Leon Restaurant: Strategic Management and Operational Analysis Report

This report provides a comprehensive analysis of Leon Restaurant's strategic operations and market position. It begins with an introduction to strategic management and then delves into a detailed examination of Leon Restaurant using various analytical frameworks. The report includes a PESTLE analysis to assess the political, economic, social, technological, environmental, and legal factors influencing the restaurant. It also employs the VRIN model to evaluate the restaurant's internal resources and capabilities, determining their value, rarity, imitability, and organizational aspects. Furthermore, the report explores the restaurant's operations and vision, detailing its operational procedures, vision for the future, and the issues and risks it faces. The report also discusses strategies for overcoming these challenges, offering insights into how Leon Restaurant can improve its market position and achieve its goals. The analysis covers aspects such as Porter's Five Forces, supplier and buyer power, and competitive rivalry. The report highlights the importance of adapting to customer preferences, managing staff effectively, and establishing a unique selling proposition to ensure long-term growth and success in the competitive restaurant industry.

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Contents
Introduction-....................................................................................................................................2
Pestle Analysis.............................................................................................................................4
VRIN model-...............................................................................................................................5
Operations and Vision of Leon Restaurant..................................................................................7
Issues and risks that a restaurant faces-.......................................................................................8
Overcoming the issues which the restaurant faces in the market................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10
Introduction-
A plan specifying how an organization will allocate resources in order to support infrastructure
and production. An operations strategy is typically driven by the overall business strategy of the

organization, and is designed to maximize the effectiveness of production and support elements
while minimizing costs. Strategic management involves setting objectives, analyzing the
competitive environment, analyzing the internal organization, evaluating strategies, and ensuring
that management rolls out the strategies across the organization. This report covers questions
such as Porter’s Five forces Pestle Analysis VRIN model, Operations and Vision of Leon
Restaurant Issues and risks that a restaurant faces, Overcoming the issues which the restaurant
faces in the market.
Porter’s Five forces
Threat of new entrants-
Entering in the industry of restaurant is easy it just requires a minimal amount of investment.
Also it is concerned with economies of scale once the Leon restaurant starts working in a
efficient manner then this factor is free. They also have to keep in mind the factors such as cost
of operating and the cost which is fixed. (Biscop, 2017)
Bargaining Power of Buyers-
Leon restaurant has to change their behavior according to the customers because this industry is
run by their choice. They have to set the prices of the dishes according to the investment they
have made and the people they are targeting.
Bargaining Power of Suppliers-
By these people Leon restaurant buys their raw materials which they use in the restaurant. Leon
restaurant operates on a small scale so they order in limited quantity so that creates high power
of supplier. More the no. of buyers more it influences the decisions of their buyers.
Threat of Substitute Products-
This level is severe for Leon restaurant as there are many restaurants in the market which makes
the competition high and even the cost of switching to another one is not high. If Leon restaurant

does not provide a nice ambience and quality food that satisfies the people then they have to face
this threat.
Competitive Rivalry-
Leon restaurant has to always keep in mind that they have to fight with many restaurants as they
are many restaurants who are dealing in the same area and targeting the same customers. It gets
difficult for the restaurant sometimes to maintain their operations. Apart from this they face a lot
of competition from big food chains such as McDonald’s, Burger King etc.
Pestle Analysis
Political Factors-
This factor is concerned with the guidelines related to health and safety and the tax reforms.
Leon restaurant has followed these regulations so that they cannot impact the business in any
negative way. Leon restaurant follow these guidelines from cooking to delivery. (Slack and
Brandon-Jones, 2018)
Economic Factors-
This factor is concerned with the rate of inflation in the country and the disposable income
people have in the country because if the Leon restaurant increases its prices then they will loose
their customers and if they have more disposable income this factor won’t affect the business of
them.
Social Factors-
This factor is concerned with following the culture of the country. People nowadays don’t prefer
unhealthy or junk food they only prefer healthy food that is why Leon restaurant has kept a
variety of options in dishes for different people. (Gibson and Parkman, 2018)
Technological Factors-

