Student Biryani strategic management

Strategic Management (Final Project) Submitted To Ms. Aleena Mukarram

Submitted By Mamoona Naz Anum Javed Sumra Arif Anam Saleem Tayyaba Gul Niazi Zarqa Zareen

MBA V 6th January 2014

Table of Contents Executive Summary ............................................................................................................................... 1 Introduction ............................................................................................................................................ 2 Entrepreneurial Journey Of Student Biryani (History) .......................................................................... 2 Setup Of Student Biryani ................................................................................................................... 2 Philosophy Of Student Biryani: ......................................................................................................... 3 The Journey ........................................................................................................................................ 4 Company Profile ................................................................................................................................ 4 Products & Services ........................................................................................................................... 5 Strategic Objectives .............................................................................................................................. 6 Vision & Mission Statement .............................................................................................................. 6 Objectives: .......................................................................................................................................... 8 External Assessment .............................................................................................................................. 9 Food Industry: .................................................................................................................................... 9 I/O View ............................................................................................................................................. 9 Competitive Analysis: ...................................................................................................................... 10 PEST Analysis: ................................................................................................................................ 12 Internal Assessment ............................................................................................................................. 15 Resource based view: ....................................................................................................................... 15 Evaluation of Environment .................................................................................................................. 19 SWOT Analysis: .............................................................................................................................. 19 External Environment: ..................................................................................................................... 20 The External Factor Evaluation (EFE) Matrix: ............................................................................ 20 The Competitive Profile Matrix (CPM): ...................................................................................... 22

Internal Environment: ...................................................................................................................... 22 BCG Matrix for Student Biryani: ................................................................................................. 22 The Internal Factor Evaluation (IFE) matrix: ............................................................................... 24 Strategies Recommended ..................................................................................................................... 25 Market Development: ....................................................................................................................... 25 Franchising: ...................................................................................................................................... 26 New Product Development: ............................................................................................................. 26 Related Diversification:.................................................................................................................... 27 OD Through Training And Development: ....................................................................................... 27 Integration Of Internal System Through ERP: ................................................................................. 27 Strategic Alliances: .......................................................................................................................... 28 Backward Integration: ...................................................................................................................... 28 Marketing Efforts: ............................................................................................................................ 28 Conclusion ........................................................................................................................................... 29

EXECUTIVE SUMMARY Haji Muhammad Ali started off selling Biryani in 1969 in a small area of Saddar, Karachi near some educational institutes. He named his small business Student Café. This business got so much fame that helped in expansion of this small Dhaba into a complete dine out restaurant with working chains in Pakistan but also in U.A.E, famous with a brand name of “Student Biryani” just because of its clear mission, vision and by setting strategic objectives. We have suggested some effective strategies to Student biryani in order to make it more efficient. By doing External assessment and applying Industrial Organization view we got to know that there exists a strong market of fusion of eastern and western cuisine due to changes in eating trends. Student Biryani along with tradition food is also focusing on fast food to catch young generation. Analyzing Student Biryani by Five Forces Model, we extracted that Student Biryani is facing strong competition from KFC, McDonald’s etc. and Customers can only be grabbed by offering innovative and quality food. Political condition of Pakistan has direct impact on Food chains as Student Biryani belongs to Karachi and there exists the instability. From the angle of Resource based view, Student Biryani is focusing on team work by indulging all departments to give their best to earn customer loyalty. Major Strength of Student Biryani is its strong Market share in Karachi (Big city of Pakistan). It is accelerating towards U.A.E as well and availing opportunities to expand it to U.K and U.S.A as well to promote Asian food. The suggested strategies are Market & Product Development, Related Diversification, Backward integration, Franchising, Organization Development, Marketing efforts and information integration would really help Student Biryani to attain a big market share in the Food industry of Pakistan.

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STUDENT BIRYANI Introduction Student Biryani is a famous national brand making waves in the ethnic food markets in Pakistan since 1969. It is enjoying market leadership by providing Biryani with a consistent taste and quality. It is having the largest franchise network of outlets within the country by having its presence in the major urban cities of Pakistan. It has already expanded its market internationally by stepping in UAE and exploring its potential market in UK, USA and Europe soon.

Entrepreneurial Journey Of Student Biryani (History) Student Biryani is one of the impressive examples of entrepreneurship in Pakistan. It started off with a sunny afternoon of October 1969 when 40 years old man “Haji Mohammad Ali came up with an idea of supplying Biryani in Saddar Karachi. As biryani was a popular dish for the masses and the area was deprived of a proper food supplier, so, it was an ideal time and place to start selling this popular dish. This prompted Haji Sahib to test the market by selling Biryani.

