Leon's Restaurant: Operations and Strategic Analysis Report

This report provides a comprehensive strategic analysis of Leon's Restaurant, examining its environment using PESTLE and Porter's Five Forces models. It identifies key mega-trends in the restaurant industry and evaluates Leon's strategy, resources, and capabilities through VRIN analysis. The report assesses the restaurant's operations, including its vision and sustainability, offering insights into its competitive advantages and areas for improvement. The analysis covers critical aspects such as human resources, physical resources, intellectual resources, food quality, infrastructure, seating capacity, and professional chef capabilities. The report also explores how the restaurant's environment is likely to change in the future, providing a detailed evaluation of its strategic position and operational effectiveness.

Managing Strategy, Operations
and Partnerships

Table of Contents
INTRODUCTION...........................................................................................................................4
Critical evaluation of environment of the restaurant industry.........................................................4
PESTLE Analysis........................................................................................................................4
Emerging Mega trends in the industry........................................................................................5
Strengths of Porter's five forces..................................................................................................5
Identify what it take to succeed in the industry..........................................................................6
Identify how environment of the industry is likely to change in future.....................................6
Critical evaluation of the strategy of Leon's Restaurant .................................................................6
Identify resources of the organisation.........................................................................................6
Identify capabilities of the organisation......................................................................................6
Evaluate the resources and capabilities (VRIN).........................................................................7
Compare sustainable resources and capabilities ........................................................................8
Critical evaluation of the operations of Leon's Restaurant .............................................................8
On he basis of the information gathered the analysis of the operations of the Leon's restaurant
.....................................................................................................................................................8
Vision of the Leon Restaurant.....................................................................................................8
Critical assess of the extend to which operations supports the delivery of the vision................8
Evaluation of the extend to which the operation is sustainable..................................................9
CONCLUSION................................................................................................................................9
Appendices ....................................................................................................................................11
REFERENCES..............................................................................................................................15
......................................................................................................................................................15
·

·INTRODUCTION
Organisations are established with the aim to earn profit by ensuring their survival. For
which they have to formulate various strategy, establish partnerships with various suppliers,
dealers etc. They need to manage them effectively which helps the organisation to manage their
operations that results into creation of effective team. For this report, the Leon's Restaurant is
taken into consideration which offers fast food. The vision of the organisation is about attaining
of competitive advantage in market through bring changes in accordance to the internal and
external factors. In this report the environment of the industry will be analysed on the basis of
various models such as PESTLE, five force model. Also the resources of the organisation, their
capabilities are analysed with the help of VRIN model. The operations of the organisation are
evaluated with the help of various resources held by them.
·Critical evaluation of environment of the restaurant industry
·PESTLE Analysis
The organisation need to understand the impact of various external factors which help
them to identify the opportunities for them which they can grab and the threats whose impact
they have to minimise. The Pestle analysis for the Leon Restaurant is conducted.
·Political factors : The political stability in UK has positive impact on the restaurant as they are
complying with all existing policies and as their will not be any change in the policies in the near
future as the government will not change the company will not get affected.
·Economic factors : It is expected that the corporate tax rate will be decreased by the
government of UK. So this decrease in corporate tax will increase the profitability of the
restaurant and it will facilitate the Leon's Restaurant to innovate their services as they will be left
will more funds.
·Social factors : The people are becoming more health conscious which is by the demand for
healthy food is increasing and the restaurant is also providing a wide variety of healthy food
products. Due to this reason the social factors will have favourable impact on the Leon's
restaurant.
·Technological factors : To meet up with the technological requirements the company has been
adopting various innovation in their services. They have their website which contain all the
details and the information of their food products that they offer along with that details of

