Opening a new business in london - Term Paper Example

OPENING A NEW BUSINESS IN LONDON Market Attractiveness Market size Gourmet as of present focuses on providing restaurant solutions to people in London through the provision of healthy food. London is a top destination for individuals who seek annual business tours and shopping spree. The UK restaurant business is worth approximately $41billion. For instance, the 13 largest coffee shops have extended their outlets from 1000 to 3000 stores in three years (Stickler, 2011). Other restaurants within London have made a total of 8.

1 billion dollars, while those that offer full serviced have had 6.6 billion dollars in sales. Market demand UK consumers have embraced the culture of doing fast foods. This is mainly because of busy schedules. Most consumers seek healthy food, and this is where Gourmet factory comes in (Fullen, 2004). Industry attractiveness Industry domain Obesity has been an endemic in London with the introduction of McDonalds foods. 25% of adults and 17% of children in United Kingdom were found to be obese.

The government predicts that 60% men, 50% women and 20%vchildren will be obese by 2050 if this menace is not cubed (What are the health risks of obesity?, 2014). This is where Gourmet comes in. The factory mainly manufactures and provides low-fat and low-calorie foods to help subsidize the rate at which people in London develop fat-related problems. The foods are wholesome and healthy, yet still, affordable. Threat entry Currently, there are no threat entry problems because the UK government encourages food manufacturers to come up with solutions for obesity and other food-related problems.

Most restaurants in London specialize in quick foods with high levels of calorie and fat. Gourmet will, therefore, be licensed to operate in the country (James & Baldwin, 2003). Capital for this business is quite high because of the extra funds needed to add nutrients and regulate fats and calories in foods to be manufactured. Bargaining power of the supplier The bargaining power of buyers is relatively on the lower side. This is so because there are only a few restaurants, which offer healthy foods in London.

Threat of substitutes Most London food factories manufacture unhealthy foods, which only end up harming consumers. Genetically Modified Organisms (GMO) foods could replace common and Gourmets healthy foods due to their affordability. These foods would however not solve the problems of food-related problems because they have been proven to bring about cancer and obesity (What are the health risks of obesity?, 2014). Competitive rivalry The main competitor would be McDonalds, which is currently working on reducing calorie and fat in their foods.

Gourmet, on the other hand, cares about the consumers well-being and therefore deals only with healthy foods. Gourmet would, therefore, be more popular because of its affordability (McDonald’s serves WHAT in London?! The outrageous double standard in fast food., 2014). Complementors Gourmets success entirely depends on the existence of food related problems. Once these problems are done way with, people will turn back and consume any other available foods in the future. However, this problem is estimated to be endless due to the hectic life that people in developed countries lead.

The demand for healthy and affordable foods would, therefore, only increase. Competitive Analysis Porters 6 forces It is crucial to know strategies for making a business successful. Portes 6 helps foretell whether or not a business will indeed be a success. Competition Gourmet operates in a new industry. There are no obvious competitors as mot restaurants dealt with unhealthy foods. Gourmet aims at helping people in London avoid food-related problems by manufacturing only healthy foods. New entrants Gourmet is one of the first food companies to manufacture healthy foods; therefore, there are fewer participants in this business.

In future, however, there is a high possibility of other companies entering this market, hence creating competition. Buyers Consumers of restaurant foods are numerous and the fact that Gourmet foods have health benefits encourages them to buy foods at even higher prices. The prices are however kept on a low to encourage more customers to promote Gourmet (Mason, 2004). Suppliers Restaurant business is a service since it does not solely rely on its suppliers. Gourmet however uses suppliers to market its foods since this is a new business, and the prices are set in a way that the factory insures profits.

Substitutes Only countable companies have invested in this business. When potential investors and consumers realize the benefits of these healthy foods, their demand will increase tremendously. The only difference would be in the pricing of potential investors (Jorgensen, 2002). Government subsidies The government creates rules to share profits with successful companies, and in some instances, the companies can be bought (Garvey, 2007). Gourmet is however beneficial to London and hence the government would support its operation.

Overall assessment of the restaurant industry The company does not have competitors yet, but in the near future, it will need to make crucial decisions. More consumers need to be attracted, and funds for expansion sought. Critical success factors (CFS) The micro and macro perspectives of this business need to be understood to ensure the business is successful. The company should employ only committed co-workers and managers, and the consumer base made larger. Healthy foods are made from natural, and wholesome meals and excess fats and calories are removed to avoid health problems in users (Stickler, 2011).

Customerss are also attracted to the health benefits of foods; hence, more income would be generated. Sustainable competitive advantage Environmental/operational Gourmet uses environment-friendly methods to manufacture foods, and the foods are extracted from health -recommended substances. Foods with fewer fats and calories help reduce the possibility f developing health problems. Customers will not stop seeking healthy foods. Therefore, this is a lucrative business (Walker, 2007). Financial The company dedicates its first income to extending its branches so that larger market is reached.

The first profit would be approximately $28000, which would be used for the growth of the company. This would enable the company gain more profits in the future (Brown, 2007). Ethical The company is sustainable because it does not go against regulations of the United Kingdom. The health benefits f consuming our foods will not only benefit the consumer but the environment as a whole. The UK government and the consumers should, therefore, appreciate this business. References Brown, D. R. (2007).

 The restaurant managers handbook: How to set up, operate, and manage a financially successful food service operation. Ocala, Fla: Atlantic Pub. Fullen, S. L. (2004). Opening a restaurant or other food business starter kit: How to prepare a restaurant business plan & feasibility study : with companion CD-ROM. Ocala, Fla: Atlantic Pub. Group. Garvey, M. (2007). Starting & running a restaurant for dummies. Chichester, England: John Wiley & Sons. James, J., & Baldwin, D. (2003). Streetwise restaurant management: A comprehensive guide to successfully owning and running a restaurant.

Avon, Mass: Adams Media Corp. Jorgensen, A. S. (2002). The food service professionals guide to: 365 secrets revealed. Lauderhill, FL: Atlantic Publishing Group. Mason, L. (2004). Food culture in Great Britain. Westport, Conn: Greenwood Press. McDonald’s serves WHAT in London?! The outrageous double standard in fast food. (2014, September 30). Retrieved from Food Babe: http://foodbabe.com/2014/09/30/mcdonalds-serves-what-in-london-the-outrageous-double-standard-in-fast-food/ Stickler, V. (2011).

Business of Restaurants: London: An analysis of the current restaurant business. GRIN Verlag. Walker, J. R. (2007). The restaurant: From concept to operation : study guide. Hoboken, N.J: Wiley. What are the health risks of obesity? (2014, June 18). Retrieved from BBC: http://www.bbc.co.uk/science/0/21702372