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The technologies used for transportation network and effective supply chain management in the food and beverage industry are strengthening the competitive scenario. In keeping pace with the changing environment, the food and beverage companies are also improvising their management procedure to achieve the competitive advantage. Besides surpassing the strategies of the competitors, it is a process of knowing the needs and requirements of the customers. Mialon et al. (2016) pointed out that the access to goods and services is inviting the competition in the market. Apart from such availability of the goods and services, it is seen that the barriers to the international and interregional trades have also diminished. Therefore, the customers can acquire the best products or services as per their expectations. On the other hand, the value chain depicts the accumulation of the product or service value is influencing competition among the companies.
The study is based on such hospitality management of Quay Restaurant, which has captured the leading position in the food and beverage industry. The restaurant is one of the most preferable dining restaurants in the world. The discussion of this study will be presenting the value chain analysis of Quay Restaurant. The competitive nature of the Sydney Food and Beverage Companies will also be analysed accordingly.
Quay is signified as the most awarded dining restaurant in Sydney. The major aim of the company is to provide the impressive dining experience to the visitors. The diversity of the Australian ingredients is recognised through the tasty food served in this restaurant. The proper hospitality management by the professional and knowledgeable staffs is much commendable (Quay.com.au 2016). It is noted that the associates at Quay are much focused on providing the effective experience of harbour setting of the modern Australian cuisine. The eye-soothing view of the Opera House from the restaurant location is offering the impressive ambience to the visitors during the dining time. In addition to this, the customers are introduced with the innovative dishes during the special festivals like Christmas, Easter, and so on. The study will be discussing the value chain process of this restaurant in order to achieve the competitive advantage.
According to Cannon et al. (2014), the survival and growth of a company in a particular industry depend on two major criteria. The first one is establishing supply chain management and other one is surviving the competition. On the other hand, it can be inferred that the competitive advantage and supply chain management process is completely proportional to each other. Similarly, the food and beverage industry is also focusing on these two criteria in order to survive in this huge competitive business market. The overall competitive advantage of a firm is much depended on the exceptional values derived from the products and the services that are supposed to be offered to the customers. Food and Beverage companies are concentrating on two possible forms, such as the differentiation advantage and low-cost advantage (Kimes & Beard, 2013). It is noted that when the customers are able to observe the superiority of the product or services, they become willing to pay the premium price for it. Another aspect is the low-cost advantage, which signifies the total cost undercut of the company for the customers. The comparison between two pricing strategies set by the respective competitors is also serving as the key to achieve competitive advantage.
VRIO Framework: The VRIO framework is suggesting the resource allocation process of the firm. In order to achieve the competitive advantage, the company requires allocating the existing resources in a structured way. The first requirement is value-based service or products, which indicates the offers that the customers receive from the company. The food and beverage companies need to pay attention towards the proper supply chain management in order to achieve the competitive advantage (Chang & Hou, 2015). It is noted that the supply chain management includes the product or service differentiations, which may attract the customers in a significant way. The differentiation advantage is generally observed when the customers perceive that the services or the goods are quite unique to the other companies.
Rare: A food and beverage company can attract more customers towards the high quality food or the hospitality services. However, it is noted that during the implementation of the differentiating offerings, there is the possibility of the exploitation of the advantages in two different ways (Wang et al. 2013). The first way is to increase the price until it improvises the current market share. Another way is to structure the price below the “full premium” level for establishing the new market share. On the contrary, the low-cost advantage is enabling the two major functionalities of the business. The first functionality is to maintain the lower prices of the offered products and services. Another one is to match the price in order to increase the profitability. Apart from these two perspectives, it has been seen that several companies are not able to achieve the competitive advantage. In this case, the companies are “stuck-in-the-middle” due to the failure of maintaining the differentiation advantage and low-cost differentiation (Brandenburg et al. 2014).
Costly to imitate: If the product and services are higher in quality, it becomes much preferable to the customers (Magnini & Kim, 2016). Some of the attributes are needed to be included while ensuring the differentiation advantage. These are as follows:
Concentrating on such features, it can be inferred that the cost effective strategies are quite difficult to imitate for the other competitors. The ambience settings and the cost of the location are quite cost effective for the company, but it gathers the crowd in a commendable manner.
Captured-Value Analysis: While implementing the strategic plans, it is required to measure the captured value. It is necessary to understand the benefits that the company has been receiving by adding several unique values to the products and services. Some of the dishes are much popular. It has been seen that some of the least popular items also have the low profit margin, which is not so much beneficial for the company (Verghese et al. 2015). However, sometimes, it has been seen that these dishes are not so much profitable for the restaurant business.
It is notified that the food and beverage company is considered as the Australia’s largest manufacturing sector. It is identified that the food and grocery sector comprised around almost 46% of the total retail market in the year of 2004-2005. The consumers’ expenditures on food products reached to almost $92 billion. Hence, it can be inferred that the competitive scenario in Sydney’s food and beverage sectors is quite visible. The major food and beverage category in Sydney is associated with the production of meat, dairy, seafood, grains, and beverages including wine (Cushen et al. 2012). The food and beverage industry has been supplying a diversified range of food products to every distribution channels, such as food service, food ingredients, and retail. The maintenance of the flexibility within the industry has been matching with the proper supply chain management process. It is to be indicated that the food and beverage sector is considered as the major industry for facilitating the growth in the Australian economy. Moreover, the contribution of such industry in the financial and employment structure is also much commendable. The players in this industry are diverse in nature (Garcia Martinez et al. 2014). They have been producing the consumer goods with a large volume.