various recreational services are provided which can helps them to easily attract youth. Due to
this they have positive impact of this factor even they get competitive advantage of this.
·Environmental factors : Food safety policies affects their operations as it will increase their
cost of operation in process of their adherence.
·Legal factors : Various quality standards which are imposed by the law are meet by the Leon's
restaurant due to which it will have no influence until they are changed.
·Emerging Mega trends in the industry
With the growing demands of the customers the restaurant industry has been facing
significant changes in the industry. Due to such trends the organisations in the industry need to
comply with the trends to ensure their survival. Some of such mega trends are given below
which are effectively adopted by the Leon's Restaurant are given below :
·Plant based dining : The customers in UK have started preferring vegetarian food which offers
them heath and fitness.
·Tacking Food based : The restaurants have started reducing the wastage of food and has
adopted various environment friendly products such as they have started removing plastic
straws.
·Online delivery : With the growing technology the food and restaurant industry has adopted
this trend by making their food available to the customers at their place.
·Social Media : The people are so often operates social media platform such as Instagram and
various other similar application. So the Leon's restaurant has been focussing on such trend by
providing various recipes which helps them to make their customers in touch with them.
·Advance Technology : Leon's restaurant has been adopted various advance technology which
helps them to serve their customers satisfactorily. Various such services are Robot are replacing
waiters etc. they are enough to attract more of customers.
The Leon's restaurant has applied various such trends as they offer a wide variety of gluten free
fast food which is healthy along with this they offer various plant based food. The restaurant
offers an option of home delivery to the customers through their own website or from various
other websites with whom they have tied up (Warner and Sullivan, 2017).

l壱Strengths of Porter's five forces
The five force model helps the organisation to identify the strategic decisions which will
help the restaurant industry to analyse various competitive forces. The strengths of various
forces are:
·Threats of substitutes: This force of the five force model helps the organisation to understand
the impact of the substitute on their goods. The threats of substitute have negative impact on the
Leon's restaurant as there are so many restaurants which are offering healthy fast foods options.
·Threats of entry: This force helps the organisation to understand the impact of the new entrant
on the business of the existing organisation. The threat of the substitute is also high in the
restaurant industry as it is easy to enter into this market as there is no entry barriers imposed.
·Buyer power: This force helps the organisation to understand the influence of the buyers
conditions on their business operations. The bargaining powers in restaurant industry is high but
for Leon's it is moderate as they provide innovative services along with products.
·Powers of suppliers: This force of the five force model helps the organisation to understand
the extend to which the suppliers can influence the operations of the organisation. The powers of
the suppliers in restaurant industry in moderate and for the Leon's is moderate only in case if
they are exclusive suppliers otherwise they have low impact.
·Industry Rivalry: It is one of the most important force which an organisation need to analyse
as the decision of an organisation are dependent upon the actions of the competitors. This force
helps to understand the impact of the competitors on the Leon's which has high influence.
·Identify what it takes to succeed in the industry
The analysis is done for the restaurant which will help them to identify the changes
which are required by them to succeed in the industry. They mega trends are analysed on the
basis of which they will bring changes in their organisation such as they need to follow various
food wastage management systems in their organisation etc.
l壱Identify how environment of the industry is likely to change in future
Leon's restaurant is successful as they have been following all the compliances all the
acts and the regulations. The supply chain of the restaurant is strong enough which is why
suppliers have less bargaining powers (Thompson, Strickland and Gamble, 2015). Also they

have adopted various mega trends such as online delivery, planting food and many more this
provides them various competitive advantage.
·Critical evaluation of the strategy of Leon's Restaurant
·Identify resources of the organisation
The restaurant uses various resources which helps them to be efficient as well as
effective. In the restaurant industry the organisation need to have couple of resources which can
help them to attract more of customers and such resources could be their interior, the staff of the
restaurant, the name and logo of the restaurant etc. For the organisations to used different
resources to achieve their goals. Major resources which are used by the Leon's Restaurant are
given below:
Human resources: This is one of the important resources which is required at the
restaurants. To serve the customer well the restaurant need to have polite and cooperative staff
which can understand the customers. Leon's provides various trainings to their staff which make
them competent to serve their customers. Such trainings are crucial for them as they are the one
who serve the customers and satisfies them.
Physical resources: Physical resources are the one which becomes the evidence for the
services which are provided to the customers. They are associated with the basic resources which
are crucial for the organisation such as their infrastructure, storage facilities, location etc. which
helps them to attract the customers.
Intellectual Resources: This restaurant have various intellectual resources which give
them competitive advantages such as recipes, copyrights, patents, customers information (Ross,
2017).
l壱Identify capabilities of the organisation
The organisation has to analyse their capabilities which helps them to develop various
strategies for them that helps them in their operations. Also on the basis of the capabilities the
organisation strives to achieve competitive advantage. Some of the capabilities of the Leon's
restaurant:
·Food quality: This capability of the organisation is such which helps them to attract the
customers as they provide healthy food which is of better quality. They use organic ingredients
in their food which improves the taste and quality that can satisfy the customers easily.

