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1. Discuss the resources and capabilities of Wil’s Grill and identify its core competencies in the street food market segment using VRIN framework.

VRIN Analysis of Wil’s Grill Resources and capabilities of Wil s Grill: Clean Food @ good Price: John understood the consumer’s interest and preference towards the “Clean food”. Most of the dishes in Wil’s grill were prepared instantly and the raw materials were sourced from Local farms and this encourages the students as well as the people at the Community events to spend more at Wil’s Grill. Through Survey also he confirmed that consumer’s are willing to spend more money if it is a Clean Food. But in Wil’s Grill John through the Local Connections and Not focusing on his Profit in the Beginning He achieved the Clean Food with a reasonable price. Brand Name : Wil's Grill since they've begun has picked up a decent picture for their image. Amazing reviews from their local websites, explicitly Facebook, are watched and individuals from their zone more often than not prescribes the place. The explanation for this is their genuineness, straightforwardness, consistency, and quality. Relationship with Employees: John always makes it to a point that all employees that he hires whether permanent or temporary is treated fairly. He firmly believes that in doing so these people would be willing to work for him again. This in turn acts the employees to serve the customer well and faster without Compromising quality.

Location: Born and brought up in Arizona makes john knowing where to locate his business is one of the strengths of the company. He is also able to locate the local events and able to capitalize the moment by doing small food events with his “Clean food” movement. He is also able to scrutinize the best places to procure the materials. Technological Advantage: Generally the Street Food vendors not very keen on developing the website and mobile app for this restaurant. Wil’s Grill has a competitive advantage in having a dedicated website telling the best local farms where the procurement is done. It also has mobile app, the strong penetration of smart phone technology will gives them a competitive advantage if they started using more effectively.

NonResource/capability

Valuable

Rare

Inimitable

Implication Substitutable

Clean Food

Yes

Yes

No

Yes

Temporary Advantage

Yes

Yes

Yes

Yes

Competitive advantage

Yes

Yes

No

Yes

Temporary advantage

Employee Involvement

Yes

Yes

Yes

Yes

Competitive advantage

Portability

Yes

Yes

No

Yes

Temporary advantage

Yes

Yes

Yes

Yes

Competitive advantage

yes

Yes

Yes

Yes

Competitive Advantage

No

No

Yes

temporary advantage

Clean Food with Good Price

Versatile ( Catering Two segments)

Understanding of Local Supply chain

Mobile App & Social Media Presence

Customer Service & loyalty Yes

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2. What are the strengths, weaknesses, opportunities and threats for Wil’s Grill? Identify various strategic options for Wil’s Grill by creating a SWOT matrix. SWOT Analysis Matrix – Wil’s Grills ▪ ▪

Strength, Weakness, Opportunities, Threats Strategic Options

-

Oppurtunities Clean Food Motivated Customers High margin Consistent business

Strengths - Focussed vision aligned with market trend - Use of Technology - Publicity through events - Quality > Presentation & Quantity - Excellent reviews & Awards - Variety of foods - Zero debt

-

Continue clean food with good Quality Match product to customer preferences Match customer demand Venture into new market Extensive promotions & marketing Coupons & Discounts Forecast customer prices for high profits

Weakness - No permanent office - No standardized prices - No permanent employees - Limited budget for new kitchen equipment

- Fix a permanent office - Hire more labour & manpower

Wil's Grills SWOT Analysis with Strategic Options

- Year-round oppurtunities to increase sales

- Use high margin incomes to boost profits

Threats - New entrants - Presence of large, well established competitors - Changes in customer trends & preferences

- Maintain price & Quality irrespective of competitors. - Use technology for latest trends - Use reviews as marketing strategy - Update products customer trends

- Improve business match competitors

with

changing

strategies

to

- Hire focussed marketing managers to attract more potential customers

- Not well-established in the local catering market

Opportunities: • Various surveys conducted in the US indicated a growing interest in ‘clean food’ influencing customers’ food and beverage purchase decisions. John, as the owner of Wil’s Grill believed that demographics and psychographics of people in Northern Arizona aligned well with the national clean food movement. • According to the survey conducted by the NAU marketing research students, people of Northern Arizona were more eager to pay a premium price for clean food and prefer local caterers who sourced local foods. Survey statistics revealed the following: - 78% of the respondents are willing to pay an additional of $1 to $6/ person for clean food. -

63% of people indicated that locally sourced food would motivate them to purchase from that caterer.

• Catered events could have margins of up to 40%. Catering opportunities were available year-round in the Northern Arizona market.

Threats : • • • •

Increasing food trucks and presence of new entrants that builds competition in fare Large competitors (like Big Foot BBQ, Satchmo’s etc) in the catering industry Well-established competitors (in business for ~20 years) in the catering business Fast changing trends in the market and preference of the customers

STRATEGIC OPTIONS: Strengths Strength & Opportunities ▪ Since the trend ▪ Continue to serve nowadays is living ‘clean food’ while towards a healthy maintaining the lifestyle, Wil’s Grill quality of the food ▪ Continue to match focused on selling ‘clean food’ to attract their product customers according to the ▪ They have a website preference of their exhibiting their ‘clean customers food’ menu, a mobile ▪ Wil’s Grill should be app and a social flexible in order to media presence meet the demand and through Facebook preference of their target market ▪ Wil’s Grill increased its exposure to ▪ Wil’s Grill could customers by slowly introduce their participating in a lot food to a new market of street food events in order to increase nearby Northern popularity and Arizona. customers ▪ They could use the ▪ Prioritizing the quality of the foods served, excellent reviews for more than the their advertisements presentation and and promotional ads quantity in the catering market ▪ They could add more ▪ Wil’s Grill received excellent reviews food choices for their from local writers, catering services food critics and ▪ Use their website, customers and was mobile app and featured in July 2015 Facebook page to issue of Flagstaff advertise their Business News catering services and promote new food ▪ They received referrals from caterers offerings ▪ Wil’s Grill could take for special foods that Wil’s Grill was advantage of their known for – smoked website, mobile app meats and barbeque and social media to ▪ The Management, as give coupons and much as possible, discounts to attract tried to maintain their new customers and zero debt increase their loyal ▪ Wil’s Grill sells customers variety of foods like

