Jumbo Seafood Restaurant Audit and Strategic Plan | Free Essay Example

Jumbo Seafood Restaurant Audit and Strategic Plan

Words: 4130
Topic: Business & Economics
Updated:

Introduction

The main objective of this report is to present a full situational audit of Jumbo Seafood and develop a strategic plan for the next 3 years. This report formulates with brief company overview, external audit, internal audit and strategic plan for the next three years. However, external audit includes PESTEL and Porter’s Five Forces, EFE matrix, and key success factors to analyze macro environment and industry dynamics of Jumbo. On the other hand, internal audit focuses on strategic position in the market, major target segments, IFE matrix, corporate portfolio and expansion strategies concerning the company’s centric approach and a comprehensive analysis of current resources and competences, and value chain analysis. At the same time, Strategic plan incorporates TOWS matrix, the development of a new sales target, SMART objectives, suitable strategies and a monitoring, control and contingency plan.

Company Overview of Jumbo Seafood

According to report of SPRING (2011, p.1), home-based seafood restaurant group “Jumbo Seafood” started its business operation in 1987 with an outlet but it has now six restaurants offering live seafood. This company has already introduced an outlet in Japan with its regular award winning signature dishes (SPRING, 2011, p.1). However, this company operates by the dedicated, skilled, dynamic, qualified and innovative F&B experts who take arrogance in dining experience to provide something different to the customer (Jumbo Seafood, 2011). However, the specialties of Jumbo Seafood restaurant are undoubtedly its phenomenal recipes that distinguishes it from many other businesses in the market – the most popular dishes include chili and sprinkle crab, mutton chops, toasted duck, fresh oysters and barbeque king prawns, barbeque scarlet tilapia, sattay and otaah, and many more.

Most importantly, it is arguable that most of its dishes are available at reasonable prices; for example, Hacked Chicken with Jelly Fish (which is truly popular amongst the customers) is available at $10.5, Crispy Fried Calamari with Highly Spiced Salted Pepper at $8.0, Crunchy Stuffed Crab Scrabble with Shrimp at $7.0, and Wok Fried Seafood Stuffed Beancurd at $22.0. To specify frankly, the offering of a high quality product line at relatively cheaper prices means that this remains as a competitive advantage of the Jumbo Seafood restaurant. However, the following table provides more information about the brand names under this group –

No Brands Further Information
1 Jumbo Seafood Jumbo Seafood established in 1987 as a humble family-oriented restaurant at the famous East Coast Seafood Centre
2 Yoshimaru Ramen Bar Offering real Hakata-style ramen in Japan since 1994
3 JPot JPOT tries to uphold the island’s long tradition of hotpot dining by serving 7 exquisite Singapore-style hotpot soup bases
4 Claypot Fun Highlights an outstanding menu of Cantonese-style to provide the youth a glimpse of the past
5 The Singapore Seafood Republic This inaugural branch for Singapore award-winning dishes to long-time favourites and serves more than 70 dishes

Table 1: Brand information. Source: Self generated from Jumbo Group (2011)

External Audit

The table no one has addressed the external opportunities of Jumbo Seafood:

External opportunities External threats
It has opportunity to expand its business other Asian countries like India, Bangladesh Existing competitors in the market
Increasing exports can give new dimension Volatility of the price of raw materials
It has scope to increase number of outlet in Singapore Natural disaster and unusual situation
Online booking system helps to boost the profit margin Environmental pollution

Table 2: External Audit of Jumbo Seafood. Source: Self-generated from Jumbo Seafood (2011)

Macro environment or PESTEL Analysis

Jumbo Seafood’s environmental factors has discussed by following way-

Political factors

The political situation of Singapore is stable enough to continue its operation all the islands and the government of this country is too co-operative in terms of decision-making to upgrade seafood segment.

Economic factors

 The economic environment of Singapore is prospective to Jumbo as annual imports from seafood sector are decreasing while exports are increasing. In the fiscal year 2008, total sales revenue of this company was more than $48 million (Jumbo Seafood, 2010).