The Biryani was prepared by Haji Mohammad Ali and his family members at home, from homemade spices and recipe. The set up was a small Dhaaba with a bamboo roof supported by wooden pillars,

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with waiting staff comprised of two elder sons serving with limited seating capacity. It started off with

one tumbler (Daig) of Biryani serving about 40 people per day. So, it was a humble beginning with that popular taste of Biryani which dominated the business name of Café Student, and now Student Biryani is the title of fame serving nationally as well as internationally on a large scale.

Significance of Name Café Student As the outlet was surrounded by various educational institutes i.e. St. Joseph, St. Patrick’s, St. Paul’s and various Government schools so that’s why it was named Café Student to attract students in order to provide them quality Biryani with economical price to grasp the market.

Improvement in Infrastructure Patience and hard work resulted in a stable and gradual increase in the business. Responding to the market demand resulted in various milestones achievements. In 1976, the first infrastructural improvement was made by creating a seating capacity of a hundred people.

Afterwards, there was a series of daring business decisions taking into account various needs spanning from business development, beating competition, making use of technological improvements, development of management systems, creating a niche market, to ensure a dominating presence within this competitive market.

Started off by standing behind the stall with few plates and a bucket full of aromatic rice “Biryani” catching attention of passersby is now a well-known Dine out Restaurant. From a humble start to

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becoming a brand, from a brand to a trend and from a trend to an icon, it has come a long way.

This has of course been possible through extreme hard work, a clear vision and unfailing customer loyalty.

Student Biryani is an organization built up totally, on hard work, passion, honesty and dedication.

1969

• Haji Sahib started off with opening Dhaba Hotel with limited seating capacity.

1976

• Made arrangements for a proper seating area.

1983

• Setup a restaurant as a joint venture in Saudi Arabia.

1989

• Initiated process to start a large Restaurant (300 seats)

2000

• Started Home Delivery services.

2003

• Dedicated wireless communication system was introduced.

2005

• Opened Nursery Take away.

2006

• Expansion of Saddar Restaurant (900 seats)

2007

• Opened branches at all important places of Karachi.

2008

• Set up a State-of-the-Art Call Centre for centralized Order taking.

2008

• Opened branch at North Karachi covering all areas in Karachi.

2008

• Opening up Branch at Fortress Stadium, Lahore.

Name of the Cafe: Main Branch: Other Branches: International Branches: Website:

Student Biryani ZC-57 Katrak Road, Saddar, Karachi 74400, Pakistan. Karachi and Lahore. UAE (Dubai, Abu- Dhabi, Kuwait) http://www.studentbiryani.com/

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Products:

Biryani Bucket

Burger

Biryani Tumbler (Daig)

Student Family/ Party Pack

Kids Biryani

Tin Pack

Meal

Sweet Dishes

Services: For Student Biryani, customers are priority and they have adopted a number of approaches to serve their customers in the most efficient way.

 Dine In Restaurants Student Biryani ensured their presence in almost all the main residential, commercial and business areas all across Karachi through their own and franchised restaurants.

 Take Away Take Away Counter Service is available in all restaurants for customers satisfying their various types of needs. This service is cherished by customers due to its high level of efficiency.

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 Home Delivery Service Through a modern centralized Call Center System and dedicated motorbike service delivers food at customer doorstep with highest level of efficiency. Delco Units are the setups serving delivery operation for customers of far areas from any restaurant.

 Remote Resort Bulk Delivery This unique and daring service is a great initiative. By adding spice to the joys of picnickers, they deliver delicious hot foods at the picnic points of your choice, within or around the city.

 Corporate Sales/ Institutional Catering Student Biryani is having the capacity of catering to big orders of any volumes keeping consistent taste and service standard. In addition they offer Prepaid Meal Voucher for their corporate customer which may be co-branded as per their requirement.

 Party/ Outside Catering They have a big kitchen facility run by their experienced chefs. They also cater to the needs of bulk supplies for all kinds of parties, birthday functions, wedding, and Religious festivals.

Strategic Objectives A vision statement identifies what the company would like to achieve or accomplish. A good vision statement provides the inspiration for the daily operations of a business and molds its strategic decisions. Aspirational in nature, vision statements lay out the most important primary goals for a company. Whereas mission statement defines the way through which the vision is to be accomplished. Mission is the business that the company wants to carry on to achieve the desired

6

future place.

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Vision Statement of Student Biryani It shows that Student Biryani’s vision is Customer focused. Their vision is to give quality and tasty Asian food to the customers. We can say that Student Biryani vision is clear and concise. Student Biryani is no doubt focusing on their vision and applying them through the help of their Mission Statement.

“Our implicit faith is to reach at your level by serving authentic and delicious Asian foods.”

Mission Statement of Student Biryani Mission statement of any organization focuses on attaining long term organizational goal by creating small objectives. Student Biryani’s Mission statement states:

“Our mission is to

the

tastes and needs of our consumers. Our efforts are focused on bringing the most and products to the market.”