Strength & Threats ▪ Wil’s Grill should maintain its price or lower it if possible but should not adjust the quality of the foods they serve to match prices with other competitors ▪ Wil’s Grill could maximize the use of their website, mobile app and social media account to get updates about latest trends and conduct brief online survey to know the latest preference, opinions and suggestions of consumers to improve their product and service ▪ They could use the excellent reviews that they received and their participation on street food events as leverage on the new entrants. They could create a good marketing strategy out of it ▪ Due to fast changing trends, Wil’s Grill could replace some of the foods that they are offering with choices that customers prefer more. This they could find out by conducting surveys or suggestions from customers.

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barbeques, smoked meats, marinated chicken, sandwiches, veggies kabob, Mac & cheese etc

▪ They could also take advantage of the survey that was conducted to forecast the price customers are willing to pay and meet their demand.

Weakness Weakness & Opportunities Weakness & Threats ▪ The Management did ▪ Wil’s Grill should ▪ Wil’s Grill could not establish a consider having a somehow mimic and permanent office permanent office if improve the business they will pursue strategies of well▪ Lack of standardization in the catering services to established catering prices accommodate clients services in order to match with its ▪ Lack permanent ▪ They should also hire employees more employees since competitors catering services ▪ Wil’s Grill should hire ▪ Limited budget for new kitchen would require more people that will focus equipment labor and manpower and help John on the ▪ Wil’s Grill is still not marketing aspects of ▪ Since catering well-established in the opportunities are the business to local catering market available year-round, establish Wil’s Grill could use attractiveness to this as a way to potential customers improve their catering services and later on, could establish a name on the catering Industry ▪ Since catering could have margins of 40%, venturing in this industry could help Wil’s Grill to afford new kitchen equipment and other things like logistics and maintenance of old equipment. This could also increase the business’ income in the long run.

3. You have identified the resources, capabilities and core competencies of Wil’s Grill developed in the street food market segment while answering question 1. Now, discuss the transferability of those resources, capabilities and core competencies to the catering market segment in terms of the following: a) Which of those resources, capabilities and core competencies are transferable to the catering segment? The following resources, capabilities and core competencies can be transferred to the catering segment: Clean Food: Wil’s Grill had a strong focus on clean food at reasonable prices. Suppliers: Relationships that John had established with the local supply chain gave them an competitive advantage in the external sector. Hence, the suppliers Wil’s Grill have can be transferred to use in the Catering segment effectively. Brand Equity: Catering business needs more familiarity of the brand name which needs to be worked upon as most of the respondents of the survey had never heard of Wil’s Grill. Pricing strategy: Since, the catering segment is not as price sensitive as street food consumers, hence the pricing strategy of street food business can be transferred to catering industry by slightly increasing the prices to increase profit margins. b) What gaps exist in terms of resources, capabilities and core competencies if Wil’s Grill enters the catering segment? Employee Involvement In the current scenario, employees in street food business typically worked for normal hours, while during events occasionally they are even flexible to work for ~18 hours, but while expanding to catering business which requires routine high working hours, the same employees might find it difficult to work. This gap exists when Wil’s Grills enters the catering segment.

Customer Preferences In the street food business, Wil’s Grills understands the customer preferences through the “clean food” movement. It also knows the serving mass i.e mostly students and public events. But the same can’t be predicted for a catering business since it is of a large scale and mostly premium foods are favoured in parties and functions than “clean foods”. c) How will Wil’s Grill acquire and or/develop the missing resources, capabilities and core competencies if it decides to enter the catering segment? Employee Involvement To develop the missing core competencies with respect to employee involvement,

1) Hire hotel management students/trainees who have prior knowledge and experience with catering industry. 2) Hire more labours and manpower, and schedule optimized work hours equally so that the employees have utmost job satisfaction. Customer Preferences To develop the missing core competencies with respect to customer preferences, 1) Understand the customer demand and ask more details pertaining to the event and crowd’s eating preferences. 2) Suggest new variety foods to attract the guests so that they will refer to future events. 3) There is always be a scope of improvement, to capitalize this, obtain feedback from customers after the event and try to work on the suggestions provided. 4. Based on the analyses done for the previous questions, advise Wil’s Grill whether it should expand its operations either by entering the catering market segment or by doing something else. Computing the future cash flows considering both the businesses, we find that the NPV of Catering Business is higher than expanding street food, hence wil’s grill must enter the catering market segment

BUSINESS DECISIONS

INVESTMENT

PROFITS2017

PROFITS2018

PROFITS2019

NPV

Expand street food

-9000

33655

44550

58300

100106.1

Enter into catering

-25000

40425

59675

84425

121583.3

It is mentioned in the case that entering both the segments revenue tends to grow in the future, thus it appears as projects with growing perpetuity. But, when considering proportional costs (27.5% of Revenue) in the respective years, Entering into catering segment even with proportional cost it looks more attractive business to get into. But in reality the higher revenue yields more profit because of fixed costs.