suggested ways to solve and improve the situation. The first, restaurant industry is so much depend on returning customers and locals. Since it is the first summer of the restaurant there is a huge possibilities to build and introduce themselves in the market a in a way which represents that the restaurant can provide season appropriate meals and can meet the demand of everyone’s interest closely. Second, skilled employees are a key success of the restaurant industry by training them and keeping stable work environment. It will help the restaurant make changes in a smooth and efficient way. Third, having good the number of customers does not solve all problems. They should work on smart cost cutting, and finally they can add more profit. By the end of August, 2016 they will see noticeable improvements. Finally, trying possible positive changes hold YONA in today’s competitive market.

Andaleeb, S.S., & Conway, C. (2006). Customer satisfaction in the restaurant industry: An examination of the transaction-specific model, Journal of Service marketing, 20(1), 3-11

Bastianich, J. (2012). Restaurant man, New York, NY: Penguin Group.

Devra, G., & Demand, M. (n.d.). What is normal for a restaurant's labour cost percentage? Retrieved from http://yourbusiness.azcentral.com/normal-restaurants-labor-cost-percentage-13115.html

Feldman, E. (2015, January 18). Why the restaurant industry is the most important industry in today’s America? Retrieved from https://medium.com/@EliFeldman/why-the-restaurant-industry-is-the-most-important-industry-in-todays-america-6a819f8f0ac9#.grd5z8xh0

Fox News. (2015, April 15). Americans spend more dining out than groceries for first time ever. Retrieved from http://www.foxnews.com/leisure/2015/04/15/americans-spend-more-on-dining-out-than-groceries-for-first-time-ever/

Haghighi, M., Dorosti, A., Rahmana, A., & Hoseinpour, A. (2012). Evaluation of factors affecting customer loyalty in the restaurant industry. African Journal of Business Management, 6(14), 5039-5046.

Han, H., Ryu, K. (2009). The roles of the physical environment, price perception, and customer satisfaction in determining customer loyalty in the restaurant industry. Journal of Hospitality & Tourism, 33(4), 487-510, doi:10.1177/1096348009344212

Hays, H. (2015). Increasing restaurant sales with seasonal menus. Retrieved from https://www.rewardsnetwork.com/blog/increasing-restaurant-sales-with-seasonal-menus/

Hine, S., Thilmany, D., Kendall, P., & Smith, K. (2003). Employees and food safety: Is training important to food service managers? Journal of Extension, 41(1)

How do seasonal changes affect on restaurant sales? (n.d.). Retrieved from http://blueskylocal.com/seasonal-sales-drops.php

Jim, M. (n.d). The SWOT analysis definition your organization needs. Retrieved from http://pestleanalysis.com/swot-analysis-definition/

Kim, J. (2016, April 26). Personal Interview.

Lim, H. (2010, December). Understanding American customer perceptions on Japanese food and services in the U.S. Retrieved from http://digitalscholarship.unlv.edu/cgi/viewcontent.cgi?article=1655&context=thesesdissertations

Maxi-Pedia. (n.d). IFE matrix internal factor evaluation/EFE matrix external factor evaluation. Retrieved from http://www.maxi-pedia.com/ife+efe+matrix+internal+factor+evaluation

Maxi-Pedia. (n.d). EFE matrix external factor evaluation. Retrieved from http://www.maxi-pedia.com/EFE+matrix+external

National Restaurant Association. (n.d.). Increase revenue during off-peak hours, Retrieved from http://www.restaurant.org/Manage-My-Restaurant/Marketing-Sales/Food/Increase-revenue-during-off-peak-hours

National Restaurant Association. (2015, November 13). 7 in 10 consumers still hold back on spending. Retrieved from https://www.restaurant.org/News-Research/News/7-in-10-consumers-still-hold-back-on-spending

National Restaurant Association. (2016). What is hot in 2016 culinary forecast. Retrieved from http://www.restaurant.org/Downloads/PDFs/News-Research/WhatsHot2016

National Restaurant Association. (n.d.). Education role in the restaurant industry. Retrieved from http://www.restaurant.org/Manage-My-Restaurant/Workforce-Management/Training/Educations-role-in-the-restaurant-industry

Nelson, B. (2012). 1501 ways to reward employee. New York, NY: Workman Publishing.

Restaurant Business online (2009, December 11). Cutting food cost not a quality. Retrieved from http://www.restaurantbusinessonline.com/menu/food-trends/cutting-food-costs-not-quality

Scott-Thomas, C. (2011, February 17). Americans’ taste preferences becoming more exotic, says Mintel. Retrieved from http://www.foodnavigator-usa.com/Suppliers2/Americans-taste-preferences-becoming-more-exotic-says-Mintel

Zagat (2015, January 20). The States of American dining in 2015. Retrieved from https://www.zagat.com/b/the-state-of-american-dining-in-201

Number of customers covered Jan 3-Jan 9 Jan 10- Jan 16 Jan 17-Jan 23 Jan 24- Jan 30 Jan 31-Feb 6 Feb 7-Feb 13 Feb 14-Feb 20 Feb 21-Feb 27 Feb 28-Mar 5 Mar 6-Mar 12 Mar 13-Mar 19 Mar 20-Mar 26 Mar 27-Apr 2 Apr 3-Apr 9 Apr 10-Apr 16 Apr 17-Apr 23 1190 992 820 948 996 962 1060 962 884 752 834 776 790 802 608 588

Date by a week

Number of covered guest