Managing Strategy, Operations and Partnerships - A Case Study of Leon Restaurants

This report provides a critical evaluation of the strategy, operations, and partnerships of Leon Restaurants, a fast food chain in the UK. It includes an analysis of the industry environment, assessment of the company's resources and capabilities using the VRIN framework, and an evaluation of how its operations support its vision. The report highlights the importance of strategy, operations, and partnerships in achieving success in the market.

MANAGING
STRATEGY,
OPERATIONS AND
PARTNERSHIPS

EXECUTIVE SUMMARY
Strategy, operations and partnerships are essential for a company to succeed within the
market and get an effective competitive edge. Hence, the report covers the case of Leon
Restaurants, which is one of the most effective fast food chains in the UK.
Purpose of the report was to identify the industrial position of the restaurant sector of the
UK. For this aspect, PESTLE analysis was used which was effective to determine the external
influence on the sector. Moreover, Porter's Five Forces analysis was used which determined the
industrial forces that could become success or failure factors for the sector and organisation.
Moreover, the agenda of the report was to appropriately identify the strategy of the
company. for this purpose, VRIN Framework has been used which identified in evaluation of the
resources and capabilities of the company.
Furthermore, based on the resources, the report also identifies as to what extent the
determined operations are sustainable when in effect. The outcome of this is that the firm has
operations such as Investment and Sustainability, which are very much sustainable in order to
ensure effectiveness and help in gaining the firm an appropriate edge in the market.

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Critical Evaluation of environment of the Industry................................................................1
TASK 2............................................................................................................................................3
Critical Evaluation of Leon Restaurants' Strategy.................................................................3
TASK 3............................................................................................................................................6
Critical Evaluation of Leon Restaurant's Strategy.................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
APPENDICES...............................................................................................................................10
Appendix 1...........................................................................................................................10
Appendix 2...........................................................................................................................12

INTRODUCTION
Strategy within a business organisation refers to all the procedures and practices which
are adopted and followed by a company in context of gaining a competitive edge in the market.
In addition to this, operations and partnerships are another essential aspects which must be
implemented by the company in order to achieve its business objectives more effectively
(Thompson, Strickland and Gamble, 2015). The report below is based on Leon Restaurants,
which is an appropriate fast food chain operating within United Kingdom, which deals in
effective and healthy food items for individuals who are conscious towards their health. The
report covers a critical evaluation of the environment of the industry in which Leon Operates,
along with critical assessment of strategy and operations of the organisation against its vision and
industry success factors. In addition, the report includes identification of range of relevant
emerging issues and exploration of their their potential impact within the firm's value chain. In
addition, the report identifies areas of potential vulnerability facing Leon Restaurants.
TASK 1
Critical Evaluation of environment of the Industry
It is highly essential that the environment of the overall industry is analysed and
evaluated in order to appropriately assess the external opportunities and threats. Hence, below
are several findings in relation to evaluation of the industrial environment performed using
PESTLE Analysis (Refer Appendix 1):
 Political Factors:
As per the analysis below, political instability within the UK has severely impacted the
restaurant sector and companies like Leon Restaurants as it has made their supply chain
management more complex. Moreover, this instability has also made it complex for the company
to operate within the market due to frequent modifications (Nurmala, de Leeuw and Dullaert,
2017).
 Economical Factors:
Economically the UK is in a very bad shape, which is causing hindrances for the
restaurant sector and its companies. This is because high rate of inflation is forcing organisations
like Leon Restaurants in providing its services at lower cost to invite more customers, which
might be beneficial in long term, however, the short term gains are challenging to earn. This
1