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Student Biryani’s Mission Statement is fulfilling some of the Mission Statement components that are: 

Customers: Satisfy the tastes and needs of our consumer.



Product or services: Innovative food products although they should have used the world “Asian”.



Markets: They used the word market but they can elaborate it “National and International markets” as they have stepped up in International markets as well i.e.: UAE.



Technology: Although they haven’t used the technology factor in their mission statement but word innovative is depicting advancement factor.



Self-Concept: Distinctive and innovative word is depicting their competence.

Philosophy, Concern for survival, growth and profitability, public image and employees is although missing in the mission statement of Student Biryani but still its Mission statement is concise, clear and focused on their main objective.

“You’ve got to think about big things while you’re doing small things, so that all the small things go in the right direction.” ― Alvin Toffler To bring their dreams into reality, they are working towards creating a kitchen infrastructure in line with internationally recognized kitchen standards. Along with this, a careful and objective strategy has been adopted and the following strategic objects taken up: 

The objective is to attain the number one position in providing quality food with national standards, taste and freshness.



The aim is to be a leader in the area of ethics and values in the continuously growing food industry in the national markets.



Superior quality food in reasonable prices.



Maximization of customer satisfaction levels.



Deliver hygienic and healthy food items.

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External Assessment In Pakistan fast food industry is growing year on year at a very fast rate due to innovation and the presence of multinational chains like (McDonald’s, KFC, and Domino). These multinational chains have set high levels of revenue generation by using market Led approach and by modifying their menus. In Pakistan, multinational chains are considerably more expensive, they usually are frequented because they are considered chic and somewhat glamorous and because they usually are much cleaner than local eateries. Due to such aspect there is a rapid increase in trend of fast food restaurants outlets in recent years. These are satellite shaped outlets which have a very little or no seating capacity formed in nontraditional places such as plazas, office buildings, airports. Etc. This is done to provide more convenience to the final consumer. Nowadays not just in Pakistan but all over the world hectic jobs which people try to cover on daily routine and tend not to go to places to eat instead they call in urgency for food. Such scenarios also build the rate of growth of a product. In Pakistan, similar kind of situation has been developed over the past years and people are trying to save their job time as much as they can. Secondly an option has increased due to innovation of fast food in the category of eatables and it has become a taste for the consumers of all ages due to separate type of meals with different prices suitable for everyone. Traditional food places like Savour foods, Student Café, Rahat Bakers, Tehzeeb Bakers, Namak Mandi, Des Pardes and alike are focusing on the fusion of western and eastern cuisine to best suit the changing needs of the customers. The urgency of life has forced them to bring out delivery vans to sell on demand to far areas.

Industrial view also known as I/O view propagates the importance of external factors upon the growth and success of any business. In this view, strategy is about the firm creating for itself a ‘market position’ whereby it can defend itself from competitive forces and/or influence them in a way that places it at an advantage in relation to its competitors and suppliers.

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Considering the same approach the organization under study has leapt out of the bounds of internal focus. It is competing in the industry by molding its resources (internal factors) to strategize in the market of competitiveness. The management at Student Biryani doesn’t shut its eyes to the astoundingly changing consumer behavior nor does it ignore the competition. Since the food industry is changing rapidly with the changing lifestyles, Student biryani has come forward with products and services to best capitalize, free delivery, catering services, urgent delivery, and fast food items being some of the developments that have been made to adjust to the changing climate.

“We do not place especial value on the possession of a virtue until we notice its total absence in our opponent.” ―Friedrich Nietzsche

Porter’s Five-Force Model: Porter’s five-force model is framework to analysis the industry. This model is an analytical tool which helps Potential entry of new competitors.

organization to understand the competitor behavior, its strengths and weakness and the strategic position of firm which helps the firm to make strategies in order to take the competitive advantage in the industry. These five forces are

Bargaining power of customers.

Rivalry among competing firm.

Potential entry of substitute products.

 Rivalry among Competing Firm: Competition in the food industry is very high. Now

Bargaining power of suppliers.

trend has changed people like to eat food outside from different restaurants they have busy life and want cooked meal therefore number of restaurants has increased you can see restaurants .

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The competitors of student biryani are:       

BBQ Tonight. Food Centre. Karachi Food Centre. Bundoo Khan’s Restaurants. Pakistan Foods. KFC McDonalds

All these firms provide same products as Student Biryani provides. Student biryani competes with these restaurants on different basis like Food Center provide food at low price and has variety of dishes. Pakistan Food also provides food at low prices. KFC provides quality food and has relaxed and pleasant environment. Karachi food has variety of food and free home delivery.

 Potential entry of new competitors: If the barriers to enter the industry are high, than there are less chances of the entry of new business and less threat for existing players. In restaurant industry the threat of new entrants is very high as there is no as such legal restriction in opening restaurants and any other barrier. Opening of restaurant is not too much expensive one can easily open a restaurant.

