University Report: Managerial Problem Solving at Red Rooster

This report examines the managerial problem-solving strategies employed by Red Rooster, a prominent Australian fast-food chain facing financial difficulties. The analysis identifies key challenges, including high prices, declining customer loyalty, and the need for healthier food options. The report proposes solutions like market penetration pricing and the introduction of organic and nutritional products to enhance customer satisfaction and increase sales. An implementation plan is outlined, emphasizing the importance of team collaboration, product quality improvements, and regular progress assessments. The rationale behind these solutions is discussed, highlighting their potential to increase market share, attract customers, and ultimately improve Red Rooster's financial performance and brand loyalty. The report provides a comprehensive overview of the business challenges faced by Red Rooster and proposes actionable strategies to ensure its long-term success in the competitive market.

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Managerial Problem Solving
Name of the University
Name of the Student
Author Note

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Executive summary
The report highlights the usefulness management in the organisation for running the business
effectively. In this context, the researcher has highlighted the challenges in the business of
Red Rooster, which is a popular fast food manufacturing firm of Australia. The organisation
has been suffering from tremendous financial crisis in the business and hence, for improving
the situation, the management has proposed two important steps. Based on the discussion, it
can be anticipated that the organisation will be capable to deal with the challenges in the
future and hence, the financial position of the firm will be improved. In a nutshell, under the
leadership of the management, Red Rooster will get success in the business.

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Table of Contents
Introduction................................................................................................................................4
Brief overview of the company..................................................................................................4
Challenge faced by Red Rooster................................................................................................4
Discuss the problem’s location and the implication on business...............................................5
Address the problem..................................................................................................................6
Solution and implementation plan.............................................................................................6
Implementation plan...............................................................................................................7
Rationale behind the solution and the implementation plan......................................................8
Tested assumptions....................................................................................................................8
Conclusion................................................................................................................................10
Bilbiography.............................................................................................................................11

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Introduction
Managerial problem solving behaviour is beneficial to reach to the desired state for running
the business by improving the current state as well as by omitting the challenges in the
business. The management of the organisation has strong and positive contribution in the
business to successfully run its operation. Apart from influencing the employees and their
performance level, the management is also responsible to develop a strong budget plan for
maintaining the financial position of the business. This report shed the lights on the
importance of problem solving nature of the management in minimising the challenges of an
Australian fast food manufacturing firm, Red Rooster.
Brief overview of the company
Red Rooster is a popular fast food manufacturing firm of Australia, which was established in
the year 1972. The organisation has specialisation in the selling of roast chicken, wraps,
salads, burgers etc. The Headquarter of the company is in New South Wales, Australia.
Approximately 7500 employees are associated with the Australian food manufacturing firm.
The organisation authority assures the customers that they would be able to enjoy fresh
chicken and the other items. Based on this, it can be stated that freshness of food is at the
heart of the business and hence, the customers are willing to purchase and have the food of
Red Rooster.
Challenge faced by Red Rooster
Though, the organisation tries to serve the fresh quality and tasty food, however, the
organisation has been suffering from the financial challenge. Red Rooster is at the verge of
Bankruptcy. More specifically, it can be mentioned that Red Rooster unusually charges very
higher price of the products, which are available in much lower prices in the local
supermarket of Australia. As per the human psychology, most the customers are looking for
the purchasing of affordable prices products, and hence, since Red Rooster charges higher
prices on the items, therefore, with the passage of time the number of customers of the
organisation has been declining gradually. Very few customers are willing to pay high for
getting of almost similar kind of items from the organisation. It is noted that in case of highly

