CONSULTANCY REPORT OF FRANKIE AND BENNY RESTAURANT INDUSTRY.

                                                                             Presented
                                                                                  by         
                                                                          Linus Uche








                                                                           
CONSULTANCY REPORT OF FRANKIE AND BENNY RESTAURANT INDUSTRY.



Executive Summary

The aimed of this consultant report was the critical evaluation of Frankie and Benny Restaurant company based on its strategic organizational culture. Some series of problems which has been affecting their business selling performance were identified, this includes the closing of 33 stores, low quality of products, poor customer service, product high price and poor menu development. In other to resolve this circumstance 3 analytical tools were adopted like; PESTE, SWOT and Porter’s Five Forces. To help the company succeed in the competitive business environment Lewin’s change management model was applied with the support of McKenzie 7s Model.

F & B SWOT analysis was formulated, that helped the author to identified their strengths as having strong brands, located in Cinema environment which generate good clash for the company. Whereas, weaknesses high price of products and rented service, this decrease the satisfaction of customers and there is poor menu display where their popular dishes were removed. In order to find out the root of this problem PESTE analysis was carried out to investigate those external forces that may influence the behaviours of the company and as well five forces to determine its productivity and competitiveness which includes; the power of supply, Bargaining Power of Customers,  new entrants, competitors and threat of substitute. The outcome of this analysis provided the guideline for the area of change and improvement.

Lewin’s change model practical application was implemented with its main 3 steps such like: Unfreeze as the first step to introduce change in F& B where the challenges and impact of Change model was discussed and made known to the organization, change was the implementation stage where the employees undergo some important training to fit in the new culture; Freeze the final step, the part where change has taken place and become part of organizational culture. The McKenzie 7s was introduced in this organization to monitor and perform the right alignment of change in the F & B staffs. Finally, some numbers of recommendation were given to the company, stating what needs to be done to ensure profit stability of this company.    







Contents




































1.1 Introduction

An inconsistency of markets and technological innovation has caused huge challenges to organizational management that question the level of sustainability of their competitive advantage. In order to enhance business performance, productivity, quality of goods and services, the organization has engaged in different strategies to meet up with stated objectives. Business researchers have argued that strategies should be applied in a way to improve the implementation and sustainability of companies performance so as to ensure that organisation gains competitive advantage and effective performance (Belleflamme, P., & Peitz, M. 2015).

 Meanwhile, strategies have been defined as the procedure undertaken now, in the future and structure of how an enterprise is organised to meet long-term plans (Purce, 2014). In support of this idea, Janneke, Whiteman & Rotmans. (2009) strategies explicit how an industry plan to develop within a specific period of time to accomplish its missions in accordance with the clear evaluation of what needs to be done. In the essence of this definition, business managers can only achieve their aims and objectives when proper strategies have been taken in the lines of change management and implemented in the organisation.

Therefore, the purpose of this framework is to carry out a consultant report of Frankie and Benny Restaurant with the analysis of the cultural process and problems that have affected their management performance. Frankie and Benny Restaurant is an Italian/American own company in the UK, founded by Kevin Bacon in 1995, they open their first store in Leicester which was expanded to 200 stores. According to Rebecca. (2016), Frankie and Benny are now controlling up to 500 Restaurants and Pub in the UK casual dining sector which has been a huge challenging to them and the operational performance is running very poor due to maladministration that has resulted to lack of focus on products value, unsuccessful menu development and strategies implementation.

Julia. (2016) also stated that the organisation poor performance was because of its higher prices of products and poor customer service. This issues resulted in the closing of other branches and sack of workers because of insufficient found to render proper service to customers. In the line of this trend, the company selling point had deteriorated since the beginning of 2016 and was 2.7pc which is lower than last year sales point and unlikely to improve at any time (Bury, 2016).

1.2 The chart below illustrates the selling performance of Frankie and Benny from May 2016-2017

 



2. SWOT Analysis of Frankie and Benny Restaurant Group


The fundamental reason for strategies is to help an enterprise to balance within the external environment and to gain positive performance. Frankie and Benny Group can attain this balance by analysing current market strategy and offers with the aim of enhancing company’s outcome (Jeffery, 2010). Perhaps SWOT analysis will be explored to evaluate the company’s strength, weakness, opportunities and threats in order to lay down a strong foundation of the management strategies to be executed. The successfulness of this strategies cannot be obtained without taking into consideration what organisation can offer or not.  