Recorded seafood exports and imports from 2002 to 2006
Figure 1: Recorded seafood exports and imports from 2002 to 2006. Source: Seafish (2007, p.3)

Socio-cultural factors

 The general manager and other members of management team of this restaurant are highly qualified and experienced. However, this company has more than 700 employees and chefs to operate the restaurant in 12 locations across two countries and Ang Kiam Meng, who is the present general manager of the Jumbo, controls them.

Technological factors

Modern technology play vital role to increase its sales revenue, for instance, advance technology is important to ensure customer service, seafood quality, marketing and promotional activities, online booking system and production process.

Technological factors

Modern technology play vital role to increase its sales revenue, for instance, advance technology is important to ensure customer service, seafood quality, marketing and promotional activities, online booking system and production process.

Environmental factors

Jumbo Seafood is well concern about the marine environmental issues related with environment pollution, which can reduce the quality of live seafood. On the other hand, this company has to consider the natural crisis and other disaster, which can adversely affect the business; for instance, it may lose loyal customers due to recent Tsunami in Japan as tsunami caused radiation leaks. However, only 2% of total seafood imported from Japan and the government of Singapore has already banned on imports from this zone but customers are really over conscious about health issue and they would not be interested to take any risk. As a result, the marketer of Jumbo Seafood should arrange an integrated marketing communication program in order to build confidence of the customer regarding the product of this company.

Legal Factors

There are many rules and regulations provided by the government and the Agri-Food &Veterinary Authority (AVA) to control and operate seafood business in Singapore (Seafish, 2007). However, Jumboo Seafood always follows these rules in terms of seafood process, imports raw materials like fish and shellfish from any country but oyster from specific region, food production, and so on.

Porter’s five forces model for Jumbo Seafood

In this case, Porter’s 5 forces model has used to analysis of the competition, for instance-

Porter 5 forces model of competition for Jumbo.
Figure 2: – Porter 5 forces model of competition for Jumbo. Source: Self generated from David (2008)
  • Threats from new entrants: to enter processed seafood market, it should require not only huge funds but also expertise in particular areas; so, the threat of new entrants is very little;
  • Bargaining power of suppliers: As the supply of various seafood ingredients and other raw materials such as prawns, chicken, potatoes, golden cuttlefish, mushrooms, black pepper, Samble fish, sea coconut, patties, eggs, living reef, vegetables, other sea fishes are not available in domestic sources, so, outsider suppliers frequently ask high price in the supply process and enjoy greater bargaining power.
  • Bargaining power of buyers: Though Jumbo seafood offers distinctive menu with regular award winning signature dishes at comparatively lower price, but the Bargaining power of buyers is moderately high as they can switch on, as there are many seafood restaurant in Singapore.
  • Threats of substitute products: the risk of substitute products is too high as there are many substitutes products such as home made foods, Chinese foods, fast food, formal restaurant foods, healthy foods, organic foods and so on;
  • Rivalry among existing firms: Such relationship exists among most of the seafood restaurants in Singapore, for example, Long Beach Seafood Restaurant is the nearest competitor of Jumbo Seafood and other potential competition can also be seen among Seafood Paradise, Palm Beach Seafood Restaurant Pte Ltd, Chen Fu Ji, Palm Beach Seafood Restaurant, Fish & Co – The Paragon, and Great World City.

Key success factors of Jumbo

  • The management decorated the company considering the tourist’s choice, so, homely environment of this restaurant is suitable to attract target customer as well as tourists;
  • Professionalism of the chefs, and individual attention for each customer are also major success factor;
  • Creating loyal customer base by offering unique food menu and outstanding services;
  • Increasing reputation and customer satisfaction rates brings fruitful results;
  • The management of this company employs experienced workers to control supply chain management, prepare dinner and serve, and maintain customer relation;
  • Jumbo Seafood highly appreciates customer’s feedback and takes initiatives according to their choice.

