Marketing SWOT analysis of Eataly NYC Flatiron, expanding from New York to Malaysia

This article provides a SWOT analysis of Eataly NYC Flatiron, a restaurant chain expanding from New York to Malaysia. It discusses the strengths, weaknesses, opportunities, and threats of the organization in the Malaysian market.

Running Head: INTRODUCTION TO MARKETING
Introduction to marketing
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Author’s Note

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Table of Contents
1. Introduction..................................................................................................................................3
1.1 Strengths.................................................................................................................................3
1.1.1 Excellent review ratings for specific factors...................................................................3
1.1.2 Rapid Growth..................................................................................................................3
1.1.3 Good Financial Strength..................................................................................................4
1.1.4 Trade Policies in Malaysia..............................................................................................4
1.2 Weaknesses............................................................................................................................5
1.2.1 The questions over the food safety..................................................................................5
1.2.2 Dependence on the market of USA.................................................................................5
1.2.3 Ambiguity over market approach....................................................................................6
1.2.4 Market competition is high in Malaysia..........................................................................6
1.3 Opportunities..........................................................................................................................6
1.3.1 Opening new outlets in different elements life Malaysia by setting up franchise open in
direct company owned outlets..................................................................................................6
1.3.2 Entrepreneurship opportunities.......................................................................................7
1.3.3 Differentiation of customers............................................................................................7
1.3.4 Strong Capital Backup.....................................................................................................7
1.4 Threats....................................................................................................................................7
1.4.1 High presence of active market competitors...................................................................7

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1.4.2 High logistics and supply chain management cost..........................................................8
1.4.3 Previous food safety issues..............................................................................................8
1.4.4 Small population of American cuisine lovers busy with big brands...............................9
Reference List................................................................................................................................10

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Marketing SWOT analysis of Eataly NYC Flatiron, expanding from New York to Malaysia
1. Introduction
Eataly NYC Flatiron is a growing organization in the food and beverage sector. The main
categories of food include slick grill house items, a diverse catering of wine. The wood fired
steaks are the specialty of this restaurant. The market segment of the restaurant in New York
comprise of the people who love grilled food. However, in the city, the target market of the
restaurant group is limited to the upscale professional people belonging to the upper middle
class. Customers other than this class include people from the affluent sub-urban parts.
1.1 Strengths
1.1.1 Excellent review ratings for specific factors
In spite of being only a start up restaurant, the Eataly NYC Flatiron has won high acclaim
in the customer review section of their official web portal. Many of the regular visitors of the
restaurant groups have stated that they find the taste of the steaks at this restaurant unique and
authentic. The restaurant has been mentioned with approximately 4.5 starts out of 5 star rating in
terms of food quality, service quality and customer friendliness by most of the food travelogues
and food magazines of the New York City as well as other parts of America as well (Chin et al.
2016).
1.1.2 Rapid Growth
In 2010, the Eataly NYC Flatiron only had a base in New York City with 3 restaurant
outlets. However, the number of outlets of the restaurant chain has quadrupled in New York. As
an outcome, Chuah et al. (2016), the restaurant has recorded for growth in annual revenue as

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well as growth in earnings every year. Even after the allegation of lack of variety in food in the
year 2015, the restaurant group was able to gain reputation owing to their food safety and
protection standards. They have received A++ grade quality from the Food and Standards
Authority of New York. After the year 2016, the restaurant group came up with the wood burned
grill items and owing to that, their revenue growth further increased. The rate of growth was 10%
in the year 2017 and 7% in the year 2018 (Latiff et al. 2016).
1.1.3 Good Financial Strength
The balance sheet record of Eataly NYC Flatiron is excellent with almost no debts and
thorough cash flows. In the year 2016, the cash as well as investments of the organization had
been over $25 million. As an outcome, they would be able to conduct business under the
dynamic business atmosphere of Malaysia for at least 1 year without having to pay back
anything to the creditors. After the decision to enter the Asian market, the Board of Directors has
announced that they are going to approve another $50 million worth of share repurchases.
Taking advantage of the low price, the organization has decided to buy back stocks (Kaur and
Singh 2017).
1.1.4 Trade Policies in Malaysia
The Malaysian government has allowed for 100% equity holdings in their project
markets. Again, they are also allowing 100% direct foreign direct investment in the customer
service sector. Hence, there is no feasible chance of the business not spreading in Malaysia. The
company tax rate of the organization is also very lucrative. The same tax rate of 29% is
applicable to both internal as well as external companies. As an outcome, it is expected that the
organization will also receive the tax incentives for customer service projects (setting up