 Bargaining power of supplier: Suppliers are very important for the success of business because they provide the resources to produce product. As they supply the raw material they have power over industry. In restaurant industry the bargaining power of supplier is very week because there is large number of suppliers and cost of switching is quite low. Raw material is rice, meat, chicken and different spices etc. all these are easily available.

 Bargaining power of customer: Bargaining power of customer is very essential aspect. Try to fulfill the expectation of customer. Prices should be low as compared to the competitors and provide good quality product. Bargaining power of customer is high in the restaurant industry because the restaurant industry has much matured, preferences of customer has changed they want quality product at

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reasonable prices. If someone is not providing quality product, charge reasonable prices or

variety of product then they can easily switch to another one that provides which they want because cost of switching is very low.

PEST analysis (Political, Economic, Social and Technological factors analysis) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. These macro-economic factors are the key determinants of the opportunities and threats for both small and large organizations. Moreover, they have a major impact on the strategies of any organization. The food intake of the people of any country is related to a number of factors like income of consumers, employment status, educational level and cultural differences. These factors largely affect the market growth rates, trends, structure, stability, customer preferences, profitability, etc. A successful organization will not only understand existing factors but also forecast change so that it can take advantage of changes in the environments in which it operates. In this regard, Students Biryani had been involved in series of business decisions taking into account various market needs spanning from business development, beating competition, making use of technological improvements, development of management systems, creating a market niche, to ensure dominance.

Political: Political factors are basically to what degree the government intervenes in the economy. Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Changes in patents laws, antitrust legislation, tax rates, and lobbying activities can affect firms significantly. These factors have a direct impact on the strategies of all organizations and so the political forecast becomes an important part of external audit. Student Biryani being the most famous food business of Karachi has to face severe conditions of political instability. Due to the widespread terrorism and violent conditions, there prevails

unfavorable circumstances which has a direct impact on the daily earnings of the organization.

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insecurity for almost all the businesses. At times, government has to impose curfew due to

Moreover, there has been a continuous increase in sales tax rates being imposed by government which affects the profits. There exists a potential for the firm to have its own distributors to distribute its rice and other ingredients countrywide as well as internationally. For this it has to take into consideration, the tariffs, trade agreements and other restrictions.

Economical: Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions and on the potential attractiveness of various strategies. During past few decades, the purchasing power of people has been increased and customers are willing to pay for the products that ensure quality and meet their demands than ever before. Higher level of income enables customers to dine out more often. Consumers are becoming more budget and health conscious demanding healthier menu and the lifestyles of people are changing. This provides an opportunity for the firm to generate maximum revenue by utilizing inputs at maximum. Increasing competition in an already struggling market is causing it to change its menu and broaden its product offerings in order to stay afloat. Furthermore, inflation rate is also observed to be showing a continuous increase due to which Student Biryani is also increasing its prices accordingly but at relatively slow pace as it is not meant to target upper class or charge premium.

Social: Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Consumers’ buying patterns is one of the major determinants for the firm to formulate its strategies regarding products. Students Biryani has an edge over other fast food businesses in Pakistan as it focuses on serving the most important

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traditional cuisine “Biryani”. This takes into account the cultural implications and trends in the

society where there exists strong preference for local food items which helps to generate sufficient demand. It basically targets youth as the name indicates towards students so the prices are set according to the affordability of students. Despite of less advertisement, Student Biryani enjoys a wellestablished brand image and customer loyalty mainly due to positive word of mouth by satisfied customers. It deals with the ethical issues in a quite well manner by providing halal, healthy and tasty food ensuring food safety as well. It also considers its corporate social responsibility effectively.

Technological: Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. Revolutionary technological changes and discoveries are having a dramatic impact on organizations all over the world. The internet has changed the very nature of opportunities and threats by altering the life cycles of products, increasing the speed of distribution, and erasing limitations of traditional geographical markets. The pace of technological change is increasing and wiping out businesses every day, so in order to survive in the market, firms need to adapt to the technological

changes

as

soon

as

possible. Students Biryani has performed quite

well

in

this

regard.

They

incorporated the technology into their system efficiently as well as effectively which

contributes

to

attaining

competitive advantage.

They also offer prepaid meal voucher for their corporate customer. Restaurants are renovating

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Due to increasing demand, they started taking orders online using a centralized call center system.

outlets and also locating outlets on more prominent locations and upgrading the facilities of kitchens. Processes are streamlined to improve efficiency. Technology is also being used to improve the supply chain management system. The organization has a unique remote resort bulk delivery system which uses a fleet of Suzuki pickups, and Shahzor Trucks for bulk deliveries having a wireless communication system.