External Factor Evaluation (EFE) Matrix

The EFE Matrix has assembled through two major dynamics namely opportunities and threats of Jumbo Seafood, which is an indispensable entity of Jumbo Group of Restaurants in Singapore. Here is the table of the EFE Matrix where potential opportunities as well as threats have displayed with a weighted score. (Lien, 2006)

Major External Dynamics Rating (1–4) Weight Weighted Score
Potential Opportunities:

Sporty atmosphere of Jumbo has the ability to attract more customers in abroad like Middle East, Europe and Western region

Have strong potentiality to attach with diversified businesses namely branding, management of human resources and marketing tasks

Since Jumbo is not a restaurant of serving pure Chinese foods, therefore it has easily marketed innovative foods in their outlets. For instance, Australian Lobster

4.0

2.0

4.0

0.04

0.02

0.02

Total = 1.00

0.16

0.04

0.08

Total = 0.28 or 28.0 %

Potential Threats:

Domestic market is not enough large to launch new outlets

Japan is one of the overseas transition area of Jumbo but recent earthquake and nuclear plant rupture would be cut off their overseas revenue

Continuous increase of outlet space rents is also threat to reducing their aggregate earnings

3.0

3.0

4.0

0.03

0.03

0.04

Total = 1.0

0.09

0.09

0.16

Total = 0.34 or 34.0 %

Table 3: The EFE Matrix of Jumbo Seafood. Source: Self Generated

Internal Audit

Value Chain Analysis of Jumbo

The purpose of these functions is to provide the customer a level of value, which exceeds the cost of the functions, thus ensuing in the profit margin for Jumbo Seafood restaurant. However, the following figure shows that it serves primary and supportive functions; for instance, primary activities are distribution to preparing foods, identifying customers’ needs and so on. At the same time, technological support, research and development, efforts of employees to co-ordinate the works are the supportive activities of Jumbo Seafood.

Value Chain Analysis of Jumbo Seafood
Figure 3: Value Chain Analysis of Jumbo Seafood. Source: Self generated

Resource and capabilities

No Place of Outlets Information about the outlets of Jumbo Seafood
1 East Coast Seafood Centre the first restaurant of the group founded in 1987 as a humble family-oriented restaurant at the famous East Coast Seafood Centre
2 Riverside Point This outlet has established in 2002 and it is the 4thoutlet
3 The Riverwalk Jumbo Seafood Gallery is situated in the center of the city along the Singapore River; this restaurant famous for Chilli and Pepper crab, Lamb Chops, Roasted Duck, BBQ King Prawns, and Fresh Oysters
4 Singapore Indoor Stadium Jumbo Seafood Waterfront located along the Kallang River
5 Japan -Shinagawa To expand the business, Jumbo Seafood joint-venture with the Singapore Seafood Republic

Table 4: Brand information. Source: Self generated from Jumbo Group (2011)

Internal Factor Evaluation (IFE)

Converse to the EFE Matrix, the IFE Matrix has designed through current strengths and weakness of Jumbo Seafood. Consider analogous tabular approach following is the analysis of the IFE Matrix of Jumbo.

Major External Dynamics Rating (1–4) Weight Weighted Score
Strengths:

Sporty atmosphere has build a strong and loyal domestic customer segment

During tough global recession Jumbo did not take any retrench program though they have passed a severe crisis of sufficient sponsorship1

Invention of central kitchen program have strengthen their product quality than prior2

Satisfactory revenue volume in the fiscal year 2009 that amounted US $ 51.0 million

Competent pricing strategy with available reward cards since 20043

Have adequate number of signature dishes those represents culture of the Singapore globally

3.0

1.0

4.0

2.0

2.0

4.0

0.1875

0.0625

0.25

0.125

0.125

0.25

Total = 1.00

0.5625

0.0625

1.0

0.25

0.25

1.0

Total = 3.125 or 312.50 %

Weaknesses:

Have sufficient human resources but Jumbo has not yet any efficient program to train them

Have not enough overseas outlets though have strong opportunity. For instance, only two branches in Tokyo since 2008

Have record to winding up of business entity for recovering investments4

4.0

4.0

2.0

0.04

0.04

0.02

Total = 1.0

0.16

0.16

0.04

Total = 0.36 or 36.0 %

Table 5: The IFE Matrix of Jumbo Seafood. Source: Self Generated

Strategic Position and Action Evaluation (SPACE) Matrix

In order to classify whether Jumbo Seafood has strategically positioned5, the SPACE Matrix is a comparative approach that strategically discovered Jumbo’s both internal position and external position in the light of firm’s internal and external strategic position. In this strategic comparative analysis, internal position of Jumbo involved in financial strengths (FS) and competitive advantage (CA). Alternatively, external position included environmental stability (ES) as well as industry strengths (IS)6.