Strength
Robust brands
Leisure park/ cinema location
Good cash flow generation
Weaknesses
The high price of a product
High rented costs
Customer satisfaction
Poor products menu for customers
Opportunities
Transform brands menu
Expand overseas
Decrease product price
Engage in another business
Customer focus
Threats
Competitors
Inability to expand more branch
Minimum wage


2.1. Strengths: Their brands merge together classic American and Italian style with food and drink that often differentiate its brands from other rivals such as: Byron & Nando’s, and as well as generate good income. This has made it, the most popular casual dining brands in the united kingdom, and operate effectively in leisure and retail environment which is a great advantage for the organisation. Despite that, they trade successfully at 6 airports and as well cinema location.

2.2. Weaknesses: Customers are feeling that the company’s service is too expensive in term of the products and rental service price compare to other restaurants. This has led to low customers satisfaction and decline of customers and credibility in the market. Apart from that, the Telegraph Business. (2017) reported that the remover of most popular dishes such as chicken parmigiana, from their menu, cost them £59.1million.

2.3. Opportunities: the transformation of brands menu in order to ensure that all importance dishes are added in accordance with the need of the customer and as well reduce its prices to attract more customers. Establishment of more stores in other countries will be a great change that will raise company performance by engaging in other related business that can draw people attention. The performance will also increase by being more customer focus to understand their needs and taste.

2.3. Threats: As more quality and independent restaurants are establishing across united kingdom rendering similar and better products at cheaper costs, had been the consequence that caused the loss of customers. In spite of this problem, the company lost its markets share that resulted in the closure of other branches and sack of workers due to increase in the UK minimum wage.

3.  Macro Environmental Factors of  United Kingdom: Using PESTE Analysis Model


In order to overcome the negative impact of SWOT analysis, as pointed out by Hill & Brook(1997), “various modification of the analysis is recommended”. And PESTE model has been identified as most active model, because it classifies those external factors influencing an organisational performance into five categories: Political/Legal, Economic, Social, Technology, and Ecological/Environment. The connection between SWOT & PESTE gives in-depth understanding and more accurate of company’s problem ( Srdjevic, Bajcetic, & Srdjevic, 2012). For instance, SWOT indicates the direct and indirect influence of internal and external factors of an organisation but it is imperative to employ PESTE tool for proper analysis of these factors(Sohel, Rahman,& Uddin, 2014).

3.1. Political/ Legal Factors: controlling of any Restaurant group is highly influenced by political intervention of a country, especially in the United Kingdom with a motive of improving the health condition of citizens as well reduce obesity. Frankie and Benny is no exception, For example, Food Standard Agency (2015) stated in food law code of practice, that legal authorities must deal with food safety and food hygiene issues in the constitution of Food Safety and Hygiene laws 2013. This involves organisations who deal with food for sale and supply, Frankie & Benny should put this into serious consideration to ensure that proper assessment is carried out by this authority. This will enable them to focus more on their product to ensure is 100% safe for human consumption. There are other factors like tax laws, employment laws and related business restricted regulations.

 United Kingdom corporate income tax is 20% which is based on the profit companies generate while operating their trading activity yearly (Trading Economics (2017), United Kingdom corporate Tax rate, 2017). Apart from this law, Gov.UK (2016) recently government increase employment minimum wage from £6.70-£7.20. Also, there has been a report carried that, there is a tendency that UK workforce minimum wage will be more than double between 2015-2020 (Employment Case Update (2017).This will have a significant effect, as it will result to the high cost of production and the only way organisation can overcome this cost is to increase the price of products, which will, in turn, affect their selling performance.

3.2. Economic Factors: Restaurant industries operating mainly in the United Kingdom have been affected by the changes in economic policy base on Brexit. Changes included in the following element: changes in the cost of production, changes to staffing and changes in consumer procurement. Calder (2017) reported that the pound has declined below euro for the first time since 2010 and also explicit that HSBC bank has indicated in their forecast that pound will fall to 1.10 against the dollar by the end of 2017. Frankie and Benny have been affected by this recession as most of their products are prepared with the combination of the American and Italian style of food and wine. For instance, the importing of food ingredient from Italy has alone risen to 5-8% in costs since the beginning of 2016, whereas, commodities like coffee etc., are also internationally traded in USA Dollars.

At this situation currency rating is unpredictable, could be high or low, it is suggested Frankie and Benny required to benchmark other styles of food and wine to fuel their performance towards its goals. Because nobody can determine the stand of UK in the continuity of trade with EU countries. Moreover, Travis (2016) documented that, the number of EU workforce in Britain has increased from 224,000 to 2.15 million within 12 months to March 2016, meaning that the Restaurant Group might require to budget for visa and working permits to keep some of their important skills worker if the UK eventually leave EU. Despite the issue of employment and commodity costs, the problem of economic uncertainty can jitter people to stop too much spending and this will affect Restaurant Group.