Internal Assessment “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” ―Sun Tzu~ The Art of War

It is the internal analysis of the organization, in which the strengths and weaknesses of any organization is known. The aspects which are part of RBV include managerial, marketing, research and development, financing and operations. Student biryani is a Pakistani brand, which serves locally in Karachi and Lahore and internationally in Dubai and Abu Dhabi.

Management/Administration Student biryani has a very strong managerial team which makes its business a success. These managers are performing their best in related departments. The administration department is working very effectively and it is dealing with all the duties such as fielding telephone calls, receiving and directing the customers, filing and faxing, handling of different software, coordinating the work activities, management of all the administrative details, handling of all the inquiries and responding to all the complaints regarding the work performance.

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Marketing Their marketing department is targeting all the age groups. They provide their services on all the religious as well as other special occasions. Their special deals and offerings are their major promotional tools.

place and Promotion on the bases of the customers.

 Customers Student biryani has analyzed their customer very much to give them value by providing according to the demands of their customer.

 Product

Sales and marketing Finance and accounts Quality assurance Product development Business development Inventory control departments

Student Biryani

As marketing is responsible for four P’s which include Product, Price,

Administration

Operations

The products which they supply are biryani and other related food items. They provide biryani with a unique same taste and quality every time.

Research and development

Catering

 Price The pricing strategy of student biryani is very effective according the price sensitive customers of Pakistan.

 Place The distribution channels of students are very effective whether its restaurants or home delivery service they provide the product always on time. For this purpose they have very skilled workers and delivery staff. They provide services within 30 minutes of order whether is for single plate or for a whole Daig.

 Promotion The promotional mix which they are using is very much economical yet effective. As their target market is students and for communication with them, they are using social media sites like Facebook page. On the other hand they are also providing different deals and offers depending upon the occasions now a days they are promoting on the bases of Rabi-ul-awal.

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Finance Student biryani is conducting business on franchising basis. For this purpose they do not need much of the money for their future plans. The franchising strategy is helping them in expanding and in growth because it requires less internal resources. One time

Monthly

Upfront franchise fee

Royalty percentage of their total sales, Marketing and promotional contribution of percentage sales

Periodic

Renewal fee

Quality Assurance: Quality assurance (QA) is a way of preventing mistakes or defects in manufactured products and avoiding problems when delivering services to customers. Student biryani has a quality assurance department which refers to administrative and procedural activities implemented in a quality system so that requirements and goals for a product, service or activity will be fulfilled. It is using the systematic measurement, comparison with a standard, monitoring of processes and an associated feedback loop that confers error prevention.

Product Development: The product development department of student biryani is fully devoted toward the overall development of the product and always new and additional taste and healthy effects to their product. In addition Student Biryani always try to come with a new specification in their product.

Business Development: This department of student biryani is always hunting for new opportunities in order to increase and their growth. They also try on finding the areas where they can maximize their strengths.

Operation: Operation department of student biryani is concerned with all the features of the product from the time of its manufacturing that is cooking till its final destination that is when it is serving to the final customers.

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Inventory Control Department: This business is really dependent on the inventory level and shortage or surplus of inventory can affect the entire business. The inventory control department has a proper check over inventory. They always remain updated with the external environment and political conditions and effectively maintain their inventory level

Research and Development: The research and development department is major strength and always find out the best opportunities to get a dominant position in the market that is the reason they find out the opportunities for their business overseas.

Catering Department: Their catering department is very energetic and provides services at remote areas as well. They even provide their services at the picnic areas and on special events and occasions as well which is the reason for their successful business.

Human Resource Department: Their HR department is working effectively along with other departments and its long term commitment is being appreciated by the top management. They are making use of strategic management concepts at each level Their goals and objectives are measurable. Managers at all levels believe on strategic planning and they delegate the authority in order to get the best usage of time. There is a complete description of each job and the requirements for each job, their recruiting criteria completely describe their job specification. As far as job satisfaction is concerned their employees are really satisfied with the salary package, working hours and work environment. All employees are much diligent toward their duties in addition the absenteeism rate is also low.

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Evaluation of Environment "Build up your faith while starving the fears." — Jaachynma N.E. Agu SWOT analyses is also known as TWOS analysis in which the internal strengths and weakness and external factors opportunities and threats are analyzed. This is a very effective tool to analyze and examine the overall performance of any organization. SWOT analysis of student biryani is as under:

Strengths: 

Student biryani is well recognized brand. It has strong brand name in Karachi, Lahore and UAE.



Student biryani got brand of the year award in 2009.



Student biryani has unique taste and provides food of good quality. The recipe of biryani has never been replicated by any restaurant.



Student biryani always provides free home delivery service to its customers and always on time.



Prices which are being charged by the company are reasonable yet economical.



All the franchisees are providing all three the Take Away service, dine in and home delivery to their customers.



Also provides in bulk for all kind of parties and to the different organizations for their daily consumptions.



Marketing specially the promotion done by the company is very strong.



The company is also receiving online orders for delivery and reservation.