factor is further contributed by the costlier supply chain, which might cause more hurdles for
firms like Leon Restaurants in the sector.
 Social Factors:
The industry looks quite in a challenging shape as far as the social factors are concerned.
This is because the customers demand better items at lower prices, which is challenging for the
sector and organisations like Leon Restaurants to cover their cost and earn profits. However,
digitalisation and social inclination towards online delivery is an opportunity for the sector to
ensure effective expansion (Bustinza and et. al., 2019).
 Technological Factors:
In terms of technology, there are several appropriate and effective opportunities available
for the sector and organisations like Leon Restaurant. This is because there are several
technologies which are very well enhanced such as Artificial Intelligence and Automation, which
could be used by the sector in order to make their booking and payments functions faster.
In addition to the above factors, it is also necessary that several forces in the industry are
identified in relation to assessing the impact of those forces over the restaurant sector of the UK
and how it influences companies like Leon Restaurants. For this purpose, Porter's Five Forces
Analysis is used and implemented below along with its key findings (Refer to Appendix 2):
 Supplier's Bargaining Power:
This power is quite high within the industry due to likeliness of Brexit. Hence, in this
respect, organisations like Leon Restaurants must work towards improving their supply chain
management by forming ties with suppliers within EU nations.
 Buyer's Bargaining Power:
UK's restaurant sector has a moderate bargaining power where the customers are
concerned. To lower this down within the company, it is highly essential for the restaurant sector
to encourage practices within businesses like Leon Restaurants in the UK, in relation to
providing the food items a lower rates.
 Threats of Substitutes:
This threat is high for UK's Restaurant sector, which requires the companies like Leon
Restaurant to include wider variety of food items which creatively reduces any scope of
enhancement of substitutes.
 Threat of New Entrants:
2

This aspect reflects the strength of the sector as the business enjoy their market share due
to tough political and social conditions within the organisation. However, this still requires
companies such as Leon Restaurants in enhancing the scope of their marketing within the sector.
 Competitive Rivalry:
There is a positive yet evident competitive rivalry within the sector, which is also an
essential strength for the industry. However, this requires the companies in the industry to
innovate and creatively present new dishes and use high end technologies to sustain in the
market (Warner and Sullivan, 2017).
TASK 2
Critical Evaluation of Leon Restaurants' Strategy
It is highly essential for an organisation to identify and evaluate its strategy in an
effective and appropriate manner, which helps the firm in determining that whether it is
competitive enough to cease opportunities or not. Hence, in this respect, VRIN Framework is
used to evaluate resources and capabilities of Leon Restaurants:
Identification of Resources of Leon Restaurants Financial Resources: One of the most effective resources for Leon Restaurants is its
financial assets. The firm has an appropriate investment capacity with which the firm is
expanding the overall marketplace. As an example, the organisation raised around £7
million equity to ensure international expansion (Leon restaurants reports its financial
results for 2017, 2019). Human Resources: Another impeccable resource with the company is its human
resources. The firm operates in meritocracy, where people are given equal opportunities,
moreover, the gender pay gap is very low within the organisation as it incorporates
talented and skilled employees, which appropriately contributes towards the
competitiveness of the organisation (SUSTAINABLE RESTAURANT ASSOCATION,
2019).
Identification of Capabilities of Leon Restaurants Sustainable Working: One effective capability of the organisation is its enhanced and
appropriate inclination towards sustainability practices. For instance, in technological
3

terms, the firm is appropriately and effectively using renewable technology and energy
which promotes in inclusion of plant-based items in the menu. Diversity: The firm keeps on experimenting with its menu and food items in its quest of
producing healthier food for customers. This diversity is its effective capability in terms
of satisfying customers in dynamic business environment.
Evaluation of Resources and Capabilities
Below is the evaluation of the resources and capabilities mentioned above through usage
of VRIN framework which is discussed below:
RESOURCES /
CAPABILITIES VALUABLE RARE INIMITABLE NON-
SUBSTITUTABLE
Resources
Financial
Resources
Financial
Resources - - -
Human
Resources Human Resources Human Resources Human Resources Human Resources
Capabilities
Diversity Diversity - - -
Sustainable
Working
Sustainable
Working
Sustainable
Working
Sustainable
Working
Sustainable
Working
Thus, based on the above display, the evaluation of these resources and capabilities is
mentioned below:
 Valuable:
Financial resources are very much valuable for the organisation in context of enhancing
the scope of investment and improvisation in processes.
Sustainable Working helps the firm in supporting and protecting the environment which
makes it more valuable.
Diversity aids the organisation in gaining a competitive advantage through production of
effective and unique dishes which satisfies the market needs.
4

