Business Environment Analysis of Leon Restaurant

This report presents a comprehensive analysis of the business environment of Leon Restaurant, including environmental analysis, competitive position, and operational process. It also evaluates the resources and capabilities of the restaurant using the VRIN model.

Report writing

Executive summary
This report presented on the business environment and its relevance to the business. In
this, Leon restaurant is taken as an organization, which is a fast food retail outlet. In this report,
to conduct environmental analysis, pestle framework is used and to know the competitive
position of the organization porter's five force model is applied which has helped in identifying
the key strength and opportunity of the business. At last, VRIN model is applied which has
helped in determining the resources and capabilities of the organization and the complete
operational process of Leon restaurant.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Environmental analysis of the industry in which Leon operates.................................................4
Emerging megatrends..................................................................................................................4
Strength of porter five forces.......................................................................................................5
What it takes to succeed ..............................................................................................................5
Change in the industry environment based on the megatrends identified...................................5
Critical evaluation of the strategy of Leon's restaurant...............................................................6
Critical evaluation of operation of Leon restaurant...................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1
Appendix-1......................................................................................................................................2
Appendix-2......................................................................................................................................3

INTRODUCTION
Business environment is a combination of internal and external factors that affects the
business. It is essential for the every organization to carry out environmental analysis which will
help in identifying the business threats and opportunities. It assists the organization in forming a
business strategy based the factors identified. This report presents about Leon's restaurants which
is a fast food outlet with the aim to meet the needs of the health conscious clients along with
establishing reputation for sustainable practice. The purpose of this report is to identify the
factors contributing to competitive advantage. This report covers a complete analysis of the
factors that will affect the Leon's restaurant also identifying the emerging trends that will affect
the business. It also includes evaluation of strategy and operation of Leon's restaurant using some
technical tools which will help in determining its strength and weaknesses and the opportunities
available.
MAIN BODY
Environmental analysis of the industry in which Leon operates
To analyse the environmental factors affecting the industry, PESTLE analysis is used. It
is a framework which helps in identifying the factors influencing the business.
Pestle analysis
Enclosed in appendix-1.
Emerging megatrends
In current market, there is a change in the demand of consumers because of increase in
knowledge and awareness. People want organic and herbal products, this affects the industry
majorly and Leon restaurant because managers of Leon’s restaurant have to evaluate different
resources for availing raw material as per the requirement to maintain the quality (Hamilton and
Webster, 2018). Also, there is government pressure to check the restaurants for the quality check
of material used by management of Leon’s Restaurant. Other than this, the major trends that is
affecting the industry is taste, caring for health, technology, naturalness, globalization of
flavours, local and regional food, speed, low cost food and sustainability (Prajogo, 2016). Out of
these, the trends that is required to be implemented on Leon restaurant is speed, technology and
sustainability and Leon is already working on it and soon will be able to overcome its
weaknesses.
Porter's five forces model

Enclosed in appendix-2.
Strength of porter five forces
The strength of porter five forces is that it provides complete details and information
about the bargaining power of suppliers and consumers which can help management in taking
strategic decision and carry out plan. It has helped Leon restaurant to make changes in the
planning process to take benefits of its strength and take advantage of the opportunity available.
What it takes to succeed
Leon restaurant has succeeded in its business because of its proper understanding about
the business along with the rules and regulations to be followed. It has maintained the proper and
cordial relationship with its customers, suppliers and staffs as well (Deasy and et.al., 2016). It
has established proper contact with its suppliers with respect to the time period and are legally
registered. Leon restaurant used to conduct proper research about the changing needs and the
emerging trends which communicates about the new products and new and innovative
approaches that can be used to take the advantage of the opportunities available. It also has
effective research and development which makes continuous efforts to come up with innovative
ideas.
Change in the industry environment based on the megatrends identified
Nowadays, everyday comes with anew trend and these trends are required to be identified
by the businesses to remain on the competitive edge. Customers demands new and innovative
products and services. It is important for Leon restaurant to serve the customers as per their
demand which will helps in increasing the customer base. Hence, this factor is required to
carefully and effectively managed by the manager of Leon restaurant it will help in achieving
sustainability. There are other changes that are taking place in the market in terms of political
changes, technological changes etc. In respect of political changes, Leon restaurant needs to plan
their strategic for business expansion carefully because of Brexit which may affect the
dimensions of trade of the business. In terms of technological change the Leon restaurant
requires implementing the latest technology which will help in effective customer handling,
improved production system with high quality of products. Along with objective of achieving
sustainability through healthy food products, it has to take care of the needs of the customers. So,
all these changes are required to be treated carefully to take competitive advantage and bring
something new to attract the customers. A timely environmental analysis is essential to survive