3.3. Social Factors: Societal factors have been considered as the major factors affecting UK Restaurant Group, as the city comprises of people from a distinct cultural background, such as lifestyle, attitude/belief, family and religion. Restaurant Group dishes developers should be aware of these influence to prepare foods that meet the needs of people. Although the report has shown lack of proper service and manner of approach by company’s staff.

This is the reason behind the reported that the chief-executive Debbie Hewitt admitted that their food is too pricey (Hutchison, 2016). Nowadays, food industry lost its public image as universal become more price and health conscious. In this case, the Restaurant Group need to scrutinise its products in order to work out what their customers paid for and as well improve their products value. In the issue of food being too spicy, it is required to have spicy and un-spicy food or prepare base on customers choice.  

3.4. Technological Factors: New technological innovation have brought tremendous opportunities for some industries in UK. Such as; the use of online shopping, Advertisement, Pay-Roll etc. Another form of machine suitable for service of the restaurant industry is highly needed in Frankie and Benny Group in order to mitigate poor services to customers, which has been the comments of the masses. Use of technologies in restaurant industry improve service delivery and customers satisfaction (Sarah, Lan & Jenkins, 2014). Like other restaurants uses a specialised oven to prepare their pizza fast, McDonald introduces the use of Touch Screen Ordering where their customers can easily make the order and get it in not less than10 minutes immediately.

Frankie and Benny Group can acquire those technologies and as well as introduce Point of Sale Tablets (POS) which will be connected to Kitchen display screen. POS will be handled by customers to make order and payment, whereas the order made by the guest will display on the kitchen display screen for kitchen staffs to get it ready. This will make services very faster rather than customers lining up, to make payment and order. POS will not only make service faster but also use as means of checking the total number of customers per a day, a pay-roll report in order to keep an accurate account of the company’s activities.

3.5. Ecological/Environmental: The imperative of generating an attractive environment has gained the interesting of organisational managers as it is the vital factor for driving and satisfying potential customers in the restaurant industry (Ali and Amin, 2014). UK government is seriously concerned with issues of this factor in other to mitigate the life expectancy of people in her nation. For instance, ecological factor like; Air pollution, Chemical used in industries, industrial emissions, these factors have significant effects on the human health and environment (GOV.UK, 2015). The Restaurant Group needs to be aware of these factors and abide by the rules and regulations, corporate its services to reduce emissions of harmful pollutants and harmful pollutants in the environment.

4. Porter Five Forces


The point of adopting five forces model in this project is to assess Frankie and Benny profitability, attractiveness and understand the causes of competition and profitability. This model creates the opportunity to analyse and identify the potential communications of competitors in the organisation(Fablan, 2014). Economic and technological features of an industry decide the strengths of the five crucial competitive forces such as; threat of new entrants, bargaining of power of buyers, rivalry among the operating industries, threat of close- substitutes commodities and bargaining power of supplies(E. Dobbs, 2014).

 Five Forces Tool outline below will utilize to determines factors that may affect the profitability of the Restaurant Group

4.1. Supply Power: These factors indicate the power of supplies and its influences on products prices, which may directly or indirectly contribute to the organisation's profitability. This stipulates that the lesser the supplier they are, the more effect on products cost. It is imperative for Frankie and Benny to compare their supplier's price of a product with the price of other suppliers of the restaurant industry and also to ascertain the supplier that offers goods that are unique. The outcome of this will determine which supplier to buy goods. Because of the multitude of a supplier of a specific product to increase business profitability (Tavitiyaman, Qu, and Zhang, 2011).

4.2.  Bargaining Power of Customers: This study, those factors of consumers that influence products prices and quality. Nowadays, people required quality product or service with a lower price. Therefore, in order to gain the positive impact of this factor, Frankie and Benny need to ensure that their products are well packaged. Because “ the higher the number of consumers, the bargaining power of consumers reduced” (Eskandari, Miri, Gholami and Nia, 2015). This trend implied that when other customers refuse to buy, somebody else will buy.

4.3. Threat of New Entrants: This force analyses the possibility or difficulty of other industries to emerge into market environment. The easier it is to enter, the higher the risk of industries market share minimise. Difficulty to entry could be a cost of the distribution channel, investment law economic of scale and popularity of brands. This force should put into consideration by Restaurant Group because the threat of entry depends on the level of difficulties and outcome of new entrants.

