Business Analysis of a Small Restaurant: Horan's Bar and Accommodation

This report presents a comprehensive business analysis of Horan's Bar Restaurant and Accommodation, located in Baltinglass, West Wicklow, Ireland. The analysis begins with an introduction to the restaurant, a family-run establishment established in 1881, known for its welcoming atmosphere and services. The report then conducts a PEST (Political, Economic, Social, Technological) analysis of the external environment in Wicklow, Ireland, examining the impact of Brexit, economic conditions, social factors, and technological advancements on the business. Following this, Porter’s Five Forces analysis is applied to assess the competitive landscape, including threats of new entrants, substitutes, bargaining power of suppliers and buyers, and industry rivalry. The report also discusses factors specific to the restaurant's operations, such as demographic influences, supplier relationships, GDP growth, and tax structures. The analysis concludes by summarizing the key findings and emphasizing the importance of understanding the external environment for the restaurant's success.

Running head: BUSINESS ANALYSIS OF A SMALL RESTAURANT
BUSINESS ANALYSIS OF A SMALL RESTAURANT
Name of the Student
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Author Note

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Table of Contents
Introduction....................................................................................................................2
PEST Analysis of Wicklow Ireland...............................................................................2
Porter’s Five Forces Analysis of Horans Bar Restaurant and Accommodation............3
Factors related to the restaurant.....................................................................................5
Conclusion......................................................................................................................5
References......................................................................................................................7

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Introduction
The essay is based on the analysis of Horan’s Bar Restaurant and Accommodation
with respect to the external environment where the restaurant operates. The analysis of the
external environment of an organization is based on the PEST analysis which affect the
operations of the business. The restaurant is located on Main Street in Baltinglass, in West
Wicklow which is a bar that is run by a family and is a place where the locals can meet with
each other and chat as well. The bar was established in the year 1881 and it was known to
provide drinks, food and accommodation to the salesmen who travelled to the other countries
(Visitwicklow.ie 2018). The main philosophy of the restaurant is to provide is to welcome the
locals and the visitors so that they can interact with each other.
PEST Analysis of Wicklow Ireland
Political – The political situation of Ireland has become unstable after the Brexit
effect and this has raised to many issues in the business environment. The effect of the exit of
UK from the European Union has affected the political environment as it is also a part of the
European Union. The changes in the laws and regulations of the countries related to the
European Union has caused a lack of stability in the country.
Economic – The economic condition of Ireland is quite strong as it is supported by
the strong property laws and independent system of judiciary that further enforces the rules of
the law in an effective manner. The policies that are formulated by the government of Ireland
are mainly committed to the open market and this has led to a boost in the economy of the
country. The rate of income tax of Ireland is around 41% and corporate tax rate is as high as
12.5% (Eva et al. 2014). The total burden of tax in Ireland is 29.9% of the total income of the
country. The efficient regulatory process of the country is enough to support the decisions
that are made by the business organizations.

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Social – The social conditions of Ireland are suitable for conducting any type of
business. The business environment in this country is stable and the organizations can
continue their business operations in a profitable manner (Ho 2014). The demographic
conditions of Wicklow island will affect the business environment of Haron’s Bar and
restaurant. The population in this island had increased in the last few years and this impacts
the growth of the restaurant positively.
Technological – The technological environment of Ireland has improved with the
improvement of the economic condition which has been acting as a welcoming factor for the
business organizations. The various technologies like, digital media, software and
communications are mainly required for the development of any business (Gans and Ryall
2017). The technological development of the country attracts the different business
organizations.
Porter’s Five Forces Analysis of Horans Bar Restaurant and Accommodation
Threat related to new entrants – The major threat to the restaurant in the industry is
related to the entry of new players in the market. The service industry of Ireland is booming
in nature and this can attract more and more organizations in the market. The barriers related
to the entry in the market is less and it is easier for any organization to set up a business in
this industry. The threat of new entrants in the market is therefore quite high in this case
(Dälken 2014).
Threat related to substitutes – The threat of the restaurant related to the substitutes
that are available for the customers is high. The reason being that there are many other
restaurants that offer the same services of the same quality to the customers. This can lead to
a change in the pricing policies of the restaurant to remain competitive with the other

