SME Fast Food Restaurant

7/31/2019 SME Fast Food Restaurant

http://slidepdf.com/reader/full/sme-fast-food-restaurant 1/10

SMALL MEDIUM ENTERPRISE

FINAL PROJECT

Introduction:

Pakistan is among the countries of the world which are known for its food. In Pakistan, there are

thousands of varieties of food which are easily available. Pakistani’s foods are famous

throughout the world. There are hundreds of companies which are included in this industry.

There is a large variety of food and there are thousands of restaurants throughout Pakistan. The

food industry is popular because our country is an agriculture country. We produce wheat and

rice in excess amount every year. Due to this excess amount of wheat and rice, we export it todifferent countries. These two are the major elements which are used in food industry. We have

chosen food industry for our project. We have chosen this industry because there is an easily

access for collection of data in this industry. There are thousands of restaurant in overall

Pakistan. It is very difficult to collect data from all these restaurants. But in Lahore, there are

hundreds of restaurants. It is still not easy to collect data from all these restaurants. Because we

have a shortage of time to collect data from all of them. So, we have chosen Chinese restaurants

in Lahore area to fill the questionnaire. Total Chinese restaurants and Chinese food vans consist

of 30. The sample size for this research is 15 including both Chinese restaurants and Chinese

food vans. There are number of competitive advantages to sme’s in this industry. The method of

processing the food is sometimes a competitive advantage for sme in food industry. There are

some restaurants which are competing on the bases of price. Some restaurants have competitive

edge of providing better quality food than competitors. Some restaurants are providing more

quantity then their competitors. The quantity of food is competitive advantage of them. The

world is moving toward globalization. Technology has provided ease in every industry.

Technology has improved the production process in food industry. Now different kinds of

machines are used in food industry which can save time and man power. Different restaurants are



continuously improving the machinery and equipment according to their requirement. It is the

competitive advantage of them. Taste is an other competitive advantage of different restaurants.

There are many other ways of getting competitive advantage in sme’s. For example, Personnel

contacts are very important in restaurants. If can provide them competitive advantage over

competitors. Customer loyalty to some specific restaurant is competitive advantage for that

restaurant. Location is very important factor in these restaurants. Mostly these restaurants are

located in Gulberg area of Lahore. It can provide them a competitive advantage over

competitors. Location should be selected which can easily accessible to customers. Parking area

is a competitive advantage of some restaurants. It can provide customers satisfaction that their

cars are in safe area. Vallet parking is another competitive advantage of some restaurants. In this,

there are employs of that restaurant can park your cars. Some restaurants have a competitive

advantage that they have relationships with the government. Some restaurants have a tax

concession. Tax relaxation can be achieved by having contacts with tax consultants, which can

provide this by the help of law. There is a potential in this industry because people can never

stop eating. And there is an opportunity in this industry to come up with an innovation and fillthe gaps in this industry.

Research Methodology:

We have chosen this industry because there is an easily access for collection of data in this

industry. There are hundreds of Chinese restaurants in overall Pakistan. There are nearly 30

Chinese restaurants and Chinese food vans in Lahore. We have taken a sample size of 15 for our

research because we have shortage of time. In this research, we have used questionnaire as a tool

for collection of data. Questionnaire is filled from these restaurants and food vans.

Literature Review:

A competitive advantage is benefit which is gained over competitors through either by providing

additional features or services that justify similar or possibly higher prices. It is also achieve by

either lowering prices against competitors. The sme’s mostly compete in the market by cutting

their prices and providing good quality. Sme’s mostly products are involved in niche markets,finding and nurturing a competitive advantage can mean increased profit and a venture that is

sustainable and successful over a long time. For sme’s it is helpful to take a more in-depth look

at an edge over the competition and what it means to have a competitive advantage. It answers

the question, “Why should the customer purchase from this operation rather than the

competitors?” as there are number of sme’s which are providing same products and services. For some ventures, particularly it is difficult for those in markets where the products or services areless differentiated. A key point to understand is that a venture that has customers has customersfor a reason. Successfully growing a business is often dependent upon a strong competitive edge

that gradually builds a core of loyal customers, which can be expanded over time.

