Industry Analysis
As discussed in prior sections of the report, the competition for Moma Monaz can be distinguished into three categories: fast food chain locations, non-chain restaurants, and bars. The first category presence in the area is substantial, with McDonald’s, Wendy’s, KFC, and Subway all present. The other locations are more numerous and lack significant distinguishing factors, and therefore, they will be discussed in broader detail. The same concept applies to bars, which vary significantly in size and price range, though they can be broadly categorized into pub-style and saloon-style establishments. This section will discuss the competitive strengths and advantages of each type of location compared to Moma Monaz. Overall, while some of these establishments may create difficulties for the restaurant, it should be able to find a niche and attract a stable, profitable customer audience.
Fast-Food Chains
Fast-food chains have several distinct advantages over Moma Monaz, which have enabled them to prosper throughout the nation and the world despite the presence of numerous local restaurants. The first and foremost is the price, as these franchises are able to use highly standardized procedures to reduce costs and pressure suppliers into lowering their prices. It is challenging for an individual location to offer the same level of quality at the same cost to the customer while remaining profitable. The other powerful advantage of fast-food chains is their brand power, which creates an expectation of consistent quality. It is a safer choice for a new customer to opt for a franchise rather than an unknown local restaurant. In the former, the customer knows what they will get, even if they do not think that the food is healthy.
With that said, this consistency also generates a substantial competitive advantage for Moma Monaz. Many people are aware of the health risks of franchise fast food or tired of its limited selection of offerings. Moma Monaz addresses both of these concerns by offering an unusual food style that is not replicated in fast food chains and is healthy. Customers who are interested in experimenting and looking for delicious food will appreciate the restaurant’s special-made dishes. Another advantage is Moma Monaz’s ability to serve as a gathering spot, especially in the evening. Where fast food is focused on letting one eat quickly and move on, Moma Monaz also serves as a bar where one can relax with friends. As such, the target demographic may discover it through such a gathering, experience the tasty food, and return later during the day to eat.
Individual Restaurants
Local restaurants exist in a variety of sizes and price ranges, but the primary competitors can be separated into large, full-course restaurants and small, fast-food oriented locations. Moma Monaz is located between the two categories as a restaurant and competes with both to a degree as a result. Large restaurants have the advantage of superior service and variety, offering people meals that the tapas cannot match. Many of the foods sold there may be considered by hungry customers as more valid meals, with one or two dishes being enough as opposed to three or four tapas. At the same time, such restaurants also tend to have higher prices and a more formal atmosphere, which may alienate some visitors. Moma Monaz is a substantially more relaxed location with lower prices, even when the higher number of dishes is considered.
The fast-food establishments are more viable competition, offering customized meals at affordable prices and targeting the same demographic. At some locations that are targeting the franchises directly instead of providing a more premium proposition, prices may be lower than those at Moma Monaz. These restaurants may also offer a different but similarly unusual style of food compared to that of tapas. However, many struggle to match Moma Monaz’s various promotions and other events, focusing on the food more than the atmosphere. Price-conscious customers may find an attractive timed offer at Moma Monaz, especially if arriving in groups, and enjoy the food enough to return. Additionally, Moma Monaz’s bar function still stands out as a significant advantage that will attract customers who do not have an interest in the other locations.
Bars
It is essential to distinguish between the pub and saloon-style bars when discussing the competitive advantages and issues of each. Pubs are typically more oriented toward beer and sell both substantial meal offerings and snacks that go with one’s drinks. Their selection of beer, especially from the tap, is likely to be substantially superior to that of Moma Monaz. As such, they may attract people who are interested in particular beer styles or more Western food styles. With that said, such beer will likely be craft or imported from other countries (possibly both), leading to higher prices. The other foodstuffs are also relatively high-priced, leading Moma Monaz to have a price advantage over pubs. Additionally, the author’s restaurant does not stream sports unless the visitors request it, providing a more friendly atmosphere for people who prefer quieter environments.
Saloon-styled bars tend to cater to a different customer category, offering mostly hard alcohol and American-styled dishes and snacks. The selection of non-beer alcohol at Moma Monaz is extremely limited due to low customer demand, which limits the competition between it and those locations. Overall, it is unlikely that, when customers have to choose, they consider each an equally viable choice. Instead, they decide based on their specific preferences, visiting Moma Monaz or a pub for a beer and a saloon for whiskey or other hard alcohol. With that said, it should be noted that Moma Monaz uses a South American aesthetic in its decorations and products, featuring several varieties of tequila, pisco, and caipirinha. People who are interested in these drinks accompanied by suitable snacks may choose to visit the location over alternatives such as a saloon.
Menu Costing
For this paper, the author will design the costing for three different menu items: a Greek salad, stuffed mushrooms, and chorizo poached in red wine. Each will be assumed to take 15 minutes to cook (not including prior preparations done before the order, which are done in bulk to save costs) by a chef who earns $13 per hour. Additionally, Moma Monaz will incorporate a roughly 7% profit margin into the price.
