Strategy in My Organization

I am one of the directors in a Thai cuisine restaurant. Our company targets families and adults with mid-low income. Geographic and income distribution are our main considerations in opening shop. We are in Cheung Sha Wan next to MTR station, which is a high foot traffic area and able to access our target customers easily. Business Level Strategies We are adapting cost leadership strategies to aim at a board market and focus on creating low cost. Our company sets the price of our food at an affordable price. For example, our menu price ranged from about $28 to $70 which is below-average comparing to the restaurants near our shop. We found it beneficial to maintain sustainability that customers are willing to return especially for those who live in the surrounding areas. We implement this strategy considering the external environmental factors that people live around our restaurant are mainly mid-low income and have high preference for food takeaway from a low-priced restaurant during pandemics period. Our restaurant revenue remains stable because of increased takeaway orders notwithstanding the social distancing measures. However, it requires a load of sales to maintain profitability. Further, I realise our current strategy focusing on a low cost may not sustain as a competitive advantage if another restaurant near our shop offers a lower price. Since this is not rare, valuable, hard to imitate and substitutable. Hence, I consider developing core contingencies based on our resource and capabilities to gain further competitive advantages are crucial. Recommendation I recommend other directors to adapt digitalisation in restaurants to allow customers ordering via digital menu on mobile apps and to introduce “robot waiter” to replace 50% of waiters with robot serving food while the waiters can perform other duties that the Robot waiter cannot do such as customer service. Cost for a robot waiter is about $3000 per months according to the Hong Kong Broadband Networks, which is almost five times lower than a waiter’s salary. Thus, it can reduce labour cost significantly. Furthermore, it could optimise table turnover rate and promote operational efficiency to shorten waiting time to take orders and allow us to process more orders. It would eventually increase the restaurant's ability to serve more customers, generate more sales to minimise our concern avoiding inadequate sales and enhance customers loyalty and dining experience due to quick service. I believe it can also develop our core competencies as a digitalized restaurant to obtain competitive advantage with positive effect for brand marketing to attract new customers that allow us to compete against rivals since digitalized restaurant with robot waiters are valuable and rare in Hong Kong currently. It may be hard to imitate by some traditional restaurants but not for some modern restaurant. It could also be substitutable. Nevertheless, we can still enjoy the benefit before the market imitates and adjust our strategy later when digitalisation no longer serves its competitive advantage. Digital menu and robot waiter are relatively cost effective that we have sufficient resources to implement at this stage. Our company size is small with limited cash flow. Strategy requires big investment such as M&A, internationalisation, diversification is not feasible. Moreover, we have limited market power and bargaining power, we will face substantial obstacles to implement cooperative strategy with other firms. After the revenue growth of our restaurant becomes stable with sufficient finance resources, we can consider other strategies such as expanding market share by opening further shops. Conclusion I recommend our company to digitalise at this point for the purpose to differentiate our company from competitors and to create value under budget.