and growth. Also, Leon restaurant is facing tough competition from the foreign chain of
restaurants that are opening their outlets near to the Leon restaurant and offering same food
stuffs at lower prices which is becoming a major threat for it. This will encourage price
competition in the market and will force Leon restaurant to lower its prices. Along with that the
declining reputation of motorway cafe's with respect to low quality has also affected the
expansion plan of the restaurant and Leon restaurant needs to find away to tackle the situation
and remain in the market.
Critical evaluation of the strategy of Leon's restaurant
To critically analyse and evaluate the resources and capabilities of Leon restaurant VRIN
framework will be used. It helps in determining whether the resources and capabilities is the
source of sustainable competitive advantage to the business or not (Touil and Jabraoui, 2019). In
VRIN analysis, organizations resources and capabilities are the foundation of competitiveness. It
measures valuable, rare, inimitable and non-substitutable. It determines on the basis of resources,
the core competencies of the organization. A detailed analysis is carried out below.
Resources or
capabilities
Valuable Rare Inimitable Non-
substitutable
Strong global
presence
 It has its
global
presence in
different
parts of the
world
which is
very
valuable
like
Norway,
Belgium,
Germany,
Switzerlan
d,

Denmark
and
Netherland
s.
Double digit
growth
 With the
ever
growing
network
of
restaurants
across the
world
(Hsu,
2019). In
2018, its
sales were
up 15% as
compared
to the
previous
year.
Also, in
2019,
there sales
has
increased
in double
digit. So,
this is rare
for the
competitor

s to
achieve
such a
success
continuou
sly.
Financial
resources
 It is
valuable
source as
the
restaurant
has seen a
immense
growth in
its sales, up
by 24.5%
to £95
million for
2018 which
will add as
a
sustainable
competitiv
e
advantage
 It can be
easily
imitable
as there
are other
competitor
s outside
with more
financial
strong
position
then Leon
and also
the new
entrants
can also
give tough
competitio
n to it.
Capturing the
vegan zeitgeist
 Leon
restaurant
has taken
the
advantage

of meeting
with the
changing
needs of
the
customers
and also
capturing
the needs
of most
untouched
customer
segment,
that is,
vegan
zeitgeist.
It has been
an
important
part for
the
restaurant
in rising
its sales.
 It is
difficult
for any
other
competitor
to come
up with

the
something
similar
and will
require
effective
skills.
Food products  The
products
offered by
Leon
restaurant
is unique
and sets it
apart from
other
competitor
s. This will
add
sustainable
competitiv
e
advantage
over
others.
Human
resource
management
 The Leon
restaurant
is having
effective
It is rare also
because it is
difficult to have
such a skilled and

and
efficient
human
resource
manageme
nt team
with
required
skills to
deal the
situation
and
customer
demand.
They are
highly
professiona
l which
makes it
valuable
for the
organizatio
n.
professional team
which will help in
achieving the
business
objectives
successfully.
From the above it can be said that the resources and capabilities of the Leon restaurant
can help it in achieving sustainable competition if properly managed and taken care of. It has met
with the changing needs of the consumers from junk food to healthy and vegan food items
((Talaja and et.al., 2017)). On the basis of technology used, the Leon restaurant needs to update
itself to meet with the changing preferences as consumers are now more knowledgeable about
the sustainability of the planet. If compared to the restaurant in the same industry like
McDonald's, it has unique food product with specific recipe which is very valuable,

Technological efficiency of the McDonald is much more advanced with respect to order
processing system. Both Leon and McDonald has strong position in association with low cost of
products which are meeting the with needs of the consumers and also global brand image which
increases customer trust. So, lean restaurant needs to adopt technology which will help in
efficient food production and customer management which will result into cost efficiency and
low prices.
So, overall the Leon restaurant has the required capability and resources to face the
competition and the ability it's attain sustainable competitive advantages over its competitors.
Critical evaluation of operation of Leon restaurant
To become sustainable Lean restaurant has adopted practices that will help it to achieve
this objective. The restaurant was stared with the objective to provide Naturally fast food which
means providing tastes goods with good foods which is not harmful for the planet. But after
getting in conversation with the environmental group, has evolved the idea to put focus on
specific goals, that is, increasing the number of plants on their menu, using renewable sources of
energy and also minimizing the use of plastic.
To be more hygienic and organic, the restaurant is sourcing its products when it's in the
season. It has always focused on using more veg and better meat. It works with the objective to
increase the quality up and use veg to take more space on the plate. It is also increasing the
number of plant based dishes in its menu and customers are loving it too. Currently, the 2/3 of its
menu is vegetarian and 1/3 is vegan. It sources two types of fish rated '1-2' based on Marine
Conservation Society ratings. The restaurant does not source everything locally and has venture
with other suppliers on the same principle and to buy only fairly traded products. For example
the coffee of the restaurant, its fair trade, organic and proceeds from the sell of these goes to the
world Land Trust, which buys and conserves the big areas of rainforest. Previous year, Leon
restaurant helped to but over 100 acres of rainforest from where it sources their beans.
These practices undertaken by Leon restaurant is in response to its vision to be a
restaurant which aims to provide healthy food products to the consumers. It has successfully
achieved this by making customers eat vegetables and organic food products. Leon serves to
bring the best food to the people. It has teamed up with professional chefs, TV presenters and
food writers to bring something new and innovative which will help in meeting up with its
vision.