Greek Salad
- Olive oil-based dressing – 0.004 gallons at $15.25 per gallon – $0.61
- Feta cheese – 0.1 pounds at $3 per pound – $0.30
- Cucumbers – 0.1 pounds at $1.70 per pound – $0.17
- Tomatoes – half at $0.41 each – $0.21
- Red onion – half at $0.45 each – $0.23
- Labor – 15 minutes at $13 per hour – $3.25
- Total cost: $4.77
- Price: $5.25
Stuffed Mushrooms
- Mushrooms – 0.2 pounds at $2.50 per pound – $0.50
- Walnuts – 0.06 pounds at $10.76 per pound – $0.65
- Cream cheese – 0.1 pounds at $2.06 per pound – $0.21
- Spinach – 0.1 pounds at $3.80 per pound – $0.38
- Artichokes – 0.1 pounds at $2.10 per pound – $0.21
- Mozzarella – 0.1 pounds at $3.48 per pound – $0.35
- Breadcrumbs – 0.02 pounds at $0.91 per pound – $0.02
- Scallion – 0.1 pounds at $1.84 per pound – $0.19
- Labor – 15 minutes at $13 per hour – $3.25
- Total cost: $5.76
- Price: $6.25
Chorizo Poached in Red Wine
- Chorizo – 8 ounces at $0.20 per ounce – $1.60
- Red wine – 0.33 gallons at $12.54 per gallon – $4.18
- Garlic – 0.07 pounds at $ 9.50 per pound – $0.70
- Bay leaves – 0.02 ounces at $1 per ounce – $0.02
- Cayenne pepper – 0.05 ounces at $1 per ounce – $0.05
- Total cost: $6.55
- Price: $7.25
Company Structure
Ownership Type
Moma Monaz is a privately owned restaurant, as this type of ownership is the only one that is reasonable given its circumstances. It is a small business, most of which are owned by individuals who employ several employees. As Canzer et al. (2019) note, sole proprietorships are relatively easy to manage legally and flexible, enabling the owner to put in the degree of work that they consider suitable for the returns they would get. The other reason why one may seek a different ownership model, funding, is also irrelevant in this case. The author has no intention of expanding their business significantly at the moment, and, therefore, does not need money. As such, they plan to retain the current approach to ownership to avoid overcomplicating matters unnecessarily.
Organizational Chart
Standard Operating Procedures
Moma Monaz’s operations begin in the morning, when the employees arrive, prepare the restaurant for opening, and open it. They start the necessary appliances, check stocks of ingredients, and set up the tables in the dining area. If any ingredients are running low, they retrieve more from the pantry to avoid wasting time later on. If at any time, employees also notice an incoming ingredient shortage in the pantry, they report it to the owner, who sends the corresponding order for a supplier. At this point in the restaurant’s operations, the food that takes longer to cook, such as the stuffed mushrooms, which can take up to 2 hours to prepare, is also set up ahead of time. Once all of these tasks are complete, the restaurant opens for business and admits the first customers, taking their orders and starting active cooking.
This mode of operations continues throughout the day and most of the evening without significant changes, for the most part. Until the evening, the owner operates the bar alongside their other duties, overseeing the dining area and serving drinks. In the evening, when drink orders intensify, they are replaced with a bartender who can answer the demands more competently. Waitresses move through the area at all times, serving customers and watching for requests when idle. The cooks monitor the long-cooking foods, preparing to start making new ones regularly or when demand for a specific item increases. The unwanted items are disposed of at the staff’s discretion if nobody buys them, and their cooking numbers and recipe issues are later reconsidered. This procedure continues until the restaurant’s closure when people leave, and the staff starts preparing for the next day.
Before closing, the staff clean the restaurant, ensuring that it is ready to open tomorrow. The kitchen is deep-cleaned once a week to maintain hygienic requirements and maintain the appliances. The cooks perform a systematic check of remaining stocks to ensure that there are no shortages, which is an essential part of SOPs as it ensures that the business runs smoothly (Caldon, 2017). Any potential problems are summarized and given to the owner, who then places an order for the necessary items with the suppliers. Monthly, the owner analyzes the sales of the different items and reviews the menu as well as the pre-cooking for slower-prepared items. They then lock the restaurant, confirm that all security measures are in place, and leave until the next morning.
HR Procedures
When considering hiring a person, the owner conducts the interviews personally. They put out advertisements in the surrounding area, targeting potential workers who live nearby and can come to the job without excessive effort. To save time, interviews are conducted over the phone, with the applicants explaining their competencies and the owner reaching a preliminary decision based on their impression. Waiting staff is generally hired based on the interview, while bartenders and cooks have to come in person and perform a simple demonstration of their skills. The former have to make several simple cocktails from memory after being told their names during the phone interview, and the latter have to cook several items from the menu. Following success in the test, the person is accepted for the position and asked to start immediately or shortly after.
To retain and incentivize the workers in the restaurant, the owner uses regular performance evaluations. A worker receives a stable rate as well as bonuses based on them achieving results above expectations. The best performer receives an “Employee of the Month” award as well as a special cash bonus, motivating workers to strive toward it. It should also be noted that the waiting staff and bartender receive tips from customers, encouraging them to deliver excellent service. With that said, few to no workers receive pay raises because of Moma Monaz’s inability to afford it, depending on bonuses to improve their income.
SWOT Analysis
Strengths
- Unique menu designed to incorporate taste and health.
- Tapas are nutritious and filling food as well as snacks to eat with drinks.
- Reasonable prices that attract young adult customers.
Weaknesses
- Limited diversity in the menu due to the focus on tapas.
- Lack of reach in the community due to limited advertisement opportunities.
- Lack of power in supplier negotiations due to low purchase volume compared to other companies.
Opportunities
- Increased reach to potential customers at little to no cost via social media.
- Expansion into delivery through services such as UberEats and DoorDash.
- Holding promotional events to attract and retain customers with discounts and entertainment.
Threats
- Fast-food chains attracting new customers with their advantages, hurting individual restaurants as a whole.
- COVID-19 leading to lower customer traffic and more severe regulations.
- Competition in different food styles and price segments potentially taking away customers.
References
Canzer, B., Khan, M. H., Kurtz, D. L., & Boone, L. E. (2019). Contemporary business (3rd ed.). Wiley.
Caldon, P. (2017). A balanced approach to restaurant management. iUniverse.