Human Resources of the company are very much valuable as they appropriately work
towards helping the firm in gaining a competitive edge.
 Rare:
Sustainable Working is very rare as it requires consideration of social practices and
alterations in working which is not easily found in the sector.
It is quite rare that employees of other company have exact capabilities and competence
as the ones in Leon Restaurants.
 Inimitable:
The firm adopts various practices and patented resources such as renewable energy which
helps them in development of plant based products.
The talent, mindset and cognitive capabilities in a person cannot be imitated which makes
the human resources of the firm inimitable (Clott and Hartman, 2016).
 Non-Substitutable:
The sustainable practices adopted by the restaurants include renewable energy,
sustainable recycling and adherence to principles of food management, which could not be
substituted.
Human resources of the firm could not be substituted as their thought process is unique
and a contribution towards the firm's profitability.
Comparison of Resources and Capabilities with Industrial Success Factors
It is highly necessary that the resources and capabilities are compared with the industrial
success factors which allows the company in assess its current effectiveness towards future
growth and prosperity. Hence, this comparison is stated below:
 Technology and Sustainable Working
As per the PESTLE analysis, technological advancements are one of the most appropriate
and effective opportunities for Leon Restaurants. Furthermore, sustainable working is quite
effective in relation to grabbing this opportunity in the industry. This is because along with
renewable energy, there are automated food management system, which could be adopted by the
firm to ensure effectiveness in this aspect.
 Human Resources and Competitive Rivalry
This resource with the company is very much effective against the rising competitive
rivalry within the sector. The reason behind the same is that through proper innovation, creativity
5

and intellect, the human resources could appropriately and effectively help the company in
gaining competitive advantage in the market, hence, ensuring sustainability in the competitive
industry (Iossa and Martimort, 2015).
TASK 3
Critical Evaluation of Leon Restaurant's Strategy
For an organisation like Leon Restaurant, it is highly essential that its strategy is critically
evaluated. To achieve the same, there are several aspects which are evaluated below:
Operations of Leon Restaurants
With the resources available with the restaurants above, there are several operations that
are adopted and accomplished by the company and are effectively displayed below:
 Investment In Technology
One of the prime operations within Leon Restaurants is that it invests in technology,
particularly the ones which assists them in recycling and food wastage minimisation. Such aspect
helps the firm in reusing the equipments, materials and renewable energy to carry out functions
of the restaurant.
 Sustainable Food Development
Another operation which is evident by the resources above is that the firm's human
resources consistently contributes in sustainable food development. For instance, recently,
several environment protection groups approached and collaborated with by the organisation
who contributed in developing a culture of sustainability within the company and its operations.
Vision of Leon Restaurants
The vision of Leon restaurant is to produce and deliver food items that tastes good as well
as are healthier. Moreover, the company also appropriately aims at simplifying the eating process
of individuals by providing the food on the go.
Critical Assessment of the Extent to which Operations Supports the Vision
It is highly essential to assess how operations of the company supports the vision. In this
context, the assessment of the operations against the vision is performed below:
6

 Investment: Technology could help the firm in developing more sound and better
outcomes which contributes towards effective food development, that is both healthier
and tastier. However, as per the analysis, only 45% of the items in the menu are plant
based, which is ineffective for the company in achieving its vision appropriately. Sustainability: This operation, such as 100% renewable energy and recycling processes
helps in achieving healthier food preparation in the company. Moreover, this also
contributes in enhancing the scope of improvement in eating processes through
preparation of food through sustainable operations (Gong, 2015).
Evaluation of Sustainability within Operations
Hence, it could be evaluated from the above analysis, that sustainability is very much
reflected by the operations of the organisation. This is because all its processes and functions are
surrounded by sustainable practices and enhancing the technologies and competencies which
assists in promoting sustainability within the company.
CONCLUSION
Thus, it could be concluded by the information above, that strategy, operations and
partnerships are very much essential towards contributing profitability and productivity within an
organisation. In addition to this, external industrial analysis helps in identifying the challenges
and success factors within a sector. Furthermore, use of VRIN framework is essential in
determining the resources and capabilities of a company in context of gaining competitive
advantage. Lastly, identification of operations and comparing them against vision ensures
competence of the firm in relation to sustainability.
7