The food and beverage industry in Sydney is highly dynamic and it is driven by the diversified needs of the consumers. The essence of cultural diversity and ethnicity is reflected through the available food ranges. It is noted that many of the food products are influenced by the Asian, European, and Eastern flavours (Linassi, Alberton & Marinho, 2016). Apart from the food quality, the restaurants in Sydney have been providing the comfortable and effective ambience to the visitors. For example, Quay has been offering the diverse range of food and impressive ambience, which are much attractive to the consumers who would like to spend their dining time. The eye-soothing view of Opera House is visible from the restaurant. In fact, it is noted that the Australian food industry has established the remarkable reputation of supplying natural and clean products with low percentage of chemicals. The restaurants maintain the safety standards for ensuring the proper supply chain management. Due to the climatic differences, the diverse range of the products is also available in Sydney.
In recognising the information over the past few decades, it has been noticed that the Australia has been considering as the culinary destination par excellence. The tourists or the customers can enjoy the harbour-side dining facilities in the restaurants in Australia. The effective surrounding and the quality foods are the major attractions for the domestic and international customers. For example, Quay, situated between Sydney Harbour Bridge and Sydney Opera House, has been offering the quality foods for dining along with the attractive ambience. It is noted that the place has become the pilgrimage for the fine dining. This restaurant has established the strengthened position among the top 50 restaurants in world. Quay can be considered as the Restaurant of Choice for an opulent dinner or lunch. The sparkling harbour view is the major attraction for the customers.
In considering the upmarket restaurants and bars, it has been seen that Sydney is surrounded with several attractive fine dining places. Cyren Bar Grill Seafood is a harbour side restaurant with attractive ambience and surroundings. It is the most convenient location for a relaxing meal and drinks. Apart from this, the comfortable and attractive location-based view available from Quay is also much appreciable for the customers. This unique feature is differentiating the values of the company to participate in the competitive scenario.
According to Makadok & Ross (2013), menu engineering specifies the study of maximising profitability and popularity of the food items in the food and beverage industry. The menu engineering is not a random concept; rather very essential for the decision-making process. The menu engineering process usually maximises the profits by including a sequential process. The process can be structured by considering few steps, which are mentioned further:
“Costing the menu”: According to Marchi, Maria & Micelli (2013), “costing” a menu is considered as the process of calculating the cost of each ingredient that is necessary to prepare the menu. This initial step is the most integral part of structuring the menu engineering process. This particular step cannot be skipped, as this process is completely depends on the profitability. In Quay, one major responsible person is appointed to cost the menu. The person is knowledgeable about the cost of each ingredient. It takes much time, but cannot be ignored anyway. Depending on such costs, the company derives the idea of the profitable amount.
"Categorising the Menu”: The further step in menu engineering considers the division of the menu into different categories and sections. The category of an item is the broadest level and it includes the Entrees, Appetizers, Drinks, and Desserts (Bigliardi & Galati, 2013). There is the keen requirement of maintaining transparency between the items associated with the category. In the further division, it is seen that the categories are classified into sections. For example, the entrees can be of different sections like seafood entrees, meat entrees, and vegetarian entrees. The sequential process of dividing into categories and sections is essential for preparing the proper layout of the menu (Stadtler, 2015).
“Designing the Menu”: The next process is designing, which involves the specific highlights the items that will be offered to the customers. It is even necessary to organise the items in a significant way. The proper way of such highlights can grab the attention of maximum customers (Patiar, 2016). While listing the food items in a specified section, it is required to pay attention towards the proper arrangements of the layout. The list should consist of maximum seven items. When the list grows longer, the information may be overloaded. In such times, it is found that the customers place the order for the similar items. It is easier to navigate the search by preparing the shorter list (Ho, Yang & Hung, 2015). In fact, it will lead to the higher profit margins. While structuring such list, it is necessary to place the items in a sequential way.
“Testing the Menu”: The final step considers the new design to test the menu. It is necessary to identify whether the layout is impressive enough to attract the customers. The larger restaurant chains usually use such techniques by adding the cross section position for the food items.
Menu engineering is considered as the concept of food cost percentage, which is commonly used for controlling the effective costs. It is required to offer the menu in different styles. If the menu looks attractive and tastes good, the customers even can pay premium amount for this. Therefore, the restaurant can structure the pricing strategy for the foods. On the other hand, the mismanagement procedure of such process can lead towards the business failures. The scanning paths are needed to be selected properly. Usually, the customers notice the upper-right hand corner at the first place. Therefore, it is required to put the profitable items on that position. Some of the visual cues are needed to be added. For example, some specific items will be highlighted by adding photographs or using special fonts. The evocative texts are needed to be used while describing the items that will be offered. Restaurants are usually using the mouth-watering description of the food items in order to grab the attention of the customers. The description of these steps is necessarily needed to be implemented while structuring the menu. The process is termed as “menu engineering”, which is helpful for grabbing the attention of the customers. Moreover, it will be helpful enough in maximising the profit margin of the restaurant.
The study is analysing the competitive advantage and the value chain analysis of the food and beverage industry in Australia. The study has been indicating the case scenario of Quay, which is one of the largest restaurant chains in Australia. The competitive scenario has become much prominent in this current world. The food and beverage company is Australia signifies one of the major sources for growing economy. On the other hand, adding the unique feature while offering the high quality food and effective ambience. The sequential steps associated with the menu engineering process are needed to be followed in order to maximise the profit margins.
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