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restaurants under FDI) under the Malaysian Promotion of the Investments Act 1987 as well as
the Income Tax Act 1967 (Omar, Ab Karim and Omar 2015). There are incentives for innovative
technology industry and that is why the restaurant with the innovative set up of wood charcoal
grill is expected to get this tax benefits.
1.2 Weaknesses
1.2.1 The questions over the food safety
The food safety had never been the concern with Eataly NYC Flatiron, before 2015.
However, by the end of 2016, there has been depreciation of the brand volume after some people
fell ill because of the disease break out in the local region. It was anticipated that the company
had been making hyper-annotated claims to their standards of food safety, a food quality. Hence,
after the quality of the food came in to question once, many of the customers began to flee to the
rival brands. As an outcome, Thoo et al. (2018), states that the company had to undertake
investment for conducting an internal survey to seek where they are lacking. After that they had
to invest over a media program in order to address the media that their operations are free of any
contamination. They had to open new communication channels by setting contractual interviews
with media channels.
1.2.2 Dependence on the market of USA
Approximately 99% of the outlets of this organization are based in USA. It is true that the spread
of market for this restaurant chain have been prolific over the years in USA. However the
restaurant is largely dependent on the discretionary spending of the customers and that is why the
spending and earning restaurant are sensitive to changes in the Macro Economic conditions. As
an outcome, it can be argued that economy of USA has begun to slow down and because of

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which the customer spending have become highly segregated (Chahal and Kamil 2018). The
customers want to derive some value against their purchases weather in form of economic return
or quantifiable return.
1.2.3 Ambiguity over market approach
However, the product differentiation is the outcome of the high customer demand analysis. This
is why whether the restaurant should continue targeting the traditional burger and customers or
they should look out for a different traditional base of customers who wants to explore inter
Continental food.
1.2.4 Market competition is high in Malaysia
However, in terms of establishing the target market in Malaysia, high competition in the fast
food sector where popular Indian, Belgian and other cuisines are dominating. Nevertheless,
marketing expertise has to be employed at a high level in comparison to other brands. This is the
only key to gaining access to new target markets where fresh foreign brands are introduced
almost every year thereby increasing the market competition.
1.3 Opportunities
1.3.1 Opening new outlets in different elements life Malaysia by setting up franchise open
in direct company owned outlets
The traditional American target market is becoming widely concentrated on that is why gaining
new customers every year is becoming difficult. On the contrary, because of price sensitivity, the
organization is experiencing subtle loss of new as well as existing customers every year. This is

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why even if all the profit margin is expanding; the proportionate rate of growth every year is
gradually diminishing or fluctuating (Moorthy et al. 2017).
1.3.2 Entrepreneurship opportunities
Again, entrepreneurship in the food business is a major prospect for business drivers in Malaysia.
However, this is in turn heating the organization to find a scope for establishing alternative
market in countries like Malaysia. In Malaysia, there are various small entrepreneurs who are
attempting to establish their business in the local target market. This can be utilized to set a
franchise based business in Malaysia.
1.3.3 Differentiation of customers
Malaysia is a strong tourist destination, which is why along with the locals, there is large
number of the intercontinental customers also, and who will be enticed to see USA based brands
in Malaysia. Again, if the band is a able to occupy market fame among the foreign tourists, then
it will be automatically recounted among the locals as an exquisite centre for American food.
1.3.4 Strong Capital Backup
Strong residual capital and absence of any pending payments of the restaurant will allow them to
easily enter into franchise business (Hamid et al. 2018). The experience of the local
entrepreneurs will help them to easily identify the target customer basis and franchise based
business in the FMCG industry helps the brands who are unaware of the local market to
developed product differentiation, based on the local taste, preferences and demand.
1.4 Threats
1.4.1 High presence of active market competitors