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organizations. The pricing of the products that are offered by the restaurant can affect the
profitability of the organization as well (E. Dobbs 2014).
Bargaining power of the suppliers – The power of the suppliers of the organization
related to the bargaining of prices of the different products also affects the profitability. The
restaurant has a small scope of business and hence it has less number of suppliers as well.
This has led to the increased power of the suppliers to bargain with the prices of the raw
materials that are supplied by them. This power can further affect the prices of the food
products of the restaurant. The high costs related to switching of suppliers can increase their
power of bargaining. The restaurant then needs to increase its suppliers so that they can
decrease the power of the suppliers and can control the prices of the raw materials as well
(Gassmann, Frankenberger and Csik 2014). The restaurant needs to decrease its dependency
on the chain of suppliers so that they cannot control the prices of the organization. The
bargaining power of the suppliers is therefore high in this case.
Bargaining power of the buyers – The buyers or the customers of the restaurant
have moderate level of power. The major reason behind this is the ambience provided by the
bar and restaurant to the local customers as well as the visitors. The time that has been spent
by the restaurant in the market is another factor that acts as an advantage. The customers have
moderate amount of bargaining power as they do not have many options in the restaurant
market which provide the same ambience as that provided by Horans (Pietrzak et al. 2015).
Rivalry in the industry – The level of rivalry is high in the market for Horans as
many restaurants are available in the market and the industry of Ireland. The intensity of the
competitive advantage of the restaurant affects the rivals and the pricing policies as well.
Horans provides a friendly and welcoming ambience to the customers which acts as a
competitive advantage for the organization. The restaurant also offers “Special Occasions

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Menu” which attracts the customers at the time of any type of festival. The other services that
are provided by the restaurant include, cycling tours for the visitors, hill walking along with
packed food from the restaurant itself. These services make the restaurant different from any
other bar or restaurant that operate in the market and provides them the competitive
advantage over other organizations (Singla and Apoorv 2015).
Factors related to the restaurant
The Horans restaurant does not operate in any other country except Ireland and the
different factors of Ireland affect the growth and profitability of the restaurant. The
demographic factors of Ireland affect the operations of the organization. The major
demographic factors of Ireland that affect the business of Horans are the age, income of the
local citizens. The income factor is the most important part that affects the growth of Horans.
The restaurant mainly aims at the young age group of customers and their interaction in the
premises of the restaurant. The suppliers of the restaurant mainly affect the operations and the
pricing policy that is set by the organization (Gans and Ryall 2017). The power of the
suppliers is high and affect the prices of the products that are offered by the restaurant. The
GDP growth of Ireland also affects the operations of the restaurant. The GDP of Ireland has
been immensely affected by the changes in the economic situation after the Brexit effect.
This change can affect the business and profitability of Horans. The tax structure of Ireland is
another major factor that affects the profitability of Horans. The different taxes that are
related to the operations of Horans are mainly VAT or valued added tax, food tax and many
more. The rates of taxes affect the pricing structure of Horans (Visitwicklow.ie 2018).
Conclusion
The essay can be concluded with the learning that the operations of Horans Bar
Restaurant and Accommodation are affected by the external environment where the

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restaurant is operating. The different factors of the environment of Ireland affect the ways by
which the restaurant operates and the policies of the restaurant as well. The country is
analysed based on the political, legal, social and technological factors. The restaurant is
analysed based on Porter’s Five Forces model. The analysis has shown that the porters five
forces affect the operations and the profitability of the restaurant.

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References
Dälken, F., 2014. Are porter’s five competitive forces still applicable? a critical examination
concerning the relevance for today’s business (Bachelor's thesis, University of Twente).
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Eva, M., Hindle, K., Paul, D., Rollaston, C. and Tudor, D., 2014. Business analysis. BCS.
Galvin, P. and Arndt, F., 2014. Strategic management: Building depth as well as
breadth. Journal of Management and Organization, 20(2), p.139.
Gans, J. and Ryall, M.D., 2017. Value capture theory: A strategic management
review. Strategic Management Journal, 38(1), pp.17-41.
Gassmann, O., Frankenberger, K. and Csik, M., 2014. Revolutionizing the business model.
In Management of the fuzzy front end of innovation (pp. 89-97). Springer International
Publishing.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.
Pietrzak, M., Jałosiński, K., Paliszkiewicz, J. and Brzozowski, A., 2015. A case study of
strategic group map application used as a tool for knowledge management. Journal of
Computer Information Systems, 55(2), pp.68-77.
Singla, M.L. and Apoorv, D., 2015. How social media gives you competitive
advantage. Indian Journal of Science and Technology, 8(S4), pp.90-95.
Visitwicklow.ie (2018). Horans Baltinglass Bar, Restaurant & Accommodation – Wicklow
County Tourism. [online] Visitwicklow.ie. Available at:

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http://visitwicklow.ie/accommodation/horans-baltinglass-bar-restaurant-accommodation/#
[Accessed 15 Jan. 2018].