·Infrastructure: The infrastructure of the restaurant is very attractive which is considered a
major capability as their interior, décor is such which attracts customers to sit there for a longer
period of time. Also they have a music system, a separate space for display of games etc. which
gives an amazing experience to the customers.
·Seating Capacity: The seating capacity also adds to the capability to the organisation as they
can provide their services to many customers at a time. Also the space is enough to conduct
various parties and get together for at least 100 people. Along with this they have separate zones
for the people who prefer drink and for those who does not.
·Professional Chef: The Professional chef is the biggest capability of the Leon's restaurant as
they serves various innovative dishes to the customers which helps them to be loyal as they taste
of the food that they prepare is authentic. Also this capability of the Leon's helps them to take
the competitive advantage.
·Evaluate the resources and capabilities (VRIN)
VRIN framework helps the organisation to analyse their resources and the capabilities on
the basis of which they can identify their strengths and weaknesses. The model helps the
organisation to take the sustainable competitive advantage by utilising their resources as per their
capabilities. The VRIN analysis for Leon's restaurant is given below which will help to
understand the advantages they can take from their existing resources.
ResourcesValuableRareImitableNon sustainableInfrastructureYes---Seating capacities
YesYes--Food range/ qualityYesYesYes-Professional ChefYesYesYesYesAnalysis of resources of
Leon's restaurant are given below: -
Valuable- There are various resources are present in the organisation which leads
restaurant manager to complete their work with more efficiency. In context of the Leon's
restaurant the resources used by them are very effective. It undertakes high developed
infrastructure, food range, seating capabilities and many more that represent the inferior qualities
of services and food.
Rare- In this part all those resources are considers by the organisation which are related
with competitors. Moreover, in context of Leon's restaurant resources used by them are rare and
in context of the infrastructure. It is easy for them to attract large number of customer’s in
effective manner (Nurmala, Leeuw and Dullaert, 2017).

Imitable- This refers to all those resources that are not copy by the other rivals
organisation. In the context of Leon's restaurant. Some resources of the organisation are easy to
copy like seating capabilities, infrastructure and other resources but the services as well as food
quality is not copied by the organisation.
Non sustainable- This refers to the resources that are not replaceable by the
organisation. As it is difficult to formulated similar strategies for organisation. In the context of
respective restaurant some other resources that are need to be manage relates with variety of
foods and its quality. Further, organisation also has resources that are not able to be replaced
such as chef and positive environment.
l壱Compare sustainable resources and capabilities
The Leon's restaurant has some resources which they utilise effectively as per their
capabilities. The customers expect that the mega trends are adopted by the restaurants so that
they can experience the best without switching. So for this the Leon's has effectively developed
an infrastructure which helps them to attract the customers (Ayers, and Odegaard, 2017). Along
with that they offer seating space which is rare but the capabilities of the chef are such which
offers them the greatest advantage as they prepare innovative and healthy dishes for the
customers.
·Critical evaluation of the operations of Leon's Restaurant
·On the basis of the information gathered the analysis of the operations of the Leon's restaurant
On the basis of the information so collected regarding the capabilities and the resources
of the restaurant their operations are analysed. They have various operations which supports
them in satisfying their customer’s such as:
·Preparation of the food: The Restaurant has a well-established kitchen in which the chefs of
the Leon restaurant prepared a wide variety of healthy food. They have a cellular system which
the help of which the chef receives the order of the customers and accordingly they prepare the
food without any delays.
·Customer Service: This is one of the most of the important operation of the restaurant as they
have to cater the customers satisfactorily. They train their employees in such a manner that they
can effectively communicate to the customers and make them understand the benefits of various