Competitive advantage is gained by the help of product features and the benefits which are

provided by the product. Sme’s advantage is that they are small in size and located everywherein the markets. Their operating procedures are standard and smooth operations are done.



Competitive advantage in sme’s is achieved by cutting cost in the operations. Good will is also a

competitive advantage of sme’s. The way you interact with your customers has a greater value

for customers. Sme’s are more flexible than large organizations. They can adopt to change morequickly than large organizations. Their small size is competitive advantage over large firms. For

example, one customer demanded to manufacture one rubber in seven different colours. One sme

can fulfill this order easily because it is running at small level. It can adapt to customers demandquickly as compared to large firm.

Various studies have shown that ethical consideration is important for sme’s because it can give

a potential to the business. One of the studies discusses the ethical and socially responsibility of Australian and Malaysian SME owners. A content analysis of the data revealed that the sme’s of these countries are concern for ethical practices, taking responsibility and accountable to ethics

and maintain the honesty and dignity. Sme’s face new challenges and hurdles while practicingthe business ethics (Luken & Stares, 2005; Zairi & Peters, 2002). Gibb (2005) states that smaller

firms should be more socially responsible because these firms considered ethics as a key

competency that lays the ground for the way the business should operate. There are reasons to

why the sme’s are considered more ethical and socially responsible. There is a large difference

among the number of studies about ethical and socially responsibility of small firms. Sme’s areinterconnected within the local community where they operate. According to 2006 Corruption

Perception Index (CPI) reported that out of 163 countries, Australia was among top ten “high

clean ethically” countries and Malaysia is on the 44th ranked (Transparency International, 2006).

Ethically and socially responsible can give a competitive advantage to Sme. Socially responsible

is a positive activities that a company undertake in which it operates. The responsibility istowards the customers, employees and the public. Sme’s can gain a competitive advantage bysuch practices (Kuratko, Hornsby, & Naffziger, 1997).

One of the studies is related to how you can get competitive advantage through Producer

Services Business. And how competitive advantage affects Establishment Performance and the

sources of competitive advantage are characterize such as price, quality, creativity, innovation,

timeliness delivery and flexibility. In this, it is written that how firms respond by modifying theircompetencies which are internal capabilities and linkages with suppliers and associates, and what

can be the ways in which they position themselves in relation to their competitors. And these all

are related to gaining a competitive advantage. In it the porter argues that firms can create value

for their customers by establishing a value chain within the organization. And when customers

think that these values are superior then the firm’s competitors, so the firm has established

competitive advantage. And the porter basically talks about two main things in it which includes

lower cost and differentiation. In which lower cost refers to if the firm is providing a good or

service more efficiently than the competitor and if the firm is providing good quality of good or

service to their customers at lower cost. And the differentiation refers to where firms create some

superior value in their product which they are manufacturing or it can be in service quality

(Milkovich, George T. and John W. Boudreau, 1994). In one studies they basically focused on

how to get the competitive advantage through the information technology which involve that the

firm which is having a systems that link an organization to the distribution channels, suppliers or

customers. And these systems called inter-organizational systems (IOS), which basically enables

the organization to move the information across organizational boundaries. In it what they are

doing is, they can bring sufficient competitive advantages, including tighter links to customers,



lower costs and increased product differentiation (Michael R. Vitale).One of the study focused

on how the firms can successfully engage themselves not only by using or exchanging the

resources, but communication among employees really matters a lot, because it helps the

employees in interpretations of those exchanges, communication helps them to make a good

decisions about how to exchange and use resources. In it the author says that the R&D staff is

very important for a firm and the other thing is the trained sales force because with it the firm

can be using their resources much more effectively. If the firm is having effective sales force

then it is very beneficial for the firm to attain the competitive advantage. And if the firm is

having effective and experience people working in their R&D department, that firm can get the

