What are the advantages and disadvantages of owning your own business?
As a requirement for the completion of this portfolio, you should first decide on a type of business you have or would potentially like to start up in the future (e.g. restaurant, shop, service etc.). Your answers to the tasks below will relate to this business.
b.What are the advantages and disadvantages of owning your own business?
c.In what ways could PESTEL be useful in planning your start-up business?
a.In what ways can ‘globalisation’ have an impact on your business? Discuss two examples.
b.What suitable technology would your business use and how would it improve the operations of the business?
a.In this era of modernization, the hospitality industry is a highly emerging sector globally. The hospitality industry chiefly deals with providing efficient service and product to the global consumers which benefit the interest of the general population. The business of restaurant falls under the hospitality industry. This sector chiefly concentrates on food products which are served to the consumers who want to experience good food and pleasant ambience with their loved one. Along with providing food services, a restaurant owner also focuses on creating a pleasant, comfortable and attractive ambience in order to enhance the experience of the consumers and thus enhancing the competitive advantages. The nature of majority of the restaurants across the world is a profit based institution. The profitability of the mentioned business chiefly comes from the services and products offered to the consumers.
b.Some of the advantages of owning a business are as follows:
- Financial advantage: With effective tactics and knowledge about the market, one can make a greater amount of money compared to working for someone else (Paunescu 2013).
- Power: One can take crucial decisions and steps on their own without depending on any superior for confirmation.
- Personal fulfillment: To a good number of individuals, running a business of their own is considered to be more fulfilling compared to working for someone else. Besides that, there is no risk of losing the job.
- Investment: Staring a restaurant requires a good investment which can be considered to be risky.
- Inconsistency: There prevails a risk of inconsistent income. Ups and downs are considered to be a major part of the restaurant business.
- Devotion and strain: While to some individual it is difficult to work long hours without vacation, some business owner faces the difficulty to conduct unpleasant tasks associated with a business like firing an employee or refusing to hire one.
PESTLE analysis is a strategic planning tool which let the owner of the restaurant understands the political, economic, social, technological, legal and environmental factors of the area or country where he wants to establish his business. While the political factor will help him understand the trade and tariff restrictions and employment laws of the country, economic factor helps the owner to understand the power of the consumers, inflation and interest rates, fiscal policies and unemployment trends of the country. Social factor includes culture and career attitudes, population growth rate and age distribution (Kim et al. 2013). Legal factors deal with tax and labor laws that are not considered under political factors. Finally, environmental factor includes information about the environmental changes of the country. By assessing all this information, an owner decides whether to establish his business in the area or not.
a.In what ways can ‘globalization’ have an impact on your business? Discuss two examples.
In what ways could PESTEL be useful in planning your start-up business?
b.What suitable technology would your business use and how would it improve the operations of the business?
a.Globalization has imposed a highly positive impact on the restaurant industries across the world by providing them with a wide range of choices. Before globalization, it was a really difficult task to obtain certain ingredients that were not available locally. Globalization has made all the necessary ingredients available just by a mouse click or phone call. This enables restaurants to serve a greater variety of food to the consumers. A restaurant owner who can avail this facility effectively will surely gain competitive advantage in the local market. For instance, globalization has made it easy to be a seafood restaurant even in a land lock area. Since seafood will be rare in the mentioned area, consumers will be attracted to taste new and rare items and thus competitive advantage can be gained. Along with that, food items can be shipped to the consumers within a very short period. Another example of the effect of globalization on restaurant business includes importation of food materials. Restaurants which had limited number of suppliers from local firms are now able to avail vegetables and spices from abroad and therefore aren’t as vulnerable to demands to renegotiate contracts. Thus, globalization has made it easier for restaurant to enhance its menu and therefore enhance the number of consumers (Lee et al. 2013).
b.Since this is the era of modernization, a newly found restaurant must invest on resent technologies in order to gain competitive advantages. Some of the technologies that can be used for gaining advantage in the local market along with their advantages are stated below:
- Mobile ordering: This technology will help the consumers to order food sitting in the comfort of home (Crane and Matten 2016). This will help the restaurant to gain more consumers and enhance the overall revenue.
- Ordering through social media: Very few numbers of consumers are supposed to download the app for a start-up restaurant. Hence, in order to promote the business, social media can be used. Not only it is one of the most inexpensive options to go for but it will enable the owner to directly communicate with the consumers and thus understand their preferences and requirements. This, in turn, will help to enhance the consumer loyalty to the business. Social media platforms like Facebook and Instagram can be used for marketing through social media.
