ENTR101: Analysis of Yarri Restaurant Business Venture Report

This report offers a comprehensive analysis of the Yarri restaurant business venture, examining its inception and operational aspects. The report begins with an executive summary, followed by an introduction that defines business ventures and sets the stage for the Yarri restaurant case study. The discussion section provides a detailed description of the restaurant, its menu, and its ambiance, highlighting its focus on sustainable ingredients and natural dining experiences. The report then identifies and evaluates the restaurant's capital sources, including personal investments, partnership investments with winemakers, and a commercial bank loan for advertising. A crucial part of the analysis is the PESTLE analysis, which assesses the political, economic, socio-cultural, technological, legal, and environmental factors affecting the restaurant. The PESTLE analysis examines the political stability of Australia, the economic impact of recessions and fast-food competition, the multicultural society and aging population, the advanced technology, the liberal legal environment, and the environmental regulations. Finally, the report identifies potential risks associated with the restaurant business, such as competition, economic downturns, and regulatory changes. The conclusion summarizes the key findings and insights gained from the analysis, providing a concise overview of the restaurant's challenges and opportunities.

Running head: ENTREPRENEURSHIP AND INNOVATION
Entrepreneurship and innovation
Name of the Student
Name of the University
Author note

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Executive Summary
The purpose of this report is to analyze a new business venture. The selected business venture for
this report is the Yarri restaurant. The report will include the capital sources required for the
establishment of the Yarri restaurant along with their origin. Apart from that, this report will also
contain the PESTLE analysis of the Yarri restaurant which is located in Australia to find out the
potential challenges and difficulties faced by it. Finally, the potential risks of the Yarri restaurant
will also be discussed in this report.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Description of the Restaurant business........................................................................................3
Capital sources for the restaurant and methods of obtaining them..............................................4
PESTLE Analysis of the Yarri Restaurant..................................................................................5
Potential risks in Restaurant Business.........................................................................................9
Conclusion.....................................................................................................................................10
Reference List:...............................................................................................................................11

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Introduction
A business venture can be defined as a startup business which is established by a single
or a group of individuals with the intention of getting profited financially. A majority of the
business ventures are created based on the demand of the market. Requirements of the
consumers are identified for the products or services in order to deliver consumer specific
services or products. This is done to enhance the satisfaction of the consumers. In this report,
analysis of a restaurant business which is a new business venture will be performed. A brief
description of the Restaurant business will be provided in this report. Along with that, the chief
sources required for the mentioned business and the method of obtaining them will also be
discussed here. The challenges and difficulties faced by the mentioned venture with respect to
legal, technological, political, economic, environmental, social and cultural challenges have also
being discussed in this report. The potential risks of the mentioned business venture will also be
identified.
Discussion
Description of the Restaurant business
A Restaurant business chiefly involves preparation and serving of food and drink items in
exchange for money. The ‘Yarri’ restaurant is a new restaurant which has been established by
Chef Aaron Carr who is a well-recognized chef of Australia. The restaurant has been established
in conjunction with the winemakers of Snake and Harring. In order to gain the loyalty of the
local Noongar people, the menu of the Yarri restaurant chiefly features sustainably sourced
ingredients. In order to provide a ‘close to the nature feeling’, the restaurant provides both

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outdoor as well as indoor dining (Yarri Restaurant and bar, 2018). While outdoor dining involves
dining in a courtyard under a tree, indoor dining includes a dining room with limestone,
terracotta, timber and leather finish.
Capital sources for the restaurant and methods of obtaining them
In order to open the above mentioned restaurant, the help of three capital sources, namely,
personal resources, partnership investment and commercial banks have been taken.
Personal resources: More than 60 percent of the capital sources that has been invested for
establishing the Yarri Restaurant includes Chef Aaron Carr’s personal investments. He used
more than 60 percent of his total savings for buying the plot for the restaurant.
Partnership investment: As is mentioned earlier, the business was open in partnership with
winemakers of Snake and Herrings. The majority of the expense of the construction of the Yarri
restaurant has been carried out by the mentioned wine manufacturing company (Ramos-
Rodríguez, Medina-Garrido & Ruiz-Navarro, 2012). The partnership between the two
organizations is a 50 -50 partnership. However, the investment of the Chef Aaron Carr is found
to be much more compared to that of the owners of the Snake and Herrings Wine Company.
Hence to compensate, the mentioned wine company has taken the responsibility of decorating as
well as providing furniture in the restaurant.
Commercial banks: Chef Aaron Carr has taken a loan from the National Australian Bank for
advertising and promotional purposes of his restaurant. Being a brand new restaurant, it is highly
crucial to promote and advertise the business in order to attract consumers and thus enhance the
consumer base of the organization. Several high-cost promotional tactics that include
advertisement though digital hoardings across the country and celebrity endorsement have been