REFERENCES
Books and Journals
Bustinza, O.F., and et. al., 2019. Product–service innovation and performance: the role of
collaborative partnerships and R&D intensity. R&D Management. 49(1). pp.33-45.
Clott, C. and Hartman, B.C., 2016. Supply chain integration, landside operations and port
accessibility in metropolitan Chicago. Journal of Transport Geography. 51. pp.130-139.
Gong, Y., 2015. Global operations strategy. Springer.
Iossa, E. and Martimort, D., 2015. The simple microeconomics of public‐private partnerships.
Journal of Public Economic Theory. 17(1). pp.4-48.
Nurmala, N., de Leeuw, S. and Dullaert, W., 2017. Humanitarian–business partnerships in
managing humanitarian logistics. Supply Chain Management: An International Journal.
22(1). pp.82-94.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Warner, M. and Sullivan, R. eds., 2017. Putting partnerships to work: Strategic alliances for
development between government, the private sector and civil society. Routledge.
Online
7 SIMPLE PANTRY SWAPS FOR ORGANIC FOOD. 2019. [Online] Available Through:
<https://www.naturespath.com/en-us/blog/7-simple-pantry-swaps-for-organic-food/>
Brexit deadlock to continue, political instability to increase. 2019. [Online] Available Through:
<https://www.controlrisks.com/our-thinking/insights/brexit-deadlock-to-continue-
political-instability-to-increase>
Ease of Doing Business in United Kingdom. 2019. [Online] Available Through:
<https://tradingeconomics.com/united-kingdom/ease-of-doing-business>
Fallout from Brexit could have profound impact on food suppliers, restaurants in UK. 2019.
[Online] Available Through: <https://www.producebusinessuk.com/insight/insight-
stories/2019/01/10/brexit-fallout-could-have-profound-impact-on-food-suppliers-
restaurants-in-uk>
Five Forces Analysis: Leisure, Tourism and Hospitality Industry. 2019. [Online] Available
Through: <https://www.ukessays.com/essays/tourism/the-tourism-leisure-and-
hospitality-industry-tourism-essay.php>
How tech has helped transform the restaurant industry. 2019. [Online] Available Through:
<https://www.uktech.news/news/how-tech-has-helped-transform-the-restaurant-
industry-20190214>
Leon restaurants reports its financial results for 2017. 2019. [Online] Available Through:
<https://www.verdictfoodservice.com/news/leon-restaurants-financial-results/>
Number of UK restaurants going bust up by a fifth in 2017. 2019. [Online] Available Through:
<https://www.theguardian.com/business/2018/feb/19/number-of-uk-restaurants-going-
bust-up-by-a-fifth-in-2017>
SUSTAINABLE RESTAURANT ASSOCATION. 2019. [Online] Available Through:
<https://leon.co/magazine/blog/three-stars-by-the-sra/>
The Rise of Food Delivery Services in the UK. 2019. [Online] Available Through:
<https://www.supplychainonline.co.uk/article/the-rise-of-food-delivery-services-in-the-
uk/>
8

UK inflation hits six-month high of 2.7%. 2019. [Online] Available Through:
<https://www.bbc.com/news/business-45572856>
9

APPENDICES
Appendix 1
PESTLE Analysis
FACTORS DESCRIPTION SOURCES
Political Factors
These are the factors which reflect the political
situation within a country which have prominent
impact on an industry and organisation. For
example, in terms of the restaurant sector within
the UK, it is currently suffering from the
political instability within the country, due to
the likely events of Brexit. This event has also
led to changes in regulations, which have
negative impact on the industry. This is due to
the fact that the regulations have cause
ineffectiveness in supply chain management of
organisations within the industry. Hence, these
aspects above represents the threat to the
industry and organisations like Leon
Restaurants.
Brexit deadlock to
continue, political
instability to increase,
2019
Economical Factors All the elements which are focused upon the
economic performance of a country are
considered in these factors. The UK is
experiencing a massive downfall in terms of
economy, with high rate of inflation and
decrease in value of pound. An advantage of this
for restaurant industry is that it would assist the
company in appropriately provide the services at
lower rate to attract more customers. However,
disadvantage in this aspect for the sector is that
UK inflation hits six-
month high of 2.7%,
2019
10