Weaknesses: 

The menu is limited due to which they are losing their market share.



Currently customer retention is a problem for student biryani as they are losing customer loyalty.



Student biryani doesn’t focuses on ‘R&D' and on innovating news products.



The organization does not focus on building relationship with customers.



Student biryani is currently serving in limited areas of Pakistan.

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Opportunities: 

Expansion in Pakistan through franchising or direct expansion.



Expansion in international market like in USA, UK.



Increase the variety of products.



There are opportunities in Rawalpindi and Islamabad as the literacy rate is very high in twin cities, there are more students which mean more customers.

Threats: 

Economic changes like inflation rate, income of customers and affect the sale of student biryani.



Political instability and poor law and order situations can affect the sales of the company.



There are many direct and indirect competitors of student biryani, which have a negative impact on the performance of the organization.



There is a threat of new entrants in food industry because biryani is not a difficult dish to create.



Customers are also a big threat because now it is very easy to switch to another brand.

The External Factor Evaluation (EFE) Matrix: An External Factor Evaluation (EFE) matrix is strategic management tool which allows strategist to summarize and evaluate the social, cultural, economic, demographics, political, legal and competitive information (opportunities and threats in the external environment). It tells about the current strategic position of company whether the firm take the advantage of opportunities and minimizing the threats. It helps to strategist in formulating new strategies on the basis of existing position. The EFE matrix is developed in five steps: 

List key external factors, all the opportunities and threats. The number of factors should be 1020.



Assign weight to each factor ranges from 0.0(not important) to 1(very important).The rate indicate the relative importance in the success of firm. The sum of all the weights should be one.



Assign the rate to each factor between 1 and4 which indicate how firm well firm strategies response to the factors. Multiply each factor’s weight by its rating.

20



Strategic Management



Sum the weighted scores for each factor to determine the total weighted score. The highest possible score is 4 which indicate the firm is responding in an outstanding way to the opportunities and threat and lowest possible rate is 1 which means firm strategies are bad and the average is 2.5.



Rating is done between 1 and 4 to each key factors, where •

4 = superior

•

3 = above average

•

2 = average

•

1 = poor Student Biryani Weight

Rating

Weighted score

Expansion in Pakistan(local market)

0.15

2

0.3

Expansion in international market(in USA,UK)

0.14

2

0.28

Increase the variety of product

0.12

2

0.24

Economic changes

0.09

3

0.27

Law suits

0.05

4

0.2

Competitors

0.15

3

0.45

New entrants in industry

0.10

2

0.2

Change in taste of customer

0.08

2

0.16

Change in purchasing power of customer

0.07

3

0.21

Health conscious people

0.05

2

0.1

Key external factors Opportunities

Threats

Total

1

2.41

The weighted score is below the average which means the firm strategies are not capitalizing on opportunities and avoiding threats so the company should have to formulate new strategies in order to take the advantage of opportunities and to minimize threats.

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The Competitive Profile Matrix (CPM):

Critical success factor

Student biryani

BBQ tonight

Food center

Karachi foods

Weight

Rating

Score

Rating

Score

Rating

Score

Rating

Score

Advertising

0.12

4

0.48

4

0.48

4

0.48

4

0.48

Product quality

0.10

4

0.4

3

0.3

3

0.3

4

0.4

Price competitiveness

0.10

3

0.3

2

0.2

2

0.2

3

0.3

Customer service

0.08

4

0.32

2

0.16

2

0.16

2

0.16

Product innovation

0.13

2

0.26

2

0.26

3

0.39

4

0.52

Global expansion

0.10

2

0.2

1

0.10

1

0.10

1

0.10

Local expansion

0.10

2

0.2

1

0.10

1

0.10

1

0.10

Market share

0.05

4

0.2

3

0.15

3

0.15

2

0.10

Financial position

0.10

3

0.3

3

0.3

3

0.3

3

0.3

Taste

0.12

4

0.48

2

0.24

2

0.24

3

0.36

Total

1

3.14

2.29

2.42

2.82

The weighted score of student biryani is 3.14 which mean overall company is stronger than the major competitors like BBQ tonight, Food Centre and Karachi Foods. Student Biryani is leading due to its taste, Customer Service, Advertisement, and Product quality. Meanwhile the critical factor of local expansion and innovation are not been given due attention.

BCG Matrix for Student Biryani: Boston Consulting Group Matrix is commonly known as BCG matrix, in BCG matrix is portfolio planning model which is used to measure the performance and profitability of different units based on their growth and market share. Student biryani does not only provide biryani but they also provide other different food items Chicken biryani Beef biryani Kids biryani Chicken nuggets Zarda Crispy chicken burger Haleem

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      

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Market Share Cash Generation High

Low Crispy chicken burger

Market Growth Cash Usage

High

Zarda

Low

Chicken nuggets Chicken biryani

 Cash Cow The product with high growth and high market share is the chicken biryani. Chicken biryani is the product which is the market share representative. Most of the cash is generated from sale of chicken biryani. As the market of chicken biryani is well established that’s why there is a low growth in the sale of biryani. Biryani is in lime light of student biryani product portfolio.