To make their operations successful and easy Leon restaurant takes the help of this aspect.
Whenever the owners are not in the restaurant they have set up a software which is made
specifically for billing so that the employees cannot cheat and on the other hand they have set up
CCTV cameras so that they can watch the operations that are happening in the restaurant without
their presence and outside from it. (Roos and Von Krogh, 2016)
Environmental Factors-
Leon restaurant has taken up every measure to not made any damage to the environment. They
maintain the cleanliness inside the restaurant and they maintain it even on the outside of it.
(Behnken, Groninger and Akamani, 2016)
Legal Factors-
Leon restaurant serves food of great quality and they always welcome the people who came to
test the quality of their food and standards they have maintain. These people come from the legal
authorities and check the raw materials how they are cleaned, are the products expiry or not and
then they approve the restaurant to conduct their operations.
VRIN model-
The restaurant uses this model to figure out and evaluate their resources such as human,
financial, material and non material. So that they can bring improvement in the resources
wherever they are lacking. This model is a subset of Pestle analysis only difference is it focuses
on the internal aspects of the business. This assessment helps the Leon restaurant in figuring out
the strategic management and in which area and where development is needed by them. The
restaurant figures out of what resources their resources can be valuable. (Uhl and Gollenia, eds.,
2016)
Valuable-
They have many valuable resource like they provide Wi-Fi and internet access to the people who
come to dine in at their place. They have facilities such as compensation for employees so it

makes it easy for them to delegate and distribute the work. They serve quality food at cheaper
rates with the best ambience. They have even established and set up their business in the prime
location where it is difficult to get access but they gain more footfall in this area. Leon restaurant
provide benefits to their employees after they complete the minimum tenure with them and serve
for them for years which is another valuable resource. (Wang, 2015)
Rare-
Some of the resources they have are rare such as their ambience which they provide at
affordable rates. They provide quality and many varieties and many cuisines under one roof.
Their strategy of compensation of employees is rare. Leon restaurant gives benefits to their
employees which is rare in this industry at an early stage.
Imitability-
Some of the resources Leon restaurant provides and consider them valuable and rare can also be
imitate by some other restaurants who are in competition with the Leon. These type of resources
are the benefit the restaurant provides to their employees. Another one is to provide a better
ambience at affordable rates to their customers. (Zeng and Xia, 2015)
Organization-
Leon restaurant is not a big chain but they are trying out their best to make their name under that
list. They are giving their customers satisfaction. They have managed their team in a way so that
work can be completed in an efficient manner. The resources they have put together they have
made sure that they are using it and implementing it properly. (Wang and et.al., 2018)
There is still a need for improvement in various areas Leon restaurant needs to increase their
buying power if they want to make it big in the restaurant industry and they need to set up a
department for research and development so that they can know the current trends of the market
and they can make the appropriate changes which are necessary in the process. If the restaurant
wants to increase their revenues then they have to open up more of their dine in at different
places so that they can target more and more people. If they set up many dine in then they will
also be able to generate the image in the eyes of social public and will be able to gain brand
recognition in the market. If they make it this big and become successful then to expand their

operations into outer countries they will be able to raise their capital as they have gained
credibility in the market then they will be allowed to do that. The core competencies of the
restaurant this model has helped to figure out are their relationship with suppliers, satisfaction
and giving their customers a better experience, vision to go ahead and expand in the market,
putting money into the research and development department so that they can bring innovation
into the market. (Cohen, 2017)
Operations and Vision of Leon Restaurant
Operations-
Leon restaurant have set up a manual to make it easy to run their operations which includes
checklists. By this tool they complete the task in a sequence or in order so that the reservations
don’t get messed up. It is a nice method and once the employee has completed its work then they
have to sign the checklist. This keeps them motivated and creates a sense of being responsible in
the terms of accountability and ownership. They have written the procedures to maintain on a
daily basis so that the rules, regulations and standards of Leon does not get break. This helps
them to remember which instructions to follow such as what procedure needs to be done in
kitchen including the measures required to taken out for the safety of the kitchen. They have also
put instructions on how to maintain the dining room with the handling of the reservations as it is
the most important aspects of handling the operation. The procedure they make they have made
it an easy way so that they can maintain the operations of the business. It becomes easy for the
employees to understand and run the task they have been assigned. They change the manual from
time to time so that they can keep the environment new. They does it on a quarterly basis. Now
they are even taking the help of online platform so that they can get new ideas from it and save
the time which the whole process consumes.
Vision-
Vision of Leon restaurant is to be known best for their quality food and service within the time of
12 months. Apart from this they have to make their team ready who can support their vision by
handling their operations and serving the best food so that they can satisfy every customer who
comes and visits their dine in. They provide their food fresh and want to offer as many cuisines
possible under one roof. They also provide beverages with unique ambience which is friendly