4.4. Rivalry Among Operating Competitors: This force evaluates the total number of existing competitors and their capacity to influence an industry. The higher the number of competitors offering similar goods and service with little low price, can easily push out a buyer to other competitors (Lee, Kim, and Park, 2012). KFC, McDonald, and Nando’s are well known fast food companies in UK base on the different service they offer to their customers. Frankie and Benny can gain profitability advantage by popularising its brands in newspaper, promotional campaign, differentiation of product by quality and price.

4.5. Threat of Substitutes: This force explicit the extent to which buyers can easily turn from companies product to another brand. This tool will help Frankie and benny to examine how much fast food that operates within their industry. Thereby, comparing their products quality and prices with the competitors. The consequence of this analysis will determine the area that requires changes or improvement (Porter, 1997).

5. Change Management Models : Lewin’s Change Management Model


Having identified factors that may affect Restaurant Group profitability, attractiveness and competitiveness and the nature of the problem that caused the company’s poor business performance in UK. It is required that this organisation needs a total transformation of their organisational culture/system. In order to transform this system, Lewin’s change management model will be adopted, because organisations and their environment have become more comprehensive and ambiguous, as the complexity in organisational change has increased rapidly (Schein, 1996). Underpinning this strategic change, Lewin Kurt 1950 introduced three stages of managing change. That defined organisational change “using the analogy of changing the shape of a block of ice” (Levasseur, 2001).

Practical application of Kurt Levin's Model

5.1. Unfreeze: Organisation needs to create a vision or change strategic that responses to the question, what do we want to become? (Davis, 2004). This is the first stage where Frankie and Benny need to decide what change they want to make. Create awareness regarding the present condition of the company(as indicated in the company’s introduction), discuss the problem with overall staffs by indicating the extent to which this problem has affected their performance. Communicate what needs to improve which includes: focus on products value, menu development, Product low price, selling performance and as well introduce Frankie and Benny online ordering application. By communicating issues that demonstrate between behaviours desired goals by organisation employees and that comportment presently exposed,  workers are motivated to involve in change actions (Cummings and Worley, 2009).

Rather than sacking staff and closing other branches. This will provide a clear understanding of why the company need change and its benefit for both organisation and staff members. At this juncture, the behaviours, ideas, feedback, opinion and suggestion of staffs should be examined and put into consideration to gain the strong support of people. Managers and staffs enhance creativity and innovation once they realise and maintain the organisational missions, goals and culture (Davis, 2004- p15). The manager should constantly communicate the change vision openly to employees and handle it, in align of the desire for change. Reminding staffs of the organisation’s norms and how it should be carried out improve their motivation (Luhman and Cunliffe, 2013)

5.2. Change: This is the transitional and implementation stage where Restaurant Group need to restructure the existing organisational culture in order to fine tune status quo of the industry for enhancement(Cummings et al 2009). At this step, communication is very crucial because of staffs required to be informed on how this change will influence their behaviours. This can be done by describing what is expected from the new culture. In order, to prepare their mindset regarding the coming change(Buchanan and Huczynski, 2004).  Frankie and Benny top management team, need to answer every question from employees openly and honestly, resolve the problem without wasting time and as well communicate the desire for change gears towards operational important.

The staff require to be given opportunity, direction or training to improve their skills in accordance with an organisational requirement such like; providing 2 months training on how to operate new technologies like touchscreen ordering, point of sell tablet (POS), kitchen display screen (KDS) and Payroll. The education of staff will shift the organisational culture to a new level. Frankie and Benny should formulate short-term win by provide an incentive to their employees to reinforce the change. Note that; employees should frequently disclose the reasons for the change and how is it important for the organisation, this is to dispel rumours.

5.3. Refreeze: This is the final stage where change has taken place and become part of organisational culture. Organisational culture enriches the solidity of the social system as it offers an industry the suitable ethics for what workers must do (Robbins and Judge, 2008). The company needs to categorise what supports the change, this requires a critical examination of barriers to withstand the change. Such leadership supported by being committed and interaction with employees at all level in order to support them with necessary amenities, this could be done by following;

Generate a reward system and Create feedback system.

The purpose of these actions is to minimise stress and frustration in the workplace. Commitment and support of a leader improve the possibility of awareness and cognition of worker to lead to a higher method of handling issues, whereas improve the likelihood of innovation (Yoshida et al., 2014). Finally, the company’s should ensure that every employee is informed and supported at all time and do not hesitate to celebrate success. Moreover, the model below is to ensure that the organisational change that has taken place is aligned and to investigate what is required to be straightened to enhance performance.