options in their menu. With the help of this operation they strive to achieve the competitive
advantage by making their customers loyal to their restaurant and their services (Gong, 2015).
·Cleaning and Hygiene : This is very crucial operation in the restaurant as the customers are
becoming so very possessive for the cleaning and the hygiene. Due to this the restaurant has to
recruit people which can help them in providing clean and healthy ambience to the customers.
Leon restaurant has various people who are working with them that focusses on the hygiene and
the cleaning of the floor, cleaning of the table, the ambience etc.
·Procurement of the raw material : For a restaurant industry this function is so very crucial as
they have to procure various material which are used by them in their dishes such as fruits,
vegetables, spices and various other ingredients. Leon restaurant has their personnel who ensures
that all the material are readily available to the customers so that their services does not get
interrupted.
·Vision of the Leon Restaurant
The vision with which they have started their business was that they wanted to prove that
it is possible to serve better quality food which is good in taste and does good to you. The aim of
the restaurant is to make good food easily available to the customers in all the major cities of the
world.
l壱Critical assess of the extent to which operations supports the delivery of the vision
The vision of the Leon's restaurant is to provide healthy fast food to the customers which
is of better quality. The operations of the restaurant work in the same direction which offers
augmented services to the customers and the chefs provides the innovative dishes which helps
them to be consistent towards their vision. The cleaning and the hygiene operation of the Leon
restaurant contributes to the vision of the company as it helps them to provides healthy and clean
ambience to the customers.
l壱Evaluation of the extent to which the operation is sustainable
The operations of the Leon's Restaurant are sustainable which helps them to serve their
customers better. Also with their operations their employees are able to identify the taste and
preferences of the customers and their expectations. In accordance with the identification of the
taste the chefs modify the dishes which make their customer happy and loyal (Clott and
Hartman, 2016).

·CONCLUSION
It is concluded from the above report that it is important for the restaurant to understand
the changes and their impact on the operations of the organisation. The government influence the
restaurant industry by applying various laws, regulations and standards for the quality of the
food and the safety of the food. With the help of five force analysis it is identified that the risk of
new entrants is high as the industry is not regulated by any entry barrier. Also the threat of
competitors is high which affects the strategy of the restaurant but they have lesser bargaining
power of both suppliers and buyers. The capabilities are efficient enough to meet the visions of
the organisation as their resources are properly utilised.
·

BasisReferencesPESTLE ANALYSIS:
·Political factors: Political stability in UK provides a viable business opportunity for the
restaurants which will either have positive or negative impact on Leon's Restaurant and on the
entire industry. Due to political stability major changes in policies will not take place which will
not affect the business of the restaurant in near future.
·Economic factors: The fiscal policies of the economy affect the business of the restaurants as
they have impact the tax rates. The corporate tax rate will be 18% from April 2020 which will
increase the profitability of the company as the current tax rate is 19%. The opportunity which is
present in industry is about earning with high profit margin which allows the organisation to be
innovative in their offerings that allows to attract health conscious clients.
·Social factors: The factors include various demographic factors, attitude of employees, social
structure etc. There is increasing demand of healthy food as people are becoming health
conscious also there are large number of youngsters in UK as the immigration is high because of
educational purpose. This will have positive impact on the Leon's Restaurant as it will increase
demand for their healthy food options.
·Technological factors: The technological factors help the company in taking competitive
advantage. They have to adapt such technological changes to make their business competent. It
is easy to adopt in UK as the environment is highly technological friendly. Various such
technological factors in restaurant industry are IT technology for publicity, websites on which
they can give details about menu which can easily attract the crowd. This will help the Leon's
restaurant to attract more of people.
·Environmental factors: The operations of the organisation have impact on the environment
which is why various laws are imposed by the government in order to minimise such impact.
Various regulations such as disposal of waste, food waste management policies etc. affects the
operations of the restaurants. This will have impact on the organisation as it will increase their
cost.