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performed. In spite of the high interest rate of the mentioned commercial bank, the loan has been
taken to ensure effective promotion for attracting a huge amount of consumers.
PESTLE Analysis of the Yarri Restaurant
Being a new business venture, the mentioned restaurant is supposed to face several challenges as
well as difficulties while pursuing its business in Australia In order to access the external
environment of the Yarri Restaurant, a PESTLE analysis has been performed below. With the
help of the PESTLE analysis, the company will be able to access its potential challenges and
develop effective strategies to overcome these challenges.
Political factor
The political climate of Australia is highly stable. The political stability of Australia
has contributed to the significant growth of the food industry in Australia and it is expected that
by the end of the year 2018, the restaurant industry of Australia with representing approximately
32 percent of the total growth of the Australian food industry. This positive condition of the
restaurant industry owes to the political climate in the democratic federal nation comprising six
states and two territories. Australia is characterized by transparent legal actions designed to
eradicate corruption. The political regimes of the country act as a shield for the food industry that
protects it from any types of unjustified and uncompetitive practices through legislation. Thus it
can be clearly understood no potential challenges are expected to face by the company due to the
political environment in Australia (Oraman, 2014).
When it comes to export, import as well as foreign investment policy, the Foreign Acquisition
and takeover act guide all these mentioned policies. Moreover, the Australian government has

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the authority to formulate the exchange controls as advised by the Reserve Bank of Australia.
For Instance, the Yarri Company will require mandatory reporting for currency movement
exceeding 10 thousand dollars.
Economic factor
The economy of Australia demonstrates an annual growth in GDP by 2.9 percent by
the year 2015 (Chang, 2017). However, due to resent rescission the economic growth of the
mentioned nation has got hampered. However, compared to the other developed nation, the
economic condition of Australia is better. The sudden downfall of the Australian industry has
imposed a negative impact on the food industry of the nation. This is because consumers are less
likely to invest in restaurant and luxurious cuisines when they are suffering from financial crisis.
Moreover, the existence of fast food chains has enhanced the difficulties for the restaurant
industries to attract consumers during the time of economic crisis. The target consumers of both
the restaurant as well as the fast food chain industry are the office going individuals. Due to the
recession, the target consumers of the restaurant industry are switching their preference and
opting to dine in fast food outlets to save both times as well as money (Chang, 2017). Thus it can
be clearly understood that the second challenge that can be faced by the Yarri Company is the
preference of consumers for quickly made and inexpensive food items. However, the fact that
sudden fall of the economy has enhanced the unemployment rate in Australia, has made it easier
for the restaurant organizations to recruit staffs at a lower cost. Thus, the Yarri Company will be
able to enhance its number of labors as well as productivity by engaging more staffs at a lower
cost.
Socio-cultural Factor

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The society of Australia is multi cultural. The nation presents an organized social
movement aligned with its ethnic as well as racial inclusiveness. The history of Australia reveals
its commitment to assimilate several cultural groups. This, in turn, has made the country the
home of diverse individuals and depicts a cosmopolitan population. This multicultural society of
Australia acts as a challenging factor for the restaurant industry of Australia (Kim et al., 2013).
Due to variation in the taste, the restaurants need to have a huge variety in their menu lists in
order to ensure consumer satisfaction and enhance the competitive advantage. Hence, the third
challenge that will be faced by the Yarri Company is the huge variation in the taste of its
consumers.
Another issue which is faced by the food industry of Australia includes the ageing
generation of Australia. Since the number of youngsters an]d teenagers is comparatively lower
than the middle-aged and elderly people, the restaurant industry is suffering from the crisis of
efficient labors. It can be clearly understood that the efficiency, energy and skills of middle-aged
or elderly staff will be much lower compared to that of the younger staffs. Moreover, since
younger people are more likely to visit restaurants compared to elderly citizens, the ageing
population of Australia can be considered as a major challenge to the food industry of Australia
and therefore to the Yarri restaurant as well.
Technological factor
Being a highly developed country, the mentioned nation is technologically advanced.
The technological advancement of the mentioned nation results in the cost reduction, the
deliverance of high-quality services and wider connectivity to the supply and international
market. According to a recent survey, Australia is considered to be the most connected nation

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after Singapore, Taiwan and South Korea (Oraman, 2014). Information and communication
technology of Australia, that includes popular social media platforms and others, helps the
restaurant industry to effectively communicate with their supply chain as well as with the
consumers. Hence with the help of effective communication technology, the Yarri Company will
be able to understand the specific requirements of the consumers through a conversation on
Facebook, Linked In and other social media platforms. Another major advantage of the advanced
technology of Australia for the restaurant industry includes the availability of high-tech machines
and tools that reduce the need for employees in restaurants. As being discussed earlier,
Australian restaurants are suffering from lack of efficient employees, the high tech equipment
also help the restaurant to minimize the cost of recruiting employees (Chou, Chen & Wang,
2012). Thus it can be understood that the Yarri restaurant has no potential risks from the
technological environment of Australia.
Legal factor
The restaurant industry of Australia gets highly affected by the legislative changes in
the country since the restaurants require altering their operations from time to time to abide by
the rules and regulations of the country. In countries with generous regulation and liberal
principles conducting business is easier. Australia ranks lowest in regulation among the
Organization for Economic Co-operation and Development (OECD) members when it comes to
market entry barriers, foreign investment and telecom regulations (Suriani et al., 2015).
Moreover, the nation comes second in liberal approach in the retail supply chain. The liberal
approach of Australia reflects in the Australia-New Zealand Food Standards Code provisions that
include additives, food safety, genetically modified foods and labelling. However, due to the low
barrier for new entrance in due to liberal rules and regulation, the competition among the

