Literature Review: Business Planning For A Restaurant In Bangkok, Thailand

The Importance of Business Planning

Thailand as a country is rich in culture which a great source of tourist attraction and consequently, the tourist attraction becomes a great source of business opportunities. In order to make use of this opportunity, we wish to start a restaurant in Bangkok and to finance this project, we will use banks, angel investors as well as family and friends’ contribution. This paper is primarily aimed at doing a literature review about the plan.

1. What kind of restaurants performs well in Bangkok?
2. What is the historical trend of market indices and stocks for trading in this industry- hotel and hospitality?

1. To determine a list of types of restaurants as well as a rating of how each of these restaurants performs in terms of importance and how well Bangkok performs on each restaurant type to allow for construction of an Importance Performance Matrix (Analytical tool 1) for analysis in which the information or data will be collected through Online Surveys (Data collection tool 1).
2. To determine the trend of stock market volatilities for trading and investing in restaurant (hotel and hospitality industry) using Conditional Volatility or Mean-Variance Relation Analysis (Analytical tool 2) on a Historical Data (Data Collection tool 2).

According to Baliga & Rodrigues (2015), making a business plan is something that is endorsed and supported by current literature, support urgencies of government, universities as well as venture capital firms. Business planning is the most recognized phase of pre-start-up planning. Eckert et al. (2016) states that a business plan is a document that is written that try to explain the present state as well as the pre-supposed future state of a firm or any given organization. Though business plans are very ambiguous, there exist a research gap on the reason as to why new companies write business plans and the impact of these business plans on the particular organizations or companies (Castrogiovanni, 1996).  In various disciplines, scholars have shown the desire in determining factors that facilitate the spread of common practices. Studies that are concerned with determining diffusion of planning mostly put much emphasis on the rational aspect of planning (Jimenez, 2019). This perspective has an implication that business plans are liable to yielding good performing and efficient companies. According to Jimenez (2019), business planning has significant practical benefits to start-up organizations. For instance, Jimenez (2019) findings showed that proper business planning results in profits for an organization in addition to making the organization competitively advantaged which has higher chances of leading to long-term survivability of that particular organization. Some empirical researches on the business planning outcomes have been inclusive with some researches holding that business planning helps in the growth of new companies (Mulyaningsih et al. 2021). On the other hand, the findings of Bravi et al. (2021) suggests that some business planning fails to lead to the growth and success of a company. A business plan gives signals to potential investors and venture capitalists that a particular business is worth consideration and investment. For instance, there are some studies that postulates venture capitalists make their investment decisions from the business plan’s first few pages (Zacharakis & Shepherd, 2001).

According to Lumpkin et al. (1998), an education literature and entrepreneurship assumption is that business plans lead to an improved firm performance. However, this is not always the case because reviews on business planning made by Castrogiovanni (1996), Delmar & Shane (2004) as well as Ford et al. (2003) all unanimously agrees that association between company performance and plan of the business is subject to doubts. What this implies is that business planning does not always leads to improved firm performance. As a result, there exist scepticism regarding the value and importance of business plan writing because many of the successful start-up businesses did not use business plan (Kiznyte et al. 2016). A good example is Calvin Klein, Microsoft and Dell Computers. Due to the lack of empirical evidence to support benefits of using a business plan, then organizations risks being misdirected about the importance of business plan making (Bravi et al., 2021).

Mixed Results for Business Plan Impact

Importance Performance Matrix is an important tool of analysis that provides insights to help in the customer satisfaction management (Mohebifar et al. 2016). It is a two-dimensional analytical technique that is based on importance and performance of customer satisfaction (Mohebifar et al. 2016). It is a 2 by 2 matrix and it can be on a point scale for instance, 9- point scale. In this case study, let analyse a 9-point scale.

Does performance objective for each product or service meet the following?

Order-winning objectives:

• They are the core factors of competitiveness because they offer vital advantage with consumers.
• Offer a vital advantage with a significant number of customers because customers always consider them.
• Usually considered by customers because they offer an advantage that is useful to most customers.

Qualifying Objectives

• Have to be at least up to industry standard that is good
• Have to be around an industry standard that is median
• Have to be within close range of the rest of the industry.

Objectives that are less important

• Not usually come into the mind of customer but in the due future, it can become important.
• Very rarely does it cross in the considerations of customers
• Never come into considerations of customers.

Is the achieved performance in each of the performance objectives;

Ahead of competitors:

• Considerable consistently better than the nearest competitor.
• Compared to nearest competitors, it is consistently clear.
• Compared to nearest competitor, it is marginally better.

Same as competitors

• Compared to most competitors, it is often marginally better.
• About the same as most competitors
• Compared to primary competitors, it is often within the striking distance.

Worse than competitors

• Usually marginally worse than most competitors.
• Usually worse than most competitors.
• Consistently worse than most competitors.

Figure 1: Importance-Performance Matrix

Online survey is a primary method of data collection which entails collecting data for the first time whereby surveys are created for instance in Google forms and then sent to the study participants. Online surveys have their own unique strengths and weaknesses. Let start with the strengths and in this case a global reach. Due to the technological advancement and increased use of internet, then online surveys have a greater advantage of reaching to a large number of target audience at once (Evans & Mathur, 2018). The survey is getting applied by both B-to-B and B-to-C and it has also made it possible for Marketing Research and Customer Relationship Management to connect (Evans & Mathur, 2018). Another strength is that online surveys are flexible for instance, the surveys can be conducted via emails or websites. Also, the language is flexible as one can change the survey to language that they understand (Evans & Mathur, 2018). Another strength is speed and timeliness whereby it can be performed in a manner that is time-efficient minimising time taken for it to gets into the field and this is because internet is very speed and has a large global reach that allows real time access to the survey despite geographical locations (Evans & Mathur, 2018). Furthermore, online surveys are convenient in which respondents can respond to the questions at the convenience of their time and some online surveys gives chance respondents to start the survey and return later to finish (Evans & Mathur, 2018). Additionally, online surveys have ease of data entry as well as analysis whereby is it easy for participants to fill the survey and the responses to be easily tabulated and analyzed (Evans & Mathur, 2018). Another strength is the diversity of questions whereby questions can be open-ended, multiple choice, scale. Another significant strength is that online surveys are cheap and cost effective.