 Star Zarda is a part of star category because of its high growth rate and high market share. The market of Zarda is increasing and on the

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same time Zarda is a good representative of student biryani portfolio.

Strategic Management

 Question Mark There is a question mark on the future of crispy chicken burger because of its high growth and low market share. The demand of crispy burger is increasing but the share of the market is less in the portfolio of student biryani.

 Dog Chicken nuggets are the dogs of BCG matrix as there is low growth and low market share representation. Student biryani customers don’t see the food provider as a brand for western food rather they recognize it to be a Pakistani cuisine café.

The Internal Factor Evaluation (IFE) matrix: Internal Factor Evaluation (IFE) matrix is a forecasting tool of strategic management, which helps to analyze the internal factors affecting the performance of the company. Internal factors include the strengths and weakness of the organization. Through this analysis the strategic position of company is examined and helps to develop the further strategies to improve the performance of the organization. The IFE matrix is developed in five steps: 

List key internal factors all the strengths and weakness. The number of factors should be 1020.



Assign weight to each factor ranges from 0.0(not important) to 1(very important).The rate indicate the relative importance in the success of firm. The sum of all the weights should be one.



Assign the rate to each factor between 1 and4 which indicate how firm well firm strategies response to the factors. where o 4 = superior o 3 = above average o 2 = average o 1 = poor Multiply each factor’s weight by its rating.



Sum the weighted scores for each factor to determine the total weighted score. The highest possible score is 4 which indicate the firm is responding in an outstanding way to the

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

opportunities and threat and lowest possible rate is 1 which means firm strategies are bad and the average is 2.5. Student Biryani Key Internal factors Strengths Well recognized Quality Unique taste Economical prices Marketing Financial resources Weakness Menu is limited Decreased customer loyalty No innovation Limited area served Total

Weight

Rating

Weighted score

0.1 0.15 0.2 0.1 0.15 0.05

4 2 3 4 2 2

0.4 0.3 0.6 0.4 0.3 0.1

0.05 0.05 0.05 0.1 1

3 4 3 2

0.05 0.15 0.1 0.2 2.6

The weighted score of internal factors analyses is average 2.6 which means they are using mediocre strategies and not capitalizing and utilizing the full capacity of the all available resources and are not using these resources to reduce their weaknesses. With the help of the analyses it is realized that there is a strong need to emphasis on the strategic management of the organization.

Strategies Recommended By looking at the SWOT analyses it is evident that Student Biryani needs to expand their operations to other markets locally and internationally. Locally, they should operate in the major cities like Twin cities, Multan, Faisalabad, Hyderabad, Quetta, and Peshawar. These cities are known to be populated with the youth. And youth being the main target of Student biryani from the outset, promises a great market share and growth. Cities like Faisalabad and Rawalpindi have mostly working or studying youth, who need eateries like Student biryani for their survival in fast moving era. The Recommendation here is to tap these unsought markets by opening up branches near to the educational institutions, commercial areas and residential colonies, as did Savour Foods by opening up in the midst of commercial Islamabad (Blue-area). Following the same approach Student Biryani

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can increase the market share.

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Globally, Student biryani should concentrate on the geographical areas/regions which are populated by Asians; such as USA, UK, Saudi Arabia, Qatar etc. These areas have been the focal point for the traditional cuisine providers for the last 2 decades. Being a brand that is well recognized in Pakistan and UAE it can surely hope to compete with the best quality food, as a competence because quality and taste are all what it takes to win a foodie customer.

"Great results, can be achieved with small forces." — Sun Tzu (The Art of War) To achieve Market development, Student Biryani should give franchises to those who have passion for excellence, are committed towards profession, have vision to explore and expand and have capacity to afford the price of promising business. Franchising can lead the business to new geographic areas without massive expansionary investment. To make better out of it, the franchises must be given to those who plan to open them in educational and commercial/business areas as explained before. Here caution should be made to eliminate the chances of quality deterioration by centralizing the quality and marketing efforts.

“If you want something new, you have to stop doing something old” ― Peter F. Drucker An organization must innovate in the form of new and successful products, same is for Student biryani; it must innovate and develop new products that satisfy masses to survive and grow in the ever changing environment. With the flagship of Biryani it can go into Pulao business to increase the number of customers by capitalizing on its brand name. They should bring new tastes into their menu, innovation in the term of tasty traditional food augmented with technological ease of access i.e. fast delivery can take the brand to success. As done by McDonalds, every now and then they introduce new deals and tastes and whatever gets more than expected demand gets a place in the menu. Biryani, Pulao and such cuisines can be transformed into new food items by a few tweaks in the recipe for which having creativity and a magnificent taste bud is the prerequisite.