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competitive market, the organisation does not need to charge higher prices for purchasing a
product. It would minimise the customers’ willingness to consume from Red Rooster over the
affordable super markets. It directly affects the sales of the firm and hence, Red Rooster has
been suffering from huge financial loss in its business. Apart from the financial loss, the
customer loyalty program of Red Rooster has been affected. Based on the discussion, it can
be anticipated that if the trend continues then the franchises of the company would start to be
collapsed. The employees of the organisation also infer that the organisation has been
practicing poor food delivery planning. As a result, Red Rooster has been faced the cash flow
issues as well as the in-store sales problem.
Apart from the situation like Bankruptcy, Red Rooster also suffers from another challenge for
selling of unhealthy and cheap fast food. Though the quality of the Chicken that is the quality
of raw materials is fresh, however, the final prepared foods contain lots of oil and unhygienic
factors. With the passage of time, the food pattern of the Aussies has been changed and they
mostly prefer to have the nutritional and healthy food. For instance, one quarter of Aussie
children have been suffering from the disease like obesity and hence, overweight of the
children is the prime issue of changing the food habit. In this context, doctors also suggest to
have healthy food instead of the junk food. Consequently, demand for the fried chicken,
burgers, chicken wings, wraps of Red Rooster has been declining over the times and hence, it
directly affects the sales percentage of the company.
Discuss the problem’s location and the implication on business
As per the identified challenges, bankruptcy in the business occurs due to the excess falling
of sales of the business. The customers of Red Rooster would not prefer to consume the
products anymore by paying of higher money compared to the other local supermarket of
Australia. In addition, selling of junk, unhealthy and oily food also affects negatively the
willingness of the customers to shop more from the organisation. Therefore, based on the
discussion, it can be stated that both the identified business challenges mainly occur in the
mind of the customers and hence, their satisfaction level have been affected. More
specifically, since the organisation has been operated only in the domestic market, therefore,
the issues during running the business occur in the mind of the Australian consumers due to
their dissatisfaction with the organisational services.

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Customers are the primary stakeholders of a company as well as for running a business
flawlessly. Since, the customers are dissatisfied with its pricing strategy and also its product
quality of the final goods; therefore, they show less interest to purchase the items from Red
Rooster. It directly affects the financial position of the organisation since, over the years,
being dissatisfied, purchasing from Red Roosted have been declined by the customers and
consequently, it has been started to affect the sales percentage of the business.
Address the problem
In order to improve the financial position as well as for getting rid of the situation like
bankruptcy in the business, the management of Red Rooster requires to take necessary steps
and needs to address the identified problems. It is noted that under the proper leadership and
by taking of proper decision, Red Rooster can improve its situation and the business
performance in the Australian market. More specially, the managers would need to take the
decisions for the business in such a sway, that the organisation can start to improve its
financial position and hence, the net profitability earning will be increased. For instance, in
this context it can be said that the managers of the organisations target to meet the financial
goal not only by increasing the price level of the products, but also by satisfying the
customers more, so that they like to increase their purchases from that particular organisation.
In the following section, the researcher has highlighted in a detailed manner, how the
manager of Red Rooster would be capable to solve the challenges in the business. In this
context, the implementation plan and its effectiveness in the business would be analysed.
Solution and implementation plan
The managers of the organisations designs the business planning by considering the
loopholes in its operational and performance level and target to solve it for successfully run
the business. As per the above discussion, Red Rooster has been suffering from two identified
organisational challenges, which would be solved under the proper leadership of the manager
of the organisation. The proposed solutions for addressing the identified challenges are going
to be discussed in the following:
Solution 1: Based on the discussion, it can be understood that Red Rooster had been
implemented ‘premium pricing policy’ on the products since they had faith that they were

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selling the most optimum and the greatest quality of food. Though the income statement,
consumption expenditure of Australia has been growing, however, as per the human
psychology, the customers are always looking for and purchase the same quality products in
terms of lower prices. The customers can avail and purchase the similar quality of goods from
the local supermarkets. In order to solve the problem and for maintaining the net profitability
earning, the management of Red Roosted requires to charge market penetration pricing
strategy. As per the penetration pricing strategy, the organisation sells the products in the
lowest price compared to the customers. In this respect, it can be argued that the net
profitability earning would be decreased. Though, the net profitability earning of the business
will be decreased in the short run, however, the organisation will get opportunity to increase
the percentage in the long run and hence, Red Rooster can survive the business for long
period of time. More specifically, by charging of lowest prices, the manager targets to attract
large percentage of customers to it over the rival firms and hence, the sales of the business
can be successfully increased. Therefore, it can be inferred that by increasing the sales, the
firms can increase the net profitability percentage. Apart from this, the manager of Red
Rooster target to minimise the excessive operational cost. For instance, the organisation can
minimise its unnecessary cost of marketing for lowering down the overall cost for running the
business.
Solution 2: In order to maximise the satisfaction level as well as for meeting the needs of the
customers, the manager has planned to sell organic and nutritional products apart from the
specialised roasted chicken, burgers and wraps. Basically, the availability of varieties of food
is required to be increased to grab the attention as well as for increasing the satisfaction level
of the several types of customers. It is beneficial to make the consumers happy with the
diversified food range. Consequently, it can be predicted that the sales of the firm will be
increased sharply and the organisation can deal with the situation like ‘bankruptcy’.
Implementation plan
In order to execute the solution program in the business successfully as per the proposal, the
manager of Red Rooster instructs the team leaders of sales, marketing and the operational
team to work accordingly, so that the objectives of the business can be achieved.
Consequently, the team leaders influence the staff towards their works for boosting up their
performance. In addition, the quality of the newly manufactured products will be improved.

