Leon's Restaurant: Evaluating Strategy, Operations, and Partnerships

This report critically evaluates Leon's Restaurant, a UK-based fast-food chain, analyzing its strategic operations and industry environment. The report begins with a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors impacting the business. It then explores emerging mega trends and applies Porter's Five Forces to assess the competitive landscape. The study summarizes the industry environment and evaluates Leon's Restaurant's resources, capabilities, and strategic operations, including a VRIN analysis. The report also assesses the extent to which operations support the restaurant's vision, covering food preparation, order taking, and financial management. Finally, it considers the impact of industry changes and the need for technological and social media adaptation for continued success.

MANAGING STRATEGY,
OPERATIONS AND
PARTNERSHIPS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1.PESTLE analysis......................................................................................................................1
2.Emerging Mega Trends............................................................................................................2
3.Strength of Porters five forces..................................................................................................2
4.Summarising of industry environment.....................................................................................3
Critical evaluation of the strategy of Leon’s Restaurant.............................................................3
Critical evaluation of operation of Leon restaurant.....................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic operations of company basically consist of those business strategies that can assist
them in achieving their goals and objectives and can also help company in increasing their
operational efficiency. Present report will lay emphasis on Leon’s restaurant. It is a fast food
restaurant chain headquartered in United Kingdom, started and founded in year 2004. Vision of
the café is to provide good food to everyone at affordable prices (Schiuma and Carlucci, 2018).
Purpose of report is to critically evaluate the environment of industry in which restaurant
operates. Study will lay emphasis on merging mega trends and how they are applicable to
restaurant trade. It will also identify resources and capabilities of organization. Evaluation of
same will also be done in report. Assignment will compare sustainable resources and capabilities
of restaurant. It will also Critically assess the extent to which the operation supports the delivery
of the vision.
MAIN BODY
1.PESTLE analysis
In the era of globalization and continuous change in trends and patterns of hospitality
industry, it has been analysed that there are various factors which are affecting business of Leon
restaurant. This includes the following:
Political factor: It consists of those factors that are related to change in political condition.
It includes trade laws, political conditions, etc. So, recession in UK has directly laid impact on
working of restaurant services and hotel industry. There has been a decline the arrival of
customers in cafeteria. Leon restaurant will be negatively affected by this as it directly impacts
their profitability aspects. As per the recent study foreign traveller has seen a downfall of up to
2.8% because of recession.
Economic factor: In this there are those factors of economic change. they consist of change
in GDP, income level, inflation and tax rate, etc. Thus, it has been analysed that after Brexit the
value of pound has fallen down and also there has been an increase in cost of imported goods
which has severely affected restaurant and hotel services (Fozer and et.al., 2017). Restaurants
have also seen an increase in the cost of labour, with the government raising the national
minimum wage to £7.20 from £6.70 earlier in the year. So Leon Restaurant needs to Bring
changes in their strategic operations so that they can adjust in changing environment.
1

Social factor: Any change in social factors are directly impact on business growth. The
factors are change in taste and preference of customers, ethics, values, etc. therefore, in recent
times as more and more people are becoming health conscious; so, their needs are changed.
Leon restaurant can get affected by it. They are fast food chain restaurant, so in order to stay in
market company needs to lay emphasis on providing healthier food to consumers.
Technological factor: this factor is related to technological advancement or change. It has
also been analysed that a greater number of restaurant are using updated and latest technology, so
Leon restaurant also needs to work on this. Like for example they are delivering meals at wrong
address for this company can ask their staff members to make use of GPS system, so that order
can be placed at correct address.
Legal factor: The factors consists of change in laws and regulation such as employment
law, healthy and safety law, etc. Restaurant are subjected to lots of rules and regulations related
to food safety and food health. They need to get insurance for their staff members because of
huge amount of risk is involved by working in restaurant. Risk like flip and fall, fire, theft so
Leon restaurant needs to lay emphasis on these aspects.
Environmental factor: the change in environment laws and CSR policies highly impact on
business operations. Hence, Leon restaurant needs to make sure that they are engaged in doing
Corporate social responsibility in order to increase their goodwill. They are engaged in valuing
natural resources as food are being served in compostable boxes (Danzig, 2018). Firm is also
motivating their consumers to say no to plastic.
2.Emerging Mega Trends
Trends that needs to be followed by Leon Restaurant includes offering healthy food to
consumers as more and more people are becoming health conscious these days. These foods
need to be provided by them at low prices and also of high quality. They can also have engaged
in shrinking down the size of their kitchen and free up more space for seating. Leon Restaurant
must also involve in analysing the food preferences of consumers.
3.Strength of Porters five forces
Porters five forces can assist restaurant in analysing competition of business and it also
help them in analysing growth opportunities
Threat of Substitute: It refers to number of substitute of products available in the
market. So, more the number of substitute more chances are there for customer to use it. It is
2