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The major threats that the restaurant chain will be experience are the active presence of several
other international as well as local brands. This implies a serious threat of declination of market
share. Hence it is arguable that setting up outlets in the most prominent location and targeting the
most essential target customer bases will easily help the organization to claim dominance over
the other international brands who are attempting to establish their business locally.
1.4.2 High logistics and supply chain management cost
The transportation network in companies like Malaysia is very interested because of which
logistics as well as real estate setup can incur high cost. This can be instrumental in decreasing
the profit margin of the organization.
1.4.3 Previous food safety issues
Other threats in Malaysia include the additional issues regarding food safety. As evident in the
other parts of analytical report, the organization had to put in much effort to regain the
acceptability of the customers and convince him that the food borne illness were not necessarily
caused by the packaged food of their restaurant chain (Ahmad, Ghazali and Othman 2015).
Additionally, it can be argued that now since the organization is pushing beyond the industrial
standards to improve their status of food safety, the same have to be initiated in the new market
also.
However, cases of contamination of food from restaurants chains and fast food chains are
common in Malaysia. Nevertheless, the organisation has to set up scientific food storage houses
and use safe raw materials from secured suppliers. However, in the new business market, it is
impossible for the new entrant to understand who the best market suppliers are. Hence, this is a
threat for the business Organization.

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1.4.4 Small population of American cuisine lovers busy with big brands
The strong market competition is another big threat in the course of establishing their market in
Malaysia. The first casual, quick industry of service dining attracts competition in context to
price, service, convenience as well as quality. However, another basic factor that it needs
consideration here is that American cuisine is popular among a small section of people in south
East Asia (Ismail and Shokor 2016).
There are some significant Global restaurant brands operating in Malaysia for a much
longer period compared to this restaurant chain. Most of them have established their target
market and physical market presence in Malaysia. In fact some of the menu items in maximum
brands a diet friendly, containing low carbohydrates as well as emphasize in lower costs. Search
strategies are mostly maintained by popular global brands like Taco Bell, Yum brands, Panera
Bread as well as McDonald’s.

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Reference List
Abdul Latiff, Z.A.B., Rezai, G., Mohamed, Z. and Amizi Ayob, M., 2016. Food labels’ impact
assessment on consumer purchasing behavior in Malaysia. Journal of food products marketing,
22(2), pp.137-146.
Ahmad, F., Ghazali, H. and Othman, M., 2015. Important Factors of Casual Dining Restaurants
in Klang Valley, Malaysia: The Roles of Demographic Characteristics. Advanced Science
Letters, 21(6), pp.2123-2126.
Ceicdata.com. (2019). Malaysia | Number of Hotels | Economic Indicators. Retrieved from
https://www.ceicdata.com/en/malaysia/number-of-hotels-and-hotel-rooms/number-of-hotels
Chahal, D.K. and Kamil, N.M., 2018. THE DETERMINANTS OF CUSTOMER
SATISFACTION AND BEHAVIORAL INTENTION AMONG RESTAURANTS IN KLANG
VALLEY AREA OF MALAYSIA: A CONCEPTUAL STUDY. e-Bangi, 14(2).
Chin, T.C., Adibah, A.B., Hariz, Z.D. and Azizah, M.S., 2016. Detection of mislabelled seafood
products in Malaysia by DNA barcoding: Improving transparency in food market. Food Control,
64, pp.247-256.
Chuah, L.O., He, X.B., Effarizah, M.E., Syahariza, Z.A., Shamila-Syuhada, A.K. and Rusul, G.,
2016. Mislabelling of beef and poultry products sold in Malaysia. Food Control, 62, pp.157-164.
Hamid, N.R.A., Saaidin, M., Kamari, M.N., Rose, R.M. and Ahmad, S.N.B., 2018. Service
Quality in Halal Restaurants: The Roles of Religiosity and Values. Advanced Science Letters,
24(12), pp.9452-9455.

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Ismail, Z. and Shokor, S.S.A., 2016, March. The Application of Waiting Lines System in
Improving Customer Service Management: The Examination of Malaysia Fast Food Restaurants
Industry. In IOP Conference Series: Earth and Environmental Science (Vol. 32, No. 1, p.
012074). IOP Publishing.
Kaur, N. and Singh, D.P., 2017. Deciphering the consumer behaviour facets of functional foods:
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Moorthy, K., En Chee, L., Chuan Yi, O., Soo Ying, O., Yee Woen, O. and Mun Wei, T., 2017.
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Omar, S.R., Ab Karim, S. and Omar, S.N., 2015. Exploring international tourists' attitudes and
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3848.