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Related diversification can be taken up as a strategy for expansion. In this case, the firm can bring out new recipes from the same resources i.e. rice, chicken, and spices. The possibilities are limit less. It should spin off in to new businesses that have similar resources but different nature, for example chicken can be used in ready to cook meals, package stock cubes, fried delights, bakery items etc. This diversification would help the organization to explore new horizon without developing new supply chains, results if favorable would bring out a star otherwise no great damage would incur while experimenting.

Training employees correctly is essential for any successful restaurant. Food service is a customercontact-intensive business. Staff needs to be attentive to customer demands while displaying the personality of the organization. The restaurant business is challenged with the trade-offs of quality and speed of service. Staff must manage these constraints effectively; training will help to achieve this goal. There is no right way to train a food service staff; instead, the organization should pick and mix methods to meet operation's particular situation and needs that now is the communication skills of the waiting staff. The waiting staff, should be well trained before hitting the floor. They must be skilled enough to deal with extreme situations.

As the organization expects to expand the logistical and information handling problems will arise. To curtail this problem the firm must integrate management information system through ERP (Enterprise Resource Planning). ERP is basically a set of software that gather and store information regarding the processes of an organization, making it interactive to ease decision making. A data Base must be developed to centralize the flow and storage of data for problem solving and decision making. It will help the management to have real time information for better decision making. It will also make the processes of the organization transparent to the management making it responsive to the problems as they arise.

making the delivery of services exponentially faster than that of the traditional data system.

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The centralization of the data will also make the financial and operational processes easy ultimately

As the organization is going global the procurement of raw material at a low cost with good and consistent quality becomes difficult. Student biryani can form strategic alliance with the exporters of Rice in Pakistan, to supply the same quality rice to off shore franchises of the brand, to ensure low cost and consistent quality supply of the major ingredient of the famous biryani. This will not only ensure cost reduction but will also make possible the consistency in quality.

In food business everything comes down to taste and quality of the food. To ensure this many organizations do backward integration that not only brings desired taste to the product but also eliminates the supplier authority and manipulative prices, while standardizing the cost. Being a small and rapidly growing food chain, Student Biryani cannot be expected to get into massive backward integration as rice being the basic raw material cannot be produced in house without major investment. But chicken, the other important ingredient can be made an in house resource by acquiring poultry farms; the trick here would be to go slow, one by one acquire the suppliers to ensure desired quality production. Spices the most important of all can be processed in house to ensure the required and desired quality and this integration can be made with least investment.

A product is incomplete without marketing. Organizations spend more on marketing than on the production itself, reason?? The more effective the marketing efforts are the more satisfied and loyal customer an organization can expect to have. Marketing is everything an organization does for a flawless delivery of product/services to the customer. Whenever any aspect of an organization comes into contact with a customer it is an opportunity for marketing. After all; “A satisfied customer is the best business strategy of all.” ―Michael LeBoeuf In food business marketing is all the more essential, customer should be aware of the services a restaurant is providing so that he can best benefit from them. Organizations have come forward with

different price levels.

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the idea of meals and deals that are packages containing different combinations of food items at

Student Biryani also offers deals for different customer segments; marketing department has devised perfect product and price combinations to satisfy the customers, while making the distribution top of the class. But it has failed to give much attention to the promotion facet of marketing and has narrowed the focus to social media marketing; where it can certainly use print media to attract customers, and also could have used TVS for occasional marketing campaigns. No wonder that brand awareness of Student biryani is limited to Sindh and Lahore.

Conclusion “A company without a strategy is willing to try everything” -- Michael Porter After the analysis of Student Biryani with the help of different strategic management tools we can conclude that all though Student Biryani is a well-known brand but strategies and managerial activities of firm are very weak. There is need to develop strong strategies which include Market developing, franchising, related diversification, backward and forward integration, organizational development and marketing efforts. All these strategies and efforts will not only increase the financial profits of the firms but will also increase the customer satisfaction and will bring customers loyalty. There is also a need to make efforts to transform weaknesses in to strengths and create immunity from threats.

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References Facebook. 2014. Student Biryani. [online] Available at: https://www.facebook.com/StudentBiryaniOfficial [Accessed: 1 Jan 2014]. Foodjournal.pk. 2014. Pakistan Food Journal.. [online] Available at: http://www.foodjournal.pk [Accessed: 1 Jan 2014]. Hafeez, Z. 2013. Strategic Management at Student Biryani. [radio] Skype, 28 Dec. Studentbiryani.com. 2014. Student Biryani Pakistan & Dubai - Biryani | Chicken Biryani | Order Online. [online] Available at: http://studentbiryani.com [Accessed: 5 Jan 2014].

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