high as there are many restaurants who are engaged in serving similar high quality healthy food
at low prices, so consumer can shift to them.
Bargaining power of buyers: This refer to buyer power to influence price of products. if there
are more buyers then power is less and vice versa (Way, Davidson and White, 2019). so, it has
been analysed that consumers in this industry are demanding, they want value for their money.
So bargaining power of buyer is high. Leon restaurant need to make consumer loyalty by
providing them quality food.
Rivalry among existing competitors: It is related to level of competition within the
industry. so, large number of companies means stiff competition. Thus, competitive rivalry is
also high as so many restaurants are opening and providing high quality healthy food. So, Leon
restaurant needs to work on their strategic operations
Bargaining power of suppliers: It refer to supplier power to influence price of products.
if there are more suppliers then power is less and vice versa. In industry the threat related to
bargaining power of supplier is average, as there are so many suppliers from where Leon
restaurant can take their raw material from.
Threat of new entry: This is related to threat of new businesses to enter in the industry.
Thus, the main barrier to entry in restaurant is initial cost of investment, so threat related to this
low as it requires huge funds and resources to enter (Hussein and Muchemi, 2019).
4.Summarising of industry environment
Succeeding in Industry: In order to succeed in hospitality industry, it is very essential for
Leon restaurant to follow mega trends. They also need to provide high quality food and provide
value to their consumers. Also, it is very necessary for them to make use of updated technology.
Industry environment likely to change in future: It has been analysed that restaurant will
see a rise in online ordering. In order to grow there will be a requirement to be updated on all
social media platforms, so that feedback of consumers can be addressed firmly and easily
through it (Chen and Cheng, 2019).
Critical evaluation of the strategy of Leon’s Restaurant
1. Identification of organizations resources: Leon restaurant has highly skilled staff who are
engaged in providing high quality services to consumers. Company is also engaged in treating
their employees fairly, so that employee turnover can be reduced. Firm is involved in reducing
3

use of plastic material and making their consumers use biodegradable paper bags. They have
consumer loyalty and also a well-furnished interior that can easily attract consumers.
2. Identify capabilities of organisation- It refers to the potential capability of Leon restaurant.
the capabilities of restaurant is its disruptive model that allows them to expand in other markets.
Moreover, they provide fresh cooked food that helps in making attracting customers. along with
it, design strategy of branding can enable in creating a strong brand image in European market.
With use of images, ads, stickers, etc. (Ojha and Pandey, 2017) restaurant can attract more
customers. in addition to it, Leon restaurant can add new food items in menu as well. By this
more profit can be generated.
3. Resources and capabilities of Leon restaurant
VRIN analysis is technique to determine organisation resources and capabilities. Also, it
gives insight on internal resources and to how much business is capable to expand in other
market and gain competitive advantage. besides, VRIN is useful in evaluating whether resources
are enough to sustain for long term or not.
Valuable
The food and services of Leon restaurant is valuable as it provides high customer satisfaction and
retaining of customers. Moreover, it allows restaurant to generate value of their services in UK.
Furthermore, restaurant low cost and premium food services enable in distinguishing it from
another restaurant and making it unique.
Rare
As discussed above, healthy food of Leon restaurant is quite costly than others. Also, the
resources acquired by them allow in building strong brand image With this they are able to
generate high profits.
Alongside, restaurant staff is rare as they are highly qualified and skilled. They treat each guest
in fair and equal way. moreover, interior design and environment is different from other. It
allows guest to visit restaurant again and again (Cerruti, Mena and Tavoletti, 2016).
Imitable
The service of Leon restaurant are imitable as they conduct many activities and programs to
attract them. For example- conducting yoga, etc. which is usually done in another restaurant.
It is observed that Leon restaurant design strategy and food items are imitable as it is easily
copied by competitors.
4

Staff of Leon restaurant can be easily imitated because they are also given similar training and
skills as others. However, healthy food items are provided by many competitors who are
operating in UK.
Non sustainable
As evaluated the operational resources of Leon restaurant can not substituted by any other one.
This is because it enables in offering high quality service.
The trade secrets of restaurant can not be substituted as they contain ingredients used in cooking
healthy foods.
4. Compare sustainable resources and capabilities within industry
By comparing the resources and capabilities of Leon restaurant it is stated that there are
certain factors which is affecting sustainability (Büyüközkan, Güleryüz and Karpak, 2017). The
resources are staff that must be trained with high skills. this is because with change in social
trends they must know how to provide services to them. but restaurant is not having capable
staff. thus, it can impact on their growth. besides that, as customer are becoming health
conscious so restaurant possess capability of offering healthy food to them. for this they are
having resources like finance, machine, etc. so, it will be easy for them to utilise it in effective
way.
Critical evaluation of operation of Leon restaurant
1. Operation of Leon restaurant
there are different types of operations which is performed by restaurants. It extent from
preparing food, taking order, delivering it and many more. These operations enable in offering
high quality services to customers. Similarly, in Leon restaurant there are various operations
performed. They are preparing food, cleaning, reporting, etc. Here, staff takes order to guest that
arrive in restaurant. In food preparation there are various ways in which food is cooked such as
grilled, steamed, roasted, etc. there is accounting operation where daily transactions are recorded
and financial records are maintained (Spoann, Fujiwara and Yim, 2019). Furthermore,
inventory and raw materials costs are maintained. also, sales and profits are calculated. In
addition to it, purchasing raw material operation is of buying and keeping track of stock and
inventory. Moreover, in cleanliness operation waiter and staff ensure that tables are cleaned.
Also, it includes cleaning of kitchen, tables cloth, etc. In training operation staff is trained for
various business function. The training is given in different way and using tools and techniques.
5

