Restaurant Group (RTN) SWOT Analysis / TOWS Matrix / MBA Resources
Restaurants
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Restaurant Group (United Kingdom)
Based on various researches at Oak Spring University , Restaurant Group is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is backlash against globalization,
geopolitical disruptions, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Restaurant Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Restaurant Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Restaurant Group operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Restaurant Group can be done for the following purposes –
1. Strategic planning of Restaurant Group
2. Improving business portfolio management of Restaurant Group
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Restaurants sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Restaurant Group
Strengths of Restaurant Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Restaurant Group are -
Low bargaining power of suppliers
– Suppliers of Restaurant Group in the Services sector have low bargaining power. Restaurant Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Restaurant Group to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Restaurant Group is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Restaurants industry. The technology infrastructure of United Kingdom is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Restaurant Group has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Restaurant Group has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Restaurants industry. Secondly the value chain collaborators of Restaurant Group have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Restaurant Group is one of the most innovative firm in Restaurants sector.
Strong track record of project management in the Restaurants industry
– Restaurant Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Restaurant Group is present in almost all the verticals within the Restaurants industry. This has provided Restaurant Group a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Restaurants
– Restaurant Group is one of the leading players in the Restaurants industry in United Kingdom. Over the years it has not only transformed the business landscape in the Restaurants industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Restaurant Group in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Restaurant Group is one of the leading players in the Restaurants industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy of Restaurant Group comprises – understanding the underlying the factors in the Restaurants industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Restaurant Group is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Restaurant Group is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Restaurant Group emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Restaurants industry
– Restaurant Group has clearly differentiated products in the market place. This has enabled Restaurant Group to fetch slight price premium compare to the competitors in the Restaurants industry. The sustainable margins have also helped Restaurant Group to invest into research and development (R&D) and innovation.
Weaknesses of Restaurant Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Restaurant Group are -
No frontier risks strategy
– From the 10K / annual statement of Restaurant Group, it seems that company is thinking out the frontier risks that can impact Restaurants industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, Restaurant Group has high operating costs in the Restaurants industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Restaurant Group lucrative customers.
Skills based hiring in Restaurants industry
– The stress on hiring functional specialists at Restaurant Group has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Restaurant Group is slow explore the new channels of communication. These new channels of communication can help Restaurant Group to provide better information regarding Restaurants products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of United Kingdom, Restaurant Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Restaurant Group has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Employees’ less understanding of Restaurant Group strategy
– From the outside it seems that the employees of Restaurant Group don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Restaurant Group is dominated by functional specialists. It is not different from other players in the Restaurants industry, but Restaurant Group needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Restaurant Group to focus more on services in the Restaurants industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Restaurant Group is just above the Restaurants industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Restaurant Group supply chain. Even after few cautionary changes, Restaurant Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Restaurant Group vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Restaurant Group has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Restaurant Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Restaurant Group are -
Using analytics as competitive advantage
– Restaurant Group has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Restaurants sector. This continuous investment in analytics has enabled Restaurant Group to build a competitive advantage using analytics. The analytics driven competitive advantage can help Restaurant Group to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Restaurant Group can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Restaurant Group has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Restaurant Group can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Restaurant Group can use these opportunities to build new business models that can help the communities that Restaurant Group operates in. Secondly it can use opportunities from government spending in Restaurants sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Restaurants industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Restaurant Group can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Restaurant Group can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions in Restaurants industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Restaurant Group in the Restaurants industry. Now Restaurant Group can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Restaurant Group can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Restaurant Group has opened avenues for new revenue streams for the organization in Restaurants industry. This can help Restaurant Group to build a more holistic ecosystem for Restaurant Group products in the Restaurants industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Restaurant Group to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Restaurant Group to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Restaurant Group can use the latest technology developments to improve its manufacturing and designing process in Restaurants sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Restaurant Group to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Restaurant Group in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Restaurants industry, and it will provide faster access to the consumers.
Threats Restaurant Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Restaurant Group are -
Stagnating economy with rate increase
– Restaurant Group can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Restaurants industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Restaurant Group will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Restaurant Group may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Restaurants sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Restaurant Group in the Restaurants sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Restaurant Group needs to understand the core reasons impacting the Restaurants industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Restaurant Group.
Technology acceleration in Forth Industrial Revolution
– Restaurant Group has witnessed rapid integration of technology during Covid-19 in the Restaurants industry. As one of the leading players in the industry, Restaurant Group needs to keep up with the evolution of technology in the Restaurants sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Restaurant Group
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Restaurant Group.
Easy access to finance
– Easy access to finance in Restaurants industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Restaurant Group can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Restaurant Group needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Restaurants industry regulations.
Environmental challenges
– Restaurant Group needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Restaurant Group can take advantage of this fund but it will also bring new competitors in the Restaurants industry.
Consumer confidence and its impact on Restaurant Group demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Restaurants industry and other sectors.
Weighted SWOT Analysis of Restaurant Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Restaurant Group needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Restaurant Group is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Restaurant Group is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Restaurant Group to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Restaurant Group needs to make to build a sustainable competitive advantage.