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Furthermore, for roasting or for frying purpose, olive oil will be used. It will help to keep the
taste similar instead of degrading the quality of the food. On the other hand, the manager of
Red Rooster has decided to conduct a team meeting once in two months for determining the
progress in the operational process. As a result, the manager can identify whether the cost of
marketing would minimise or not, whether the financial position as well as the sales
percentage of the business would improve or not. During the team meeting, the staff can infer
their suggestion for the sake of running the business successfully.
Rationale behind the solution and the implementation plan
Rationale behind the implementation of market penetration pricing strategy:
 For increasing the market share of the business by maximising the sales
 For attracting more customers over the competitors.
 Increase the brand loyalty
 Hold the leading position in the competitive market and drive the rival firms from the
industry
 By increasing the sales, the volume of output production will be increased and hence,
consequently, per unit fixed cost will be decreased.
Rationale behind the selling of organic and herbal products:
 Organic and herbal products are fresh and it is necessary to have for maintaining the
healthy life style.
 Since, doctors also suggest to have this food over the conventional food, most of the
customers are inclined to avail this. This is the main reason of attracting and
increasing the sales of Red Rooster.
Tested assumptions
Figure 1: Trend of rising demand for organic food across the globe

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Figure 2: Advantage of having organic food over the conventional food
Based on the above two figures, it can be observed that the demand for the organic and herbal
food by the Aussies is at the highest and in the largest position in the global market.
Similarly, from the second figure, it can be seen that nutritional value of having organic food
is much high than the conventional food. Therefore, it can be inferred that Red Rooster will
be successful and will meet the rising demand of the Aussies by selling the organic and
herbal food. Consequently, the sales and the financial position of the firm will be improved
sharply.

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Conclusion
In conclusion, it can be demonstrated that proper management of the firm can successfully
deal with the organisational challenges and can improve its operational and financial
performance. At the end of the research it can be said that Red Rooster will be able to boost
up the sales by uplifting the satisfaction level of the customers. Therefore, the nature of
managerial problem solving has positive influence on the performance level of the business
and the firm can successfully survive its business in the long run.

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Bilbiography
Koehn, E. (2018). “On the verge of bankruptcy”: Red Rooster franchisees allege troubles as
senate inquiry submissions roll in. Retrieved from
https://www.smartcompany.com.au/business-advice/franchising/senate-inquiry-into-
franchising-takes-submissions/
Naturally Good. (2018). Australians are hungry for organic food and drink. Retrieved from
https://naturallygood.com.au/food-drink/australians-are-hungry-for-organic-food-and-
drink/
Red Rooster. (2019a). If you love chicken, you will love red rooster. Retrieved from
https://www.redrooster.com.au/about-us/
Red Rooster. (2019b). Our promise to you. Retrieved from
https://www.redrooster.com.au/promotion/our-promise-to-you/
Scattergood, G. (2017). Organic in Australia: The Latest consumer trends and business
opportunities revealed. Retrieved from
https://www.foodnavigator-asia.com/Article/2017/11/16/Organic-in-Australia-The-
latest-consumer-trends-and-business-opportunities-revealed
Syfret, W. (2018). Don’t Panic, But Red Rooster Could Be In Serious Trouble. Retrieved
from https://www.vice.com/en_au/article/qvx7yq/dont-panic-but-red-rooster-could-
be-in-serious-trouble
Young, E. (2016). Health experts count cost of cheap fast food as Red Rooster launches
deliveries. Retrieved from
https://www.watoday.com.au/national/western-australia/health-experts-count-cost-of-
cheap-fast-food-as-red-rooster-launches-deliveries-20160115-gm6ngu.html