Examination of Jumbo Seafood identified that the FS of Jumbo has enjoyed enough stable financial status and followed self-financing approach and the CA has enjoyed a collaborative atmosphere with online order availability. On the other hand, the ES has also adopted required recent technological support with larger number of product line for instance; Jumbo has available of more than 260 items for dinner. Finally, the IS has already on the way of recovering financial crisis since of global recession but their large number of human resources felt absent of proper training. For more clarification, here is the SPACE Matrix chart of Jumbo Seafood. (Lijie, 2010) and (Quek, 2010)

Jumbo Seafood SPACE Matrix Analysis.
Figure 4: Jumbo Seafood SPACE Matrix Analysis. Source: Self-Generation

Grand Strategy Matrix

In accordance with above Grand Strategy Matrix as well as considering company profile of Jumbo Seafood, it has confidently affirmed that Jumbo has now tried hard and soul to recover their liquidation crisis as well as associate weaknesses. On behalf of this argument, following are the key issues that assembled strategic profile of Jumbo (Quek, 2010).

From the beginning of their journey have earnestly delivered availability of signature Singapore food items where more than 70 food items has available containing meat, fish and vegetables and many more innovative food choices like Australian lobster.

 Jumbo Seafood Grand Strategy Matrix
Figure 5: Jumbo Seafood Grand Strategy Matrix.Source: Self generated

Singapore is a small inhabitant region therefore, other than tourists there have little prospect to expand customer volume. For this reason, Jumbo has aspired to open international branches and in 2008, they have already open two brunches in Tokyo and additionally, have planed to open four new outlets in Osaka.

In the rivalry status, Jumbo has fond of making collaborative association with their competitors.

Finally, not only in presenting innovative foods, Jumbo has also expert to attach with the modern technology through offering online order facility but high inflation rate as well as high rental costs make considerable intricacy that fluctuated their financial stability.

Strategic plan

SMART Objectives

  • Jumbo Seafood will reset its marketing objectives to concentrate on its product development strategies by next three years. It expects to boost its yearly profit by 25% within next three years; so, it must increase budget for marketing activities by 10% each year from 2012 to 2015;
  • Jumbo will be spending 0.5% of its operating profit in market research to develop customer base;
  • It missions to boost the budget for promotional tools by 5% within 2013;
  • Finally, Jumbo would open four new outlets in different place within 2014.

TOWS Matrix of Jumbo Seafood

Strengths

  • Jumbo Seafood has outstanding brand awareness, goodwill and quality image which helps to increase sales revenues;
  • It offers healthy seafood products and high quality consumer services
  • Competitive price of award wining dishes and other regular items;
  • It has websites to introduce online booking system for customers;
  • It has skill and efficient employees, chefs and administration.

Weaknesses

  • The database of this company is not provide sufficient information to the customers;
  • The form of online booking is complicated to the ordinary customers;
  • Lower expansion rate in local and international market
  • Sarahsan (2010) reported that Jumbo serves heavy testy food the service quality and atmosphere of the Riverwalk outlet is not good enough as the employees of this outlet are in hurry at lunch hour.

Opportunities

  • Jumbo Seafood has long experience to operate the business as a market leader in seafood restaurant industry;
  • It has bright prospect in international market as it has strong capital and resources;
  • New outlets in Singapore may brings further success;
  • Increased consumer interest on new items of seafood.