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restaurants in Australia is high. Thus due to the legal environment of Australia, the Yarri
restaurant have the risk to face a high competition in the Australian restaurant industry.
Environmental Factor
After the excessive pollution due to the mass emission of carbon dioxide in
November 2010, the government has implemented strict laws and regulations to prevent further
environmental pollution. Moreover, in the year, 2011, usage of plastic bags was banned in
Northern Territory, Tasmania and South Australia. The decision was taken since plastics bags
were found to harm wildlife and require valuable resources for manufacturing. Moreover, the
Environment Protection and Biodiversity Conservation Act also look after the yearly emission of
carbon dioxide due to the food industry. Hence in order to establish a business in the Australian
food industry, the Yarri restaurant needs to abide by the environmental laws set by the nation.
Potential risks in Restaurant Business
Some of the potential risks of the Yarri Restaurant include
 Risk of Restaurant Failure
The health consciousness of the Australian citizens is preventing them to indulge
themselves in fatty food items that are served in restaurants. Consumers are found to be inclined
towards healthier food options. Moreover, due to the recession, consumers are found to be opting
for food options that are cheap and easily available (Chang, 2017). Above all this, the high
competition in the food industry in Australia enhances the risk of failure of the Yarri Restaurant.
 Frivolous lawsuits

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When it comes to the restaurant business, frivolous lawsuits are major risks. Several
examples are there where the restaurant owners are sued due to unsatisfactory services or
behaviors offered to the consumers (Suriani et al., 2015). Hence, even if the employees and
business of the Yarri restaurant are free from wrongdoings, there remains a risk of being sued by
the consumers and compensate with expensive legal fees.
Conclusion
Form the above discussion, it can be concluded that the restaurant industry of Australia has the
potential to enhance the revenue of the Yarri Restaurant. The high tech facilities and the
supportive governmental laws will help the company to enhance its annual revenue. However,
being a new business venture, the Yarri Restaurant may suffer from risks associated with the
multicultural environment of the nation as well as the high competition in the food market.
Moreover, there prevails a risk associated with the mentioned new business venture that includes
frivolous lawsuits and risk of business failure.

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Reference List:
Chang, R. C. (2017). The influence of attitudes towards healthy eating on food consumption
when travelling. Current Issues in Tourism, 20(4), 369-390.
Chou, C. J., Chen, K. S., & Wang, Y. Y. (2012). Green practices in the restaurant industry from
an innovation adoption perspective: Evidence from Taiwan. International Journal of
Hospitality Management, 31(3), 703-711.
Kim, E., Ham, S., Yang, I. S., & Choi, J. G. (2013). The roles of attitude, subjective norm, and
perceived behavioral control in the formation of consumers’ behavioral intentions to read
menu labels in the restaurant industry. International Journal of Hospitality
Management, 35, 203-213.
Kim, Y., Kim, M., & O'Neill, J. W. (2013). Advertising and firm risk: A study of the restaurant
industry. Journal of Travel & Tourism Marketing, 30(5), 455-470.
Oraman, Y. (2014). An Analytic Study of Organic Food Industry as Part of Healthy Eating Habit
in Turkey: Market Growth, Challenges and Prospects. Procedia-Social and Behavioral
Sciences, 150, 1030-1039.
Ramos-Rodríguez, A. R., Medina-Garrido, J. A., & Ruiz-Navarro, J. (2012). Determinants of
hotels and restaurants entrepreneurship: A study using GEM data. International Journal
of Hospitality Management, 31(2), 579-587.
Suriani, I., Shamsuddin, K., Khalib, A. L., Hazizi, A. S., & Fadlan, M. O. (2015). Barriers to
food quantity intake control and healthy eating among overweight and obese working

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Malay women in public service. International Journal of Public Health and Clinical
Sciences, 2(3), 81-93.
Yarri Restaurant and bar (2018). yarri.com.au.Retrived from: https://yarri.com.au/

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Appendix
Recommendation for the Yarri Restaurant
1. In order to deal with the competitive market of the Australian food industry, Yarri should
use online marketing an promotional techniques. The company should communicate
directly with its consumers through popular social media platforms in order to understand
their requirements and gain consumer loyalty (Chang, 2017).
2. In order to attract the health conscious consumers, Yarri must incorporate healthy cousins
and drinks like fresh fruit juices in their menu list. Moreover, being a new venture, the
restaurant should keep the pricing of its food items relatively lowers than its competitors
in order to gain competitive advantages (Kim, Kim & O'Neill, 2013).