Apart from this, the restaurant has taken initiate for the well being of the society. It's
gender pay gap is small as compared to UK and Food and beverage sector and the women made
up 55% of the workforce across different roles. All the restaurants of Leon are powered by 100%
renewable energy. It is also making efforts to reduce the use of plastic. It serves their food in
compostable boxes like takeaway coffee cups. Last year, it also replaced its plastic cutlery and
straws with biodegradable and paper alternative.
So, from the above evaluation, it can be said that Leon restaurant has successfully
achieved its vision of catering healthy food products to its customers using sustainable practices
as it is using fresh and organic food products and also taking preventive actions to meet the
needs the environmental needs of the customers.
CONCLUSION
From the above, it can be concluded that analysing business environment is very essential
to the business as it helps in identifying the threats that can influence the business functioning.
The purpose of this report is to accomplish the desire of the Leon restaurant of providing healthy
products to its customers and building the reputation for using sustainable practices. After
analysing pestle, it has helped Leon to identify the factors that may affect its business like
political factors, technological factors etc. Also, porter five forces has helped in the organisation
in knowing its competitive position and the strength and opportunities available like, low
bargaining power of suppliers. The threats and vulnerabilities that the organization is exposed to
such as strong bargaining power of customers, threat of new entrants, increasing competition and
the increasing threat of availability of substitute products. All these factors are determined using
porter's five forces model.

REFERENCES
Books and journals
Deasy, S and et.al., 2016. Controlling use of a business environment on a mobile device. U.S.
Patent 9,247,042.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Hsu, Y. P., 2019. Using VRIN Framework to Discuss Competitive Advantage of Wholesalers in
Taiwan-A Case Study. Taiwan, Graduation thesis.
Prajogo, D. I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International journal of production Economics, 171,
pp.241-249.
Talaja, A and et.al., 2017. Market orientation, competitive advantage and business performance:
Exploring the indirect effects. Društvena istraživanja. 26(4). pp.583-604.
Touil, A. A. and Jabraoui, S., 2019, November. The Contribution of Big Data to Achieving a
Competitive Advantage: Proposal of a Conceptual Model Based on the VRIN Model. In
International Conference Europe Middle East & North Africa Information Systems and
Technologies to Support Learning (pp. 116-123). Springer, Cham.
Online
Bush Thomas, 2019. PESTLE Analysis of the Food Industry. [Online]. Available
Through:<https://pestleanalysis.com/pestle-analysis-of-the-food-industry/>.
Farooq Umar, 2019. Pestle Analysis of a Restaurant. [Online]. Available
Through:<https://www.marketingtutor.net/pestle-analysis-of-a-restaurant/>.
Gregory Lawrence, 2018. McDonald’s Five Forces Analysis. [Online]. Available
Through:<http://panmore.com/mcdonalds-five-forces-analysis-porters-model>.
Murphy Ewan, 2018. Subway Porter Five Forces Analysis. [Online]. Available through:
<https://www.essay48.com/term-paper/13698-Subway-Porter-Five-Forces>.
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Appendix-1
PESTLE analysis
Factors Findings Citation
Political (High) Currently, there is uncertainty
in UK due to Brexit which will
affect the trade agreement. The
planning regulation in UK
might restrict where the
franchise of the store can
locate.
(Farooq Umar, 2019)
Economic (Moderate) UK is growing at the low pace
which has affected the industry
and has reduced the level of
income from each franchise
which will have an adverse
impact on Leon restaurant.
(Farooq Umar, 2019)
Social (Low) The increasing demand for
organic and healthy product
has impacted the entire
industry. Leon has already
taken care of it and has low
impact.
(Farooq Umar, 2019)
Technological (High) Leon restaurant needs to work
on it as it lacking behind in
using the latest technology as
compared to its competitors.
(Bush Thomas, 2019)
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Appendix-2
Porter's five forces model
Forces Findings Citation
Threat of new entrant
(Moderate)
Currently, in UK. for entering
the market and giving
competition to big giants
requires huge fund. So, the
threat is low.
Gregory Lawrence, 2018
Bargaining power of
customers (Strong)
As there are many stores
available with the products
that Leon provides so
bargaining power of customers
is more.
Gregory Lawrence, 2018
Bargaining power of
suppliers (Weak)
Since there are many suppliers
available with similar
products.
Murphy Ewan, 2018
Threat of substitution
(Strong)
There are few competitors
available which are providing
similar product so the threat is
high.
Murphy Ewan, 2018
Competitive rivalry (Strong) Competitors like Logan's
roadhouse, Byron are the top
competitors of Leon with
similar products.
Gregory Lawrence, 2018
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