Threats

  • Local competitors those offer processed seafood are the main threats for Jumbo Seafood;
  • Environmental pollution due to oil spill or radiation leaks for tsunami;
  • In addition, threat of new entrants, risk of terrorist attacks, threats of substitute products and so on.
Strengths – S Weaknesses – W
Opportunities – O SO – Strategic Option
  • Jumbo Seafood should horizontal business expansion strategy
WO – Strategic Option
  • The marketer of Jumbo Seafood concentrate more on the blog writing, and company related texts;
  • It should try to upgrade the key functions of e-commerce site
Threats – T ST – Strategic Option
  • Jumbo Seafood should more focus on IMC campaign to aware the customer regarding its items
WT – Strategic Option
  • Jumbo Seafood should change its present strategies to minimize business risks;
  • It should utilize technology in more sectors

Figure 6: TOWS Matrix of Jumbo Seafood. Source: Self-generated from Weihrich (2010)

The marketing mix concept

According to the view of Kotler and Armstrong (2006), it is the set of controllable, tactical marketing tools, which blended by the company for producing the products in accordance with the target market, therefore Jumbo incorporates the following features-

The 4Ps for Jumbo Seafood
Figure 7: The 4Ps for Jumbo Seafood. Source- Self generated

This report contrates on the marketing mix as Kotler and Armstrong (2006) pointed out that 4Ps can be better applied by 4Cs to buildup long-term customer value, as –

4Ps 4Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication

Figure 8: The 4Cs for Jumbo Seafood. Source- Self generated

Ansoff Matrix for Jumbo Seafood

Johnson, Seholes & Whittington (2008, p.351) stated that Ansoff matrix indicates to a strategic growth theory for starting up or acquiring business outside the current markets. However, the following figure shows suitable strategy of Jumbo –

 Ansoff’s model for Jumbo Seafood
Figure 8: Ansoff’s model for Jumbo Seafood. Source- Self generated from Kotler & Keller (2006)
  • Market penetration: market penetration is effective strategy while Jumbo Seafood expand its business in Singapore with its regular and award wining recipes because it should not require any internal modification of served foods for gaining new customers;
  • Market development: this strategy would be suitable for Jumbo if this company enters in a new market with present food menu as it has brand value for offering tasty seafood;
  • Product development: Here, the food retailers like- Seafood Paradise, Palm Beach Seafood Restaurant Pte Ltd, Chen Fu Ji, Palm Beach Seafood etc. tend to engage in innovative tasks for delivering new delicious items to for replacing the present ones;
  • Diversification: It involves delivering completely new dishes to new customers, for instance, introduction of a new healthier fried prawn with coconut for the children, or new chili crab with vegetables.

Formulation of strategies

Jumbo Seafood can consider number of strategies, like –

International strategy

Jumbo Seafood it should consider the following factors to be a successful player in the global market though this company is operating with its award wining regular items in few countries –

  • Issues related with of production
  • It should consider demand conditions as consumer’s demand is another chief strategic approach to create large customer base
  • It should related and supporting industries.
  • The strategy, structure and rivalry position of Jumbo Seafood.
Porter’s Diamond Model for Jumbo Seafood
Figure 9: Porter’s Diamond Model for Jumbo Seafood. Source: Self generated from Porter (2004)

Co- operative strategies

By considering existing plans and market situations, Jumbo Seafood can extend its operation by following many types of co- operative strategies like-

  • Joint- ventures with competitors could bring huge success for the company, for instance, Jumbo Seafood can contract joint venture agreement and enjoy benefits by the sharing assets with nearest competitors like Long Beach Seafood, Seafood Paradise, Palm Beach Seafood Restaurant Pte Ltd, and so on. However, Jumbo Seafood has already joint-venture with the Singapore Seafood Republic to expand its operation in Japan;
  • By composition of strategic alliances, Jumbo Seafood can combine the resources, capabilities and core competencies with other Seafood restaurants for gaining the mutual interest in designing, distributing and producing food items.

Business- level strategy

Porter’s generic strategy for Jumbo Seafood
Figure 10: Porter’s generic strategy for Jumbo Seafood. Source: Self generated
  • Cost Leadership: By implementing cost leadership strategy offering the lowest price to the customers, Jumbo Seafood can enjoy good market share and growth in the global market;
  • Differentiation: Jumbo Seafood can follow horizontal differentiation strategy by delivering unique items with new features to the target customers;
  • Focus: It can achieve high market share and growth by focusing on one or more market segments.

