Fundamentals of Management
Fundamentals of Management
As the president of Taco Rocket, James needs to define the expansion issue clearly. Poignantly, he has to come to terms with the idea of if the expansion is necessary. In other words, he is supposed to be aware whether he is ready to expand his business right away, or give it some more time. In particular, he needs to know what the decision includes. For example, does he need to buy existing restaurants, is he going to merge with another chain, should he franchise or simply buy properties and build new ones? Upon planning to go ahead with the expansion, he will then have to gather as much information about the restaurant business as possible. This will force him to research on which cuisine is a favorite with the customers and if the target customers in locations he has in mind have different preferences.
While at it, he needs to consider the variations in price of the competitors against those of Taco Rocket as well as the different demographics in terms of gender, income levels, race and cultural traditions present. He might have to find out the reasons why an individual chooses certain meals or where to eat. Thereafter, he will now seek to bring his top managers including branch managers for a brainstorming session. Their agenda should be mutually agreed. With James as the facilitator, the team has to come up with many ideas on how to expand the business. Each suggestion should be noted under a relevant category after which all of them are prioritized. An action to be taken has to be made and an appropriate timescale given to enable James to do a follow up.
He will then have to sit down and carefully evaluate each suggestion by weighing its advantages and disadvantages while consulting where applicable. For example, an analysis of the company’s balance sheet would help him decide on whether to merge, acquire or build new outlets. At this point, the best option under all categories has to be picked. Having made the right decision, James will now be expected to explain this to his board, employees and shareholders if any. Using the agreeable timeline, he will then monitor the progress of the project and follow up until it is successfully implemented.
James will first have to decide on which collection method is suitable. He can go out and gather the information himself or he could delegate that task to his juniors. Importantly though, they all have the same mission to accomplish. Once in the field, the information can be collected either by conducting interviews, filling-in questionnaires, reviewing documents of customer feedback or even through observation. Taco Rocket customers and other potential ones should be targeted. This should be done professionally and where the interaction is face-to-face, the respondents should be allowed to ask questions. They should also be made aware of how their identities will not be revealed to avoid them being uncooperative or glossing over the facts for fear of victimization.
All the information gathered is then collected for careful analysis and consideration. During this stage, James needs to involve other senior managers in order to get their opinion on the results accumulated. From the feedback, he can now be able to tell what has been the secret to his company’s success. A great deal of time should be given to feedback from his loyal customers since they are the ones who have had a first hand experience of the services and types of meals on offer. They therefore offer valuable information that will be useful in the future. Where they disagree, he is allowed to make an executive decision.
Buying of a local competitor is the acquisition strategy. James now owns it. This could prove beneficial because, if the competitor was having a variety of dishes on offer, it supplements the menu now available. This would attract customers who do not particularly like a Mexican- food only restaurant. In addition, it would save him valuable time and money that would have been spent in construction of new premises while affecting time schedules due to supervision of the projects. The cash saved can be budgeted for other more pressing issues or ploughed back into the business for further expansion. However, one key challenge is risking his company’s reputation if the quality and standards of the acquired outlet are low.
By starting to offer a new Fifth Degree Burrito, James is diversifying Taco Rocket’s menu. This will increase revenue streams because many people love burritos and thus there will be a surge in the number of customers leading to more sales. However, the introduction of this new product could potentially lead to a loss of customers especially those of Mexican descent who view this like an invasion of their culture and had associated Taco Rocket as predominantly theirs. This would be a strong challenge facing James indeed.