Food and beverage Management ( Case study) Essay

Food and beverage Management ( Case study) - Essay Example 6. ‘The Olive Tree’ can roll new items without much of the operational hurdle commonly found in the large chains. Six weaknesses can be identified as per the following. 1. ‘Resource limitation’, the company cannot spend much on creating its own unique brand. 2. The company does not have much leverage on large menu additions. 3. ‘No brand promotion’ to compete with large companies. 4. No market research possibility for introducing new menu items. 5. Owner is the sole guiding force; no other competent staff that can replace him at the time of emergency. 6. Low equity holding does not allow easy expansion at other locations. Answer 2 Critical Evaluation of the Restaurant The below mentioned table shows all important parameters such as total sales, gross profit, net profit, average spend per head, food versus drink sale, % gross profit for food and drink, % net profit for food and drink, total gross profit combined for food and drink that are necess ary to judge the company performance. The Oliver Tree’s performance (Calculated) for the year 2012-13 April May June July Aug Sept Oct Nov Dec Jan Feb March Total Sales 49,660 51,194 53,204 54,505 55,403 53,191 49,240 48,070 49,046 41,628 41,280 42,077 Gross Profit (Food) 23,115 23,864 24,252 25,643 25,842 25,176 23,525 22,901 20,292 17,644 18,181 20,033 Gross Profit (Food) % 68.29 67.09 67.19 68.20 66.39 67.70 68.09 67.40 63.50 60.26 62.10 65.70 Gross Profit (Drink) 11,450 11,034 11,706 11,783 12,462 12,386 10,272 10,202 10,800 8,065 8,414 7,668 Gross Profit (Drink) % 72.4 70.6 68.40 69.70 75.60 77.40 69.90 72.40 63.19 65.30 70.09 66.2 Total Gross Profit (F+D) 34,565 34.898 35,955 37,426 38,304. 37,562, 33,797, 33,103 31,092 25,709 26,595 27,701 Net Profit 21,455 23,574 23,612 24,018 22,293 21,498 20,897 20,653 18,929 14,777 14,966 15,794 Net Profit % 43.2 46.04 44.38 44.0 40.23 40.42 42.43 42.96 38.6 35.5 36.25 37.53 Avg. spend (?) per head 8.76 8.67 8.86 9.06 9.30 9.33 9.5 5 9.82 10.81 8.46 8.76 8.79 Trading Position First five months of ‘The Olive Tree’ show a consistent rising trend as far as the trading position is concerned; however, thereafter a slowdown has been observed with a major fall seen in last quarter. Trades between June and September show higher revenue earnings with weekly sales remaining above ?12,000 throughout. Sales February is the slack-month for the company registering sales of only ? 41,280 while August is the boom period for the company recording sales at ? 55,403. The difference between these two months is over 30 percent. It is important to analyze the fall in last quarter for remedial measures. Value-wise, the company's sales on drink constitute over 30 percent of the total and percentage profit margin from drinks is higher than food items. Average spend per Head As calculated and mentioned in the above mentioned table, average-spend per head vary between ? 8.46 and ? 10.81. The lowest spend is found at ? 8.46 in month of February while highest spend is registered in month of December at ? 10.81. Food Gross Profit The highest food gross profit is registered in month of August at ? 25,842 and the lowest profit is in month of February at ?17,644. It is pretty clear that profit in winter is on lower side compared to profit earned in summer months. Wages Wage bill varies between ?10,932 and ?16,064 per month. Again, the lowest bill has been registered in February and highest has been register