Implementation of the strategies

Jumbo Seafood can implement the above projected and proposed strategies by the following dimensions-

Organizational Chart and control

The organizational Chart of Jumbo Seafood is very simple, which can represent following way –

Strategy and structural growth pattern of Jumbo Seafood
Figure 11: Strategy and structural growth pattern of Jumbo Seafood. Source: Self generated Hitt, Ireland, Hoskisson, (2001, p.445)

Jumbo Seafood mainly follows the following functional structure where it has limited staff for research and marketing department, financial management, new product development to offer differentiated in products and HR department. However, figure no eight shows the functional structure for implementing differentiation of Jumbo Seafood –

Functional structure of Jumbo Seafood
Figure 12: Functional structure of Jumbo Seafood. Source: Self generated from Hitt, Ireland, Hoskisson (2001)

Strategic leadership

Following figure demonstrates strategic leadership and management process of Jumbo Seafood as this company such issues for anticipation, envision and flexibility of the whole planning as –

Strategic L&M process of Jumbo Seafood
Figure 13: Strategic L&M process of Jumbo Seafood. Source: Self generated from Hitt, Ireland, Hoskisson (2001, p.488)

Corporate entrepreneurship and innovation

Jumbo Seafood has more than 700 committed employees, efficient operating team, management capability and experienced R&D who are responsible to bring success with handsome revenues, net income and reputation for outstanding products and services. However, they have to implement the above strategies by considering environmental issues and selling healthy seafood, expanding the business in suitable location.

Evaluation and Control

The marketer and the management of Jumbo Seafood should evaluate the performance of the outlets in the national and international market and compare the difference in profits level quarterly in order to avoid any accumulative losses and to take prompt corrective actions. As a result, managers must arrange quarterly meeting with the employees of outlets and periodically visit the restaurants to assess the performance of the employees and their contribution for gradual improvement, sales position, current financial condition, which would help to identify the operational barriers and address any negative trends to bring future success.

On the other hand, the marketer of the Jumbo Seafood should identify the uncertainty in terms of return on investment capital, it should categorize net profit for each outlet to separate between profitable and non-profitable stores, and marketer should survey the market frequently to collect feedback from the customers. In addition, the managers can review the strategies and market survey reports to widen the features of its food items in order to control the company with innovative and diversified product line.

Recommendations

Like other companies, Jumbo Seafood has faced many challenges, as Seafood sector is not fully free from problems. Therefore, this report provided several suggestions to improve its position and implement the strategies –

  • Jumbo Seafood has enough opportunity to implement co-operative strategies,
  • It can ask bank loan to establish new outlets in international market;
  • It should invest more for promotional activities;
  • However, it should consider the feedback of the consumers and change the policies accordingly;
  • It should reduce operating costs to increase profits
  • Finally, this company should take the brand development program

Reference List:

David, F. (2008) Strategic Management: Concepts and Cases. 12th ed. London: Prentice Hall.

Johnson, G. Seholes, K. & Whittington, R. (2008) Exploring Corporate Strategy: Text & Cases. 8th ed. London: FT Prentrice Hall.

Jumbo Group (2011) About Jumbo. Web.

Jumbo Seafood (2011) Company Profile: Jumbo Seafood. Web.

Kotler, P. & Keller, K. L. (2006) Marketing management. 12th ed. New Jersey: Pearson Prentice Hall.

Lien, W. (2006) Jumbo seeks to replicate success overseas. Web.

Lijie, H. (2010) Jolly Jumbo. Web.

Porter, M. E. (2004) Competitive Strategy. Export Edition. New York: The Free Press.

Sarahsan (2010) JUMBO Seafood: The Big Name in Seafood. Web.

Seafish (2007) Seafood Export Profiles: Singapore. Web.

SPRING (2011) Jumbo Seafood Group of Restaurants: Company Profile. Web.

Quek, E. (2010) Seafood central. Web.

Weihrich, H. (2010) The TOWS Matrix — A Tool for Situational Analysis. Web.

Footnotes

  1. Li-en 2006.
  2. Quek 2010.
  3. Lijie 2010.
  4. Lijie 2010.
  5. Competitive, Defensive, Conservative or Aggressive.
  6. Nábrádi.