competitive advantage through it (Violina P. Rindova and Charles J. Fombrun). In one studies it

is stated that how can you get customer value and competitive advantage from technological

capabilities. This emphasis on that the firm should manage the resources well, which must be

converted into customer value, while the competitive advantage comes from offering your

customers a better value than your competitors. There are three things which are discussed here,

which are how can you differentiate the technology you have, with your competitors. The secondone is that measurement is fundamental to research; here we need to know the different ways of

measuring the advantage from capabilities. And the third one is estimating your competitive

advantage from capabilities (Nugent, Jeffrey B., 1989).One study shows that the managers can

simply ignore the competition, if they think they are monopolist. And this indicates that the firms

success or failure of a decision depends upon the company’s capabilities and by the customer

response, which is not only by the competitors actions or reactions.

And there are three major forms which are discussed here, which are as follows

1. Managers can study their competitors for getting the knowledge about their goals,

strengths and weaknesses, assumptions, strategies, past and current behavior.

2. Managers can predict about competitors behavior only about their actions but not theirreactions

3. How managers may consider that their competitors are likely to react to their firm’s own

decisions.And in this study, they also talked about the strategic reasoning which refers to describing your

competitors and predicting the future moves of your competitors. And it is basically done by

considering yourself into your competitor’s shoes and predicts the competitor’s reactions(Nugent, Jeffrey B., 1996). In one studies it is discussed that a number of studies provide that the

inter firm competition is strongly related to how market evolve in new markets, firms usually try

to focus on innovation and they keep on trying to improve on competitive products. But this is

not true in mature markets because normally firms respond aggressively and immediately to the

price reductions by the competitors. However, it is less likely to the new markets.One study reveals that social capital can be a competitive advantage of sme. Social capital means

shared property involving high trust and reliability in social networks. It can provide help in

gaining more customers than competitors. Innovation can be made by the help of networking.And networking can provide help in gaining social capital. More social capital strong of sme

means that the firm is gaining competitive advantage. In Europe, the sme’s are gaining social

capital. Innovation programs help in creating a competitive advantage. Governments program arepromoting innovation in country like Denmark and Ireland are in achieve social capital.



Business performance is increased by the help of these programs. Governments of these

countries are promoting sme’s (Edquist, 1997).

Sme’s are gaining competitive advantage over their competitors on the bases of area where theyare located. Sme’s are competing large firms on the bases of location. Customer attention is

gained by locating at convenient locations. Location is very important factor which is considered

in customer segmentation. Sme’s are mostly located in areas where customer’s interaction is veryeasy. Location cost is less than large firms because they mostly require small area as compared

to large firms. Small area means the cost of that location is low. Location is attractive factor

which is considered in gaining the customer concentration. Sme’s growth is dependent onefficiently performing of operations. Cost leadership firms are competing in the market due to

expertise in operations. Cost can be cut down by the operations of the firm. Supply chain

management can helps in gaining a competitive advantage over competitors. The resources arevery scares in nature. The resources utilization is very important. The resources are best use at

their optimum level. Competitive advantage in sme is achieved by producing products at

economies of scale. At this stage, the cost is at the minimal level, because the product is made at

a large quantity. When the product is made at a large quantity, the fixed cost of the product is

reduced. Competitive advantage in sme is also achieved by implementing the strategy which isbest suitable for the business. Strategy implementation is a very critical step. But if the strategy is

formulated according to the given situation, then the competitive advantage is achieved. Strategy

formulation is the core competency for sme. There are number of sme’s which are competing inthe market because they have formulated strategy according to the present situation. Global

marketing activities are very important for sme’s. It can give them benefit over their competitors.By the help of global marketing activities, Sme can gain a competitive advantage. It can give the

sme an opportunity to compete globally. It can help in creating the demand of sme in the global

market. Customers are gained by the help of global marketing. There are different barriers which

can oppose the small firms for global marketing. But small firms can overcome these barriers

(Cullen, 1999). But there are different programs which can act as a support for the sme’s. Tradeagreements can give a support to sme’s in different countries. Sme’s are trying to become global

companies, because it can provide them a step in moving forward. Sme’s are now competing

large companies globally. They are creating their market share by exporting their products to

different areas. Governments of different countries are promoting sme’s by providing extra

benefits to them in the form of low interest rates. Sme’s market share is increasing constantly.

