ENT Small Business Analysis HW 3

Industry Analysis

Aramark is part of the Food Service Contracting Industry in the US (NAICS code # 722310). Food Service Contracting companies provide food services at institutional, governmental, commercial or industrial locations. Examples of services locations include airports, food courts, college and university cafeterias and recreation and sports venues. The industry analysis that follows will focus on the college and university dining.

In a study conducted and concluded September 2016, the revenue growth rate from 2012-2017 was 2.0% and the projectioned rate for 2017-2022 was 1.8%. Revenues were consistently in the $40 billion range for the last 4 years. The educational segment of the Food Service Contracting Industry is expected to sustain slow grow due to increased enrollment rates and increased cost of attendance. The most recent 2017 statistics on food service

Some current trends existing in the industry are a steady consistent growth rate, as a whole in the maturity phase of its life cycle, high concentration and competitive levels, high turnover, and low profit margin. The industry exists in a highly competitive environment which will only increase in level of competition. The  number of establishments within the industry is expected to increase at a 2.9% average annual rate through 2022. This projected rate of establishment growth is slightly higher than the rate of enterprise growth which indicates existing operators (in our case, Aramark) will add locations at a faster rate than new entrants will join the industry.  Over this same period employment within the industry is projected to grow at an annualized 2.4%.  

SWOT Analysis

After conducting industry research and meeting with Mr. Steve Hoyng, RDM at Aramark, ABNT International Consulting team constructed a SWOT analysis to analyze the strengths, weaknesses, opportunities, and threats for WKU Dining’s Passport Bistro location.

· Strengths

· Quality of Ingredients -- Passport Bistros’ food options consist of higher quality of ingredients compared to that of other restaurants’ on campus due to the lack of fried food and oil based cooking.

· Nutritional Value -- Due to Passport Bistro using higher quality ingredients as well as healthier cooking options, Passport Bistros’ food tends to hold more nutritional value than other campus dining options such as Popeyes, Steak n’ Shake, or Papa Johns.

· Coffee Stand -- Passport Bistro is one of  three of restaurants on campus to offer specialty coffees in addition to regular coffee as well as providing food options to the consumer.

· Quick Service/Short Lines -- Passport Bistro offers quick service time as well as no more than 5-7 people in line, compared to the sometimes 100+ at other locations on campus

· Atmosphere -- Passport Bistro offers one of the best atmospheres on the entire campus. A consumer can sit down and eat or drink coffee while they do work or just simply enjoy their meal in an environment which feels almost private.

· Weaknesses

· Structural Limitations-- Due to the location of Passport Bistro, they are restricted in a few ways. The first being due to the space where the restaurant is located. They are unable to install a large scale ventilation system, which would be used to remove any smoke/odor/steam from cooking. This stops Passport Bistro from adding any new food items into their menu that would require extensive preparation. Not having this type of ventilation system also means that any pungent or especially fragrant foods permeate the rest of the building, which contains many offices.Along with this, expansion of the dining area for Passport Bistro is not a viable option, and the current seating which can only hold around 20-25 students would not be enough to accommodate even a quarter target goal of 325 customers per day.

· Lack of Foot Traffic -- Most of the locations of the dining services are based around “central hubs” on campus such as the libraries, major dormitories, or campus operations buildings. Passport Bistro is located in the Honors College and International Center, which originally was planned to be much larger and have many more classrooms and offices than it has. This leads to very few students, faculty, or staff walking through the building compared to other dining options.

· Lack of Diversity in Food Options -- The food offered by Passport Bistro centers on gyro style foods, so if a consumer does not like this style there is nothing Passport Bistro offers to entice them into visiting the establishment.

· Opportunities

· Co-Branding -- Passport Bistro could attempt to merge brands with a more established name in campus dining such as Da Vinci’s or Einstein Bros. in order to try and attract a larger customer base

· Product Differentiation -- Passport Bistro currently only sells food products, they could try and expand their market by introducing items such as WKU apparel and Merchandise to set themselves apart from the competition.

· Raise Consumer Awareness -- Passport Bistro needs to to find a way to make the more consumers aware of the restaurant itself so they can increase their sales to a profitable level.

· Threats

· High Degree of Competition -- Being one of many restaurants on campus, the market is highly competitive in terms of consumers. There are a finite number of consumers deciding where to eat.

· External Competition -- Along with the restaurants on campus Passport Bistro also competes in some degree with restaurants the consumer may choose to attend outside of campus dining which would in turn cause them a loss of customers.

Owner Objectives

Currently, Passport Bistro’s daily sales levels are substantially below expectations. In the Fall semester this location averaged 175 customer sales and in the Spring about 100 per day. The number of sales required to break even would be approximately 300 per day, but the goal would be 400 per day. These goals are based on the performance of Da Vinci’s restaurant, which is approximately the same size and has the same kitchen equipment but manages to attract a much larger number of consumers through the use of branding and food differentiation. Management of Passport Bistro would like to at the very least break even.

Problems/Concerns

Passport Bistro management has requested strategic recommendations to assist in increasing current sales. In addition to increasing sales, they have requested any other recommendations that would increase awareness of Passport Bistro that would lead to continued growth. The consulting group has concluded that there is also a problem with the way that Passport Bistro is marketed and will be addressing that as well. The overarching problem is the lack of customers per a day needed to break-even on the business much less make a profit.

Strategic Business Recommendations

The ABNT intends to help increase the number of sales through use of a customer survey and develop a marketing plan aimed at increasing foot traffic in the Honors College and International Center. We also intend to conduct a feasibility study to determine the costs and benefits of the continued operations with our recommendations in mind. Based on the survey results we will build our recommendations. These could be some of our recommendations to Passport Bistro:

· Since ESLI moved to the International Building, their classes start at 8:00 am but since Passport Bistro opens at 10:00 am they are losing out on potential customers. Opening earlies would be a chance to make more sales.

· Comparing to other restaurants on campus, very few people recognize the restaurant because Passport Bistro has weak social media advertising which most other restaurants do not need because they have existing brand loyalty.

· Because Passport Bistro is not a recognizable brand they could change it to one of the recognizable brands and along with that, Passport Bistro should change their menu.

· We intend to find out if having a bus stop right outside the HCIC would be warranted, to increase pedestrian traffic near the restaurant.