2. Vision of Leon restaurant
The vision is to make it easy for everyone to eat food. here, Leon restaurant is focusing
on providing food to each and every one in easier way. However, food refers to breakfast, lunch
and dinner.
3. How operation supports in vision
It is analysed that there are different operations performed in Leon restaurant and each
one is assigned different goals and objectives. these all overall help in attaining vision. For
instance, preparing of healthy food and offering them to guest help in fulfilling their needs.
similarly, taking order from guest gives insight on their needs. likewise, in cleanliness operation
many activities are performed like cleaning table, kitchen, utensils, keeping restaurant neat and
clean, etc. Besides that, customer service is also an operation where various services are offered
to them. In this their feedback is taken, after sales services is offered and many more.
4. Extent to which operation is sustainable
The operations of Leon restaurant are not that much sustainable through which they are
able to survive for long term. in preparing of food it is required to implement new technology so
that waste is reduced (Li, Roberts and Tan, 2016). also, there is need to change operational
process so that efficiency is increased. Similarly, in accounting operation new system needs to be
installed so that records are automatically updated. This will enable in working in advance way
of keeping accounts and maintaining records. so, any update in technology will make it difficult
for Leon restaurant to manage account. in similar way, customer service is not as effective.
However, it has become challenge for many restaurants as they are not able to maintain customer
service quality level. It has resulted in decrease in sales and profits. thus, present restaurant
operation does not offer variety of services.
CONCLUSION
From above, it is summarised that there are several external factors which is impacting on
Leon restaurant growth and expansion. It consists of political, legal, social, etc. Alongside, it is
identified that competitive rivalry is high in market but threat of new entry is low. Also, power of
supplier is average whereas of buyer it is high. Besides, resources of Leon restaurant are HR,
finance, etc. and its capabilities are to expand in other market and include new type of menu
items in it. In VRIN the valuable is food and services, rare include healthy food and their highly
skilled staff, imitable is service, design strategy and food items and non sustainable resources are
6

operational resources and trade secrets of Leon restaurant. Moreover, there are various
operations performed within restaurant such as cooking, customer service, cleaning, etc. These
all help in accomplishing vision.
7

REFERENCES
Books and Journals
Büyüközkan, G., Güleryüz, S. and Karpak, B., 2017. A new combined IF-DEMATEL and IF-
ANP approach for CRM partner evaluation. International Journal of Production
Economics, 191, pp.194-206.
Cerruti, C., Mena, C. and Tavoletti, E., 2016. Characterizing agile supply partnerships in the
fashion industry. International Journal of Operations & Production Management.
Chen, Y.G. and Cheng, J.N., 2019. A Study Investigating Teachers Competitiveness Michael
Porters Five Forces Model as Theoretical Basis. Academy of Educational Leadership
Journal.
Danzig, R., 2018. Alternative Future Scenarios of Agriculture In Florida: PESTLE analysis to
assess the possible alternative future scenarios for Florida agriculture within the coming
30 years.
Fozer, D. and et.al., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production. 147. pp.75-85.
Hussein, S.S. and Muchemi, A., 2019. Michael Porters five forces on performance of savings
and credit cooperative societies in Nairobi City County, Kenya. International Academic
Journal of Human Resource and Business Administration. 3(7). pp.14-35.
Li, X., Roberts, J. and Tan, H., 2016. Management of cultural differences under various forms of
China–UK higher education strategic alliances. Studies in Higher Education, 41(4),
pp.774-798.
Ojha, S. and Pandey, I.M., 2017. Management and financing of e-Government projects in India:
Does financing strategy add value?. IIMB management review, 29(2), pp.90-108.
Schiuma, G. and Carlucci, D., 2018. Managing strategic partnerships with universities in
innovation ecosystems: A research agenda. Journal of Open Innovation: Technology,
Market, and Complexity, 4(3), p.25.
Spoann, V., Fujiwara, T. and Yim, M., 2019. Assessment of public–private partnership in
municipal solid waste management in Phnom Penh, Cambodia. Sustainability, 11(5),
p.1228.
Way, P.L., Davidson, P.M. and White, M., 2019. The pursuit of purposeful partnerships-making
a health matrix successful. Asia-Pacific Journal of Health Management, 14(1), pp.85-
85.
8