- Games while-you-wait: Like the other two technologies, this technology will help the above-mentioned business to gain competitive advantage. Consumers often get bored and offended while waiting for their order to arrive and this, in turn, impose a negative impact on the restaurant With the help of this technology, it will be possible to keep the consumers engaged and thus more consumers can be retained by the restaurant.
a.Briefly identify who your ‘customer’ is likely to be. Why is it important for a business to understand its customers?
b.Describe TWO ways in which you might attract more customers to your business.
a.The age range of the consumers of the restaurant industry is vast since from a 6 years old kid to an elderly citizen of 60 years, enjoys visiting restaurants not only for its food but also for the pleasant ambience. However, the majority of restaurant visitors are found to be of the age range of 20-50 years. Since Australia is a developed nation, the majority of the citizens are financially capable of expensing money on restaurants. On the other hand, due to busy work life, a good percentage of consumers are dependent on meals from restaurants.
In what ways can ‘globalisation’ have an impact on your business? Discuss two examples.
For a business, it is really crucial to identify their consumers to enhance consumer loyalty and trust which in turn will enhance the brand equity of the restaurant. By identifying the consumer base of the restaurant, the owner will be able to understand their taste and preferences. This, in turn, will help the management of the restaurant to satisfy the consumers. Satisfying the consumer will result in an expansion of the business since one consumer can recommend a particular restaurant to a huge number of the individual.
b.Considering the fact that startup restaurants should have effective strategies to attract consumers, two of the most effective ways of attracting consumers are as follows
- Social media Advertising Being a powerful tool to attract consumers, a little investment and advertising can help the restaurant to attract a bulk of consumers. Facebook and Twitter being two of the most popular social media sites, advertising can be done through them (Tabassum and Rahman 2012).
Advertising through Twitter
In twitter, advertisements are easy to create targeted audience can be selected keeping in mind the budget of the restaurant.
A huge amount of consumers can be targeted through Facebook. Unlike Twitter, advertising is a little complicated in Facebook due to a lot of option to choose from.
- Hosting an event Event hosting is considered to be the most effective way to attract consumers. Some of the event hosting strategies are as follows: Grand opening A grand opening of a restaurant encourages consumers to give it a try. Several discounts and deals can be offered to the consumers during this event Consumer appreciation event This event can be hosted by the restaurant to show appreciation for the consumers. Like the above-mentioned event, discount offers, foods and drinks can be offered to the consumers.
a.What is the role of ethics in business?
b.With examples from other businesses, describe how your business can treat its staff ethically.
a.Ethics play a highly positive role in the business. Corporate social responsibility along with ethical behavior brings about significant beneficial effects in business. The major roles of ethics are stated below.
- Ethics enhance the yearly revenue of the business by attracting consumers to the services and products of the business and thus by boosting sales.
- Ethics enables the management of a business to reduce employee turnover and thus enhance the overall productivity of the business.
- Employees are more attracted to work in an organization that follows ethical values. Hence ethics reduces the cost of recruitment of the employees and also help the organization to get efficient and experienced employees.
- Like employees, investors are also attracted towards an organization that has proper ethical rules. This, in turn, enhances the share price of the company along with protecting the business from being taken over.
b.In order to retain employees in the organization and thus enhance the productivity of the business, it is crucial to treat the employees ethically. Popular food chain industries like McDonald and KFC have special code of ethics to deal with ethics related issue (Knani 2014). One of the most common ethical issues seen in restaurant industries is an unethical deal between the supplier and the restaurant staffs. In order to eradicate this ethical issue, ethical code should be implemented that strictly prohibits the usage of suppliers who have personal relationship with any employee. Another field where managers of several restaurants face ethical dilemma is handling of employee shift. The productivity and sale of Foie Gras were hampered due to lack of serving staffs during the early morning shift (Yeh 2012). Serving employees often tend to covet the same shift due to tips and greater number of consumers. Managers should handle the distribution of the shifts ethically by assigning popular as well as less popular shifts to employees keeping in mind their skills, performance and seniority. Apart from this, any discrimination based on race, color, gender, age, sexuality and religion among employees should be strictly prohibited from both legal and ethical standpoint.
References:
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, pp. 12-16
Kim, E., Ham, S., Yang, I.S. and Choi, J.G., 2013. The roles of attitude, subjective norm, and perceived behavioral control in the formation of consumers’ behavioral intentions to read menu labels in the restaurant industry. International Journal of Hospitality Management, 35, pp.203-213.
Knani, M., 2014. Ethics in the hospitality industry: Review and research agenda. International Journal of Business and Management, 9(3), p.1.
Lee, S., Singal, M. and Kang, K.H., 2013. The corporate social responsibility–financial performance link in the US restaurant industry: do economic conditions matter?. International Journal of Hospitality Management, 32, pp.2-10.
Paunescu, C.M., 2013. Challenges of entering the business market: the pre-entry knowledge and experience. Management & Marketing, 8(1), p.63.
Tabassum, A. and Rahman, T., 2012. Differences in consumer attitude towards selective fast food restaurants in Bangladesh: An implication of multiattribute attitude model. World Review of Business Research, 2(3), pp.12-27.
Yeh, R., 2012. Hotel general managers’ perceptions of business ethics education: Implications for hospitality educators, professionals, and students. Journal of Human Resources in Hospitality & Tourism, 11(1), pp.72-86
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