6. McKenzie 7-S Model

                                                                                           
This model was founded by McKinsey consultants group ( Tom Peters, Robert Waterman and Julien Philips) in the 1980s, the team used 7s that are an interconnected element as indicated on the diagram to form strong strategic planning tools that can improve organisational operation (Jurevicius, 2013). Though it is divided into 2 part as shown in the chat and its practical application in Frankie and Benny industry are below.

6.1. Shared values: At this first stage, the relationship between Frankie and Benny top management and employees is very fundamental, because it will create opportunities for managers to communicate with staff about the restaurant belief and attitude; negotiate and direct the staffs regarding the organisational vision and challenges. The need of this gathering or routine interaction is to form a strong organisational culture that makes stated goals obtainable. Sharing the company’s values in the organisation provides greater understanding and devotion to the company’s missions and method of attaining them (Kaplan, 2005). The success of creativity and innovation hangs in a share goal that are emphasized on the organisation’s expectation (Caniëls and Rietzschel, 2013). 

6.2. Strategy: The achievement of the change “goals” communicated and shared with workers depends on how effectively it is, with other competitors (Cameron and Green, 2015). There should be a strong division of labour within the branches to fasten the customer service. This could be done by providing well trained staff who can access customers online orders, delivery department, enough kitchen staff to respond to orders, quality control department to evaluate dishes before it serves to customers, customer advisor that will be in charge of POS to direct customers who cannot operate it and installs a big menu display screen. An innovative method is a plan that stimulates the enlargement and execution of organisational new service (Frederiksen and Knudsen, 2017).

6.3. Structure: Delegation of different duties is very important, there is a need for Frankie and Benny to provide a strong procedure to elicit the responsibilities of all worker. This action determines the organisation functions that enhance the efficiency and effectiveness of company’s business performance (Jones, 201)


































.




There should be a functional structure of this organisation and each department with a leader who can control, coordinate and influence the behaviour of his/her followers towards the vision of the company. The effectiveness of each department will explicit the method of responsibilities, which perfectly allied aims of organisation (Tolbert and Hall, 2015). Active of this structure will produce the essential impact that can improve Frankie and Benny managers ability to manage human and material resources.




















6.4. Systems: At this stage, the information among the Frankie and Benny industry is very crucial. The company’s sub-system should be sharing daily business activities that took place in the stores according to the structure. This is to manage customers information, experience and products quality. The feedback or report from consumer will give ideas on the area of improvement in order to gain customer satisfaction.

6.5. Skills: Underpinning the effectiveness of change model in this organisation, the company needs to ensure that, required skill labours are recruited. Keys skills worker like; e-marketing staff, and qualify leadership personnel etc, having a professional in each department can improve the performance of low skills staffs. Jones (2012) argued that employees who are working together by low skills can direct one another and positively influence each other behaviours.  

6.6. Staff: With the aims and objectives of this model for the betterment of Frankie and Benny company, it is important to employ the suitable skills labours. This should be done in the area of specialisation as have been identified in the above change model.

6.7. Style: This is the most important part of this strategy, the achievement of the change model implemented in this organisation relies on the kind of leadership style adopted by the organisation. The evidence of this was confirmed by Carter et al.(2012) that, a value of the relationship between managers and staff fosters the motivation of employees. Therefore, Frankie and Benny should apply transformational leadership style for successful implementation of this change management. This is because, it has a direct impact on workers entrepreneurial performance (Moriano et al., 2011).


7. Recommendation


1.    Frankie and Benny should prepare workers handbooks that will be distributed to everyone in the company as a guide that summaries the organisational procedure. This will, in turn, improve and create a positive impact on the change of company’s culture.

2.    There should be a monthly meeting with overall staffs of Frankie and Benny industry, this is to have a mutual conversation with each other, in order to discuss the progress and challenges of the company for improvement.

3.    Top management of Frankie and Benny industry should ensure that the employees are fully captured by the organisational culture by creating an event that takes place in a weekly basis such like; best staff of the week, and staffs training.

4.    Finally, there should be a control department that will be in charge of supervising and helping the staff: reward of staff who perform well in term of selling and customers retention.

8. Conclusion  


A strategy is the greatest degree of a plan to accomplish organisational mission and objectives under the condition of global business uncertainty and can be carried out by a different type of strategic models. These consultant reports are critically identified Frankie and Benny Restaurant problems, using various analytical tools like PESTE, SWOT, and Porter’s Five Force to ascertain the challenges facing the industry and as well implement Kurt Lewis change management model that will enable the organisation to gain competitive advantage. To ensure constant evaluation of this model McKenzie 7s model was also applied. Recommendation for an area of consideration is given to the Restaurant Group as a guide to align the organisational culture towards the specified goals.








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