the supply chain of the companies like Leon
Restaurants within the sector is becoming
costlier due to inflation and Brexit, which is
restricting sector and the company in adopting
price penetration strategy.
Social Factors
These factors indicate all the social aspects,
such as trends and preferences which influence
the decisions taken by the industry. Individuals
seek high quality food items at lower price
range. Moreover, another trend which is
prevalent in the society is inclination towards
online food delivery. Hence, the latter is an
opportunity for the sector and organisations like
Leon Restaurants to expand their businesses in
both offline and online channels. In terms of
trend in relation to the perception of customers,
it is quite a threat for the sector and the
organisation due to the competitive pricing
range that is followed within the industry.
The Rise of Food
Delivery Services in
the UK, 2019
Technological
Factors
Within these factors, all the technological
advancements and its influence on organisations
is highlighted. In relation to the restaurant sector
of the UK, technologies have contributed quite
effectively towards transforming the overall
industry. Mobile technologies such as
automation and and integrated Artificial
intelligence have made it quite easier for the
organisation in context of enhancing the scope
of improvement in helping the sector and
companies like Leon Restaurants in managing
How tech has helped
transform the
restaurant industry,
2019
11

their daily operations such as booking, payments
and so forth.
Appendix 2
Porter's Five Forces Analysis
FORCES DESCRIPTION SOURCES
Supplier's
Bargaining Power
These are the individuals who supply the raw
materials to the organisation in order to convert
them into fresh products, such as groceries,
technologies, etc. In relation to the restaurant
sector of the UK, almost 30% of the traders of
businesses within this sector were from EU
nations, making it one of the major suppliers of
the sector. However, the Brexit fallout has its
negative implications towards this aspect as the
bargaining power of suppliers have increased.
Fallout from Brexit
could have profound
impact on food
suppliers, restaurants
in UK, 2019
Customer's
Bargaining Power
Customers are the driving forces for the UK's
restaurant sector as they are the end users of the
products and services of the sector. Customers
within the country have distinct demands in
terms of prices due to inflation within the
country. Hence, in order to appropriately
entertain more customers, organisations like
Leon Restaurants are required to provide their
offerings at lower prices. Furthermore, they
have a high inclination towards healthier diet,
which is quite effectively provided by
companies like Leon Restaurants. Hence, the
bargaining power of customers with respect to
Five Forces Analysis:
Leisure, Tourism and
Hospitality Industry,
2019
12

the industry is moderate.
Substitutes' Threat
Substitutes refer to the offerings which could be
used in place of the existing offerings. The
restaurant sector in the UK provides healthier
food, particularly businesses like Leon
Restaurants. However, these could be
substituted by other restaurants through food
items like Peanut Butter, Refined Flour,
Vegetable Oils, etc. Hence, this threat is high in
context of the UK's restaurant industry.
7 SIMPLE PANTRY
SWAPS FOR
ORGANIC FOOD,
2019
Threat from New
Entrants
Within the UK's restaurant sector, the threat of
new entrants has always been an appropriate
force which has influenced the working of this
industry. However, currently, UK is at 8th rank
in terms of ease of doing business, which is
affected by the high investment which is
required by other companies to enter the market
and ineffective regulations after Brexit. Both are
in the favour of existing companies like Leon
Restaurants, which is a significant strength of
the sector.
Ease of Doing
Business in United
Kingdom, 2019
Competitive Rivalry Another strong force within the sector is the
rivalry amongst the organisation which are
already existing within the sector. Thus, in the
UK, there are several organisations, such as
Leon Restaurants, Jamie's Italian and so forth,
which deals in high quality products and diverse
food items to satisfy the needs of customers. In
context of Leon Restaurants, despite of being a
fast food change, the organisation is very much
Number of UK
restaurants going bust
up by a fifth in 2017,
2019
13

effective in providing healthier food items,
which is quite effective for nourishing and
promoting competition in the sector. Hence, this
reflects the strength of the industry and high
power of competition.
14