·Legal factors: The judiciary system of the economy imposes various laws on the restaurants
which can have both positive and negative impact various government agencies are operating in
UK which ensures the quality and supply of various food products. For this they have imposed
rules and regulations which controls supply and provisions of food. The one in this regard is
about food and safety standards that obligates the restaurant to provide optimum in nature which
have no adverse impact otherwise they have to pay fine in future.
·Political factors affecting the UK, 2019. [online] Available through:
<https://www.howandwhat.net/pestel-analysis-uk/>
·Economic factors affecting the UK, 2019. [online] Available through: <
https://www.howandwhat.net/pestel-analysis-uk/>
·Social factors affecting the UK, 2019. [online] Available through:
<https://www.howandwhat.net/pestel-analysis-uk/>

·Technological factors affecting the UK, 2019. [online] Available through:
<https://www.howandwhat.net/pestel-analysis-uk/>
·Environmental factors affecting the UK, 2019. [online] Available through:
<https://www.howandwhat.net/pestel-analysis-uk/>
·Legal factors affecting the UK, 2019. [online] Available through:
<https://www.howandwhat.net/pestel-analysis-uk/>
PORTER'S FIVE FORCE MODEL
·Threats of substitutes: This force helps to identify the buyer’s propensity to substitute the
goods on the basis of the relative prices of the goods and their performances. In the restaurant

industry, threat of substitute is high as there are large number of restaurants in UK which are
offering fast food. It becomes easy for the customers to easily make comparison among the
substitute goods as they are of similar nature. The threat can be reduced by the restaurant by
offering various augmented services to the customers rather than just focussing on the products
that they are offering.
·Threats of entry: With the help of this force they can identify the level of competition which
can arise from the new entrants. In this industry the entry is easy as there are least entry barriers
which can directly affect the operations of the industry. The Leon's restaurant also has significant
threat but its impact can be reduced by innovating their operations and the services there are
offering such as they can make their communication more effective. The focus of this restaurant
should be on building and managing the customer’s relations as this is the only force which can
ensure their survival.
·Buyer power: Buyers are becoming more demanding that is because of changes in taste and
preference that has direct influence on the businesses. In the restaurant industry they have to
keep a check on this force as if the restaurant does not modify and update their products and
services it will become difficult for them to survive as the buyers can easily switch to the
competitor. The Leon's restaurant can reduce the impact of such force by introducing various
products time to time and also by innovating existing products. This will help them to make their
customers loyal to the products and their services. Also they need to focus on the feedbacks that
are provided by the buyers.
·Powers of suppliers: The suppliers of the organisations play a significant role in the operations
of the organisation as they supplies the material which helps in providing the final goods to the
customers. The bargaining power of the suppliers in the restaurant industry is very high as there
are large number of suppliers available for the basic products such as vegetables, groceries etc.
But the problem they face is with the suppliers who supplies some specific products. For Leon's
restaurant the bargaining powers of suppliers is not much as they have efficient supply chain.
The restaurant has been experimenting on various innovation which is why they have to club
with various new suppliers which exclusively provides few material, they affect their operation
as they do not purchase in bulk from them this increases their overall cost.

·Industry Rivalry: The business is most affected by the strategies and the policies of the
competitors as the businesses have to reduce their prices as per the policies of the competitors.
The Leon's has this strong force which can affect their operations but they can reduce its impact
by creating differentiation in the products that they offers to the customers.
·Threats of Substitute Products, 2019. [online] Available
through :<http://fernfortuniversity.com/term-papers/porter5/lse/468-restaurant-group-plc.php>
·Threats of New Entrants, 2019. [online] Available through :<http://fernfortuniversity.com/term-
papers/porter5/lse/468-restaurant-group-plc.php>
·Bargaining Power of Buyers, 2019. [online] Available
through :<http://fernfortuniversity.com/term-papers/porter5/lse/468-restaurant-group-plc.php>

·Bargaining Power of Suppliers, 2019. [online] Available
through :<http://fernfortuniversity.com/term-papers/porter5/lse/468-restaurant-group-plc.php>

·Rivalry among the Existing Competitors, 2019. [online] Available
through:<http://fernfortuniversity.com/term-papers/porter5/lse/468-
restaurant-group-plc.php>
·REFERENCES
Books and Journals
Ayers, J. B. and Odegaard, M. A., 2017. Retail supply chain management. CRC Press.
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.
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.
Ross, J. E., 2017. Total quality management: Text, cases, and readings. Routledge.
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.
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