Public image is a competitive advantage of sme. Public image is created by giving value to thecustomers. It can take time to create a positive public image. It is achieved by valuing the

customers. There are many different ways through which small companies are benefited by the

competitive advantage.



Questionnaire:

Respected Sir,

We are SME students at Faculty of Management Sciences (BBA) at University of Central Punjab,

Lahore. We are working on our SME project. We need your valued time and coordination with

us to create knowledge. We ensure you that any information obtained in connection with this

study, will remain highly confidential. In any written report or publication, no one will be

identified and only aggregate data will be presented.

Name : Gender : Qualification :

Age : Occupation :



Scale The response scale is: 1. Strongly Agree 2. Agree 3. Neutral 4. Disagree

5. Strongly Disagree

Ways of getting competitive advantage in SMEMy restaurant has strong relations with the suppliers than competitors.

1 2 3 4 5

Quality of my product is 40% better than my competitors.

1 2 3 4 5

The design of my product is good and 15% more attractive than competitors.

1 2 3 4 5

My firm can produce 30% more different products of my customers’ choice.

1 2 3 4 5

My firm can serve meal in 5 mins less time than my competitors.

1 2 3 4 5

My team is much effective and experienced than competitors.

1 2 3 4 5

My restaurant is cost leadership among the competitors.

1 2 3 4 5

My sales are increasing by the technology which I bought every year.

1 2 3 4 5

I bought latest technology after every one year.

1 2 3 4 5

I have strong relation with government agencies than the competitors.

1 2 3 4 5

My sales are increasing 40% because of strong social network.

1 2 3 4 5

My firm have strong distribution channel than my competitors.

1 2 3 4 5

The location of my restaurant is far better than my competitors.

1 2 3 4 5

I have hired skilled labor than my competitors.

1 2 3 4 5

My sales are increasing 10% every year due to strong distribution channel.



1 2 3 4 5

My restaurant can produce 10% more customized dishes than my competitors.

1 2 3 4 5

The efficiency of my waitress is 10%much better than competitors.

1 2 3 4 5

My firm always gives on time delivery which helps in gaining customer loyalty.1 2 3 4 5

My sales are increasing because of delivering the order in 10 minutes.

1 2 3 4 5

70% of my customers demand my product A

1 2 3 4 5

Hypothesis:

More the friendly environment is then the more will be the competitive advantage.

By providing more quantity in same price then competitors the more will be the competitive

advantage.

The more the quality of the product will help in gaining maximum competitive advantage.

The design of the product is simple the more will be the competitive advantage.

Lower prices than competitors will lead toward maximum competitive advantage.

The maximum adaptation to the latest technology will lead towards maximum competitive

advantage.

Flexibility in work conditions will lead towards competitive advantage.

Social network can help in gaining competitive advantage.

After sale service facility has a positive impact on the competitive advantage.

Usage of latest technology has a positive impact on competitive advantage.



Refrences:

BibliographyDavid North, D. S. (2001). Public Sector Support for Innovating SMEs. Small Business

Economics, Vol. 16, No. 4, , 303-317.Huang, H.-L. C. (2004). The Establishment of Global Marketing Strategic Alliances by Small

and Medium Enterprises. Small Business Economics, Vol. 22, No. 5 , 365-377.

Jenkins, H. (2006). Small Business Champions for Corporate Social Responsibility. Journal of

Business Ethics, Vol. 67, No. 3 , 241-256.

Knight, G. (2000). Entrepreneurship and Marketing Strategy: The SME under Globalization.

Journal of International Marketing, Vol. 8, No. 2 , 12-32.

Lefebvre, L. A. (1993). Competitive Positioning and Innovative Efforts in SMEs. Small Business

Economics, Vol. 5, No. 4 , 297-305.