However, online surveys also have important weaknesses that need to be considered as according to Evans & Mathur, (2018). One of the weaknesses is whereby respondents lack experience of online. Even though the population is becoming highly sensitized to internet, there are still chances of survey difficulties and this might be due lack of familiarity with survey internet protocols (Evans & Mathur, 2018). We also problem of variations in technology in terms of the type of internet connection as well as configuration of respondent’s computer (Evans & Mathur, 2018). Respondents may also find it difficult to answer questions because it is self-administered. This implies that instructions have to be extremely clear to prevent frustration when answering the questions (Evans & Mathur, 2018). Another weakness is about impersonal whereby there is no human contact preventing in-depth interviews compared to face-to-face interviews. We also have security issues whereby the respondents are concerned with the privacy and confidentiality of the information they will provide (Evans & Mathur, 2018). Furthermore, Evans & Mathur (2018) postulates that online surveys have a low response rate and this might be due to issues such as respondents’ issues of privacy and confidentiality.

Using the Importance Performance Matrix

From various literature reviews conducted, the conditions suitable for using online surveys include: when the geographic coverage needed is large and wide, when the sample size required is large, when there is frequent conducting of survey research, when multimedia approach is required, when timeliness is important, when interaction of the interviewer and the respondents is not required, when the goal is longitudinal comparisons (Evans & Mathur, 2018).

After performing Importance-Performance Matrix analysis to determine the performance of restaurants in Bangkok, it will be important to perform predictive analysis using historical data of restaurants to determine how the future trends of their performance. This will involve analysing their market indices to determine the rate of volatility which will in turn affect the investment decision. As it is known, stocks are highly volatile and the purpose of this analysis will be to help show the shareholders and angel investors that the restaurant business is less volatile in order to boost their morale of increase their contribution in the business.

According to past literature reviews, theories on asset pricing stipulates a mean-variance relation that is positive however empirical evidence is inconclusive with some literatures stipulating positive relation (Pastor et al., 2008), negative relation (Brandt & Kang, 2004) and mixed relation. There have been various arguments developed to provide an explanation for weak risk-return trade-off such as conditional volatility filtering technique (Harvey, 2001) and investor sentiments (Wang, 2018). For instance, according to Yu & Yuan (2011), investors have high chances of misestimating return variance and thus prefer taking long to short positions. This has an implication that an elevated level of retail investors over high-sentiment periods would disrupt the positive mean-variance relation while over low-sentiment periods, there will be observation of the positive mean-variance relation that is supported by their empirical findings (Wang, 2021). This literature can be extended to mean-variance relation during different time periods within trading days and specifically distinguishing trading hours (intraday) and non-trading hours (overnight) (Wang, 2021). The finding by this extension is that the mean-variance relation significantly depends on whether the market is open or close whereby there is a positive mean-variance relation when the market is closed and that this positive mean-variance relation is distorted when market is open (Wang, 2021). This shows significant volatility in a given trading market.

This is a secondary data collection technique and secondary data sources are sources that provide an already collected data to be used for analysis. Example of secondary data sources include journals, articles, internet, government publications. Historical data is one collected about events and circumstances of the past that pertains a particular subject (Simoncelli et al. 2020). This data is automatically or manually collected within a company and sources of historical data include log files, project documentation, press releases, financial reports, emails, product documentation (Simoncelli et al. 2020). This data collection tool is important because it allows a researcher to perform research on topics that could be studied in no other way, this data collection is allows researcher to study evidence from the past. Additionally, historical data is suitable for trend analysis. However, this data collection technique has its disadvantages. For instance, it does not have control over external variables, difficult to control for internal validity threats, interpreting the data sources can be biased and it is also time consuming (Simoncelli et al. 2020).

Strengths of Online Surveys

Table 1: Conditional Volatility Analysis

From the beta values above, they are all positive and this shows that the mean-variance relation is significantly positive in all cases. Clearly, in our case study, the mean-variance relation does not vary between being positive or negative at night or daytime and hence showing that it is constant contrary to the mean-variance relation theory about stock returns. Clearly, these results indicates that Thailand stock markets are less volatile which is the required results for this study. Due to the stability in the stock markets, investors, shareholders and angel investors will be willing to invest and contribute for the establishment of the restaurant in Bangkok.

Let assume a survey was conducted with the main aim of determining the quality of services and foods currently offered by the already established restaurants. This online survey result will help in identifying the existence of a market gap or business opportunity for opening up a top-quality restaurant. We will assume or simulate the results of the survey in order to show the Importance Performance Matrix analysis.

Table 2: Importance-Performance Scale

From the survey results displayed in the Importance-Performance matrix above, restaurant security is an issue that requires urgent intervention and this presents a gap of business opportunity for opening up a new restaurant that will significantly focus on the security. In addition, the survey results shows that quality of the products as well as services and customer satisfaction both requires improvement. This also presents a business opportunity whereby the new restaurant will ensure that it provides top quality products, services and high customer satisfaction. In addition, the matrix shows that the affordability of services in the current available restaurants is appropriate.

References

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