and intrusive in a way to as many customers as possible by coordinating with their team and
communicating every aspect and requirement of the work properly. They want to train their
employees with a better vision for the restaurant and greet them by saying welcome and thank
you every time they come and go so that they feel prestigious and get repeated sales. (Klink and
Stroher, 2017)
Issues and risks that a restaurant faces-
This is the slightest issue every restaurant faces and so does Leon. To maintain a nice menu with
a appropriate amount of variety. With a price that is affordable by the audience that the
restaurant is targeting. They have set a theme which is coherent for the menu. In this industry the
quote first impression is your last impression applies that is why Leon restaurant works hard and
puts a lot of effort in satisfying the customer at every step from beginning to the end as the life of
the restaurant depends on the experience of the customer. The key to make it successful is to
make the customer visit the dine in again and again. (Dobbins and Dundon, 2017) It was difficult
for Leon to maintain their staff and management but now with time they have improved it. It is
necessary for the staff to be in contact or in touch with the customers so that order can be served
in time and they visit the place again. If they fail to satisfy them then they won’t be able to retain
them and the restaurant won’t be able to achieve the aspect of long term growth. At the time of
setting up the restaurant it was getting difficult for the Leon restaurant to decide their vibe or the
unique selling proposition. There were many options to choose from be it a bar, a romantic diner,
a bakery it is necessary to make this point so that they can tell the difference to their customers
and give them the reason to why to choose their place over their competitors. That is why Leon
came up with an original idea of making a multi cuisine restaurant at a prime area. It helps to
keep the customer remember the place for long which will help in spreading a good word of
mouth. Leon has made sure that their food connects with the people. The most common problem
is to set up a management so that a restaurant can work and generate a viable amount of profit.
Leon faced many issues then they narrowed it down to set a target to feed a this much amount of
people on a daily basis so that the materials don’t get wasted. Break down every item and
compare the cost with the profit so that the restaurant can figure out how much money are they
making on each dish. It helps the restaurant to derive the (Ayers and Odegaard, 2017) profit

margin and set up the cost of labor so that the restaurant can run their operations in an efficient
manner. In this way Leon also figure out the revenue restaurant is going to generate in weekends
and in weekdays. Many entrepreneurs who start up this goes through the problem of capital.
Owners need to have a reserved amount for maintain the business at the time of initial stage or if
any situation arises which requires to cope up with the financial aspects for the development of
the dine in. Leon knows the importance of hiring and training the suitable employees. It is
difficult for them as the rate of employee turnover is high. Leon faced a lot of problems but now
they are putting extra attention into this aspect so that they can train them, inspire them keep
them motivated and enthusiastic for the work. Leon has faced many problems in establishing a
structure that is build strongly so that it cannot be broken over some small conflicts or some
situations. (Bower, 2018)
Overcoming the issues which the restaurant faces in the market
There are many factors which could be responsible for the issues that the restaurant faces such as
sometimes the place could demand a renovation which will help in changing the environment of
the whole place up. Many entrepreneurs who are dealing in this industry avoids the aspect of
marketing. It can help in overcoming the issues which are related with the increase of revenue.
Leon can take the help of social media marketing so that they can target and influence the mind
of the young audience. On the top of that the restaurant can start a loyalty program for the people
who visit on a frequent basis which will give them additional discounts and help them retain
them for a longer period of time. The restaurant needs to set up their standards, their mission,
vision, goals so that they can target the right audience and put the right efforts. To overcome the
issue of losses restaurant has to figure out a way so that they can meet their sales goals. They
need to break down their most profitable items on the menu. So that they can figure out to sell it
more which will result in overcoming the losses instead of selling cheap products with low profit
margin which won’t result in any improvement. Another issue to overcome is to making the
experience of the customer better otherwise the business won’t achieve the aspect of long term
goals. They have to train their staff in order to satisfy their customers. The menu of the restaurant
must be easy, short and understandable. Sometimes it is too long that the customers gets confuse
and take too long too make a decision which makes them feel irritated. The menu must be

updated with the dishes they serve and the pricing must be always right otherwise it creates a bad
impression for the restaurant and people won’t feel that they are coming to dine in at a nice
place. The menu of the restaurant or their specialties must be remembered by the staff so that
they can make a appropriate suggestion to the customers when asked. Management and staff
must make sure that the restaurant needs to keep the menu stain and oil free so that it makes a
nice impression. To make the menu more attractive and increase the quantity of the order
restaurant can add photos of the food they serve which will increase the curiosity of the customer
to try out more and ultimately benefit the restaurant. These are the ways in which a restaurant
can overcome the issues or problems they face. (Thaler, Priest and Fuchs, 2016)
CONCLUSION
From the above studies it has been concluded that Leon restaurant has taken a lot of share in the
market in very less time. The reason behind it was the methods they used to improve their
efficiency and their unique selling preposition which attracted a lot of customers. This report has
helped to understand what were the risks and issues they faced and how did they overcome it.
They used very simple and successful methods to analyze where they are going wrong and those
methods have been highlighted in this report such as Pestle analysis, Porter’s five forces and
VRIO analysis which was the most important as it helped the restaurant to figure out what
resources were valuable, rare or what can be imitated. It also helped them to figure out to come
up with an original idea of an multi cuisine restaurant which serves the food at affordable rates
with a nice ambience at a prime location so that they can target more and more audience.

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