Lefebvre, L. A. (1993). Competitive Positioning and Innovative Efforts in SMEs. Small Business

Economics, Vol. 5, No. 4 , 297-305.Lefebvre, L. A. (1993). Competitive Positioning and Innovative Efforts in SMEs. Small Business


Levratto, N. (1996). Small Firms Finance in France. Small Business Economics, Vol. 8, No. 4 ,279-295.

MacPherson, R. V. (2002). The Competitive Characteristics of U.S. Manufacturers in the

Machine Tool Industry. Small Business Economics, Vol. 19, No. 4 , 355-369.

Rangone, A. (1999). A Resource-Based Approach to Strategy Analysis in Small-Medium SizedEnterprises. Small Business Economics, Vol. 12, No. 3 , 233-248.

Reuber, E. F. (2003). Targeting Export Support to SMEs: Owners' International Experience as a

Segmentation Basis. Small Business Economics, Vol. 20, No. 1, , 69-82.

Reynolds, P. D. (1997). New and Small Firms in Expanding Markets. Small Business

Economics, Vol. 9, No. 1, , 79-84.



Sarah Roberts, R. L. (2006). Generating Regional-Scale Improvements in SME Corporate

Responsibility Performance:Lessons from Responsibility Northwest. Journal of Business Ethics,

Vol. 67, No. 3 , 275-286.

Senneseth, P.-A. H. (2001). A Panel Study of Firm Growth among SMEs in Network. Small

Business Economics, Vol. 16, No. 4 , 293-302.

Small Business Economics, V. 2. (2003). Targeting Export Support to SMEs: Owners'International Experience as a Segmentation Basis. Eileen Fischer and A. Rebecca

ReuberReviewed , 69-82.

Stewart, A. M. (2003). Long-Term Decline of Small and Medium Size Enterprise Share. Small

Business Economics, Vol. 21, No. 3 , 215-228.

Swatman, S. P. (1998). A Combined-Method Study of Small Business Internet Commerce.

International Journal of Electronic Commerce, Vol. 2, No. 3, , 31-46.Thurik, S. W. (1999). Linking Entrepreneurship and Economic Growth. Small Business


Tian, T. F. (2006). Social and Symbolic Capital and Responsible Entrepreneurship: An Empirical

Investigation of SME Narratives. Journal of Business Ethics, Vol. 67, No. 3, , 287-304.

Vitale, H. R. (1988). Creating Competitive Advantage with Interorganizational InformationSystems. MIS Quarterly, Vol. 12, No. 2 , 153-165.

Watson, P. W. (2005). Firm Growth and Supply Chain Partnerships: An Empirical Analysis of U.K. SME. Small Business Economics, Vol. 24, No. 1 , 39-51.

Wills, P. C. (1999). Small Firms, Social Capital and the Enhancement of Business Performance

through Innovation. Small Business Economics 13: , 219-234.WillsReviewed, P. C. (1999). Small Firms, Social Capital and the Enhancement of Business

Performance through Innovation Programmes. Small Business Economics, Vol. 13, No. 3 , 219-

234.

Yetim, N. Y. (2006). The Cultural Orientations of Entrepreneurs and Employees' JobSatisfaction: The Turkish Small and Medium Sized Enterprises (SMEs) Case. Social Indicators

Research, Vol. 77, No. 2 , 257-286.

Yhee, J. B.-J. ((Feb. - May, 2002)). Small and Medium Enterprises in Korea: Achievements,

Constraints and Policy Issues. Small Business Economics 18: , , 85-119.Yhee, J. B.-J. (2002). Small and Medium Enterprises in Korea: Achievements, Constraints and

Policy Issues. Small Business Economics, Vol. 18, No. 1/3, , 85-119.

Yvette Blount, T. C. (2005). E-Commerce, Human Resource Strategies, and Competitive

Advantage: Two Australian. International Journal of Electronic Commerce, Vol. 9, No. 3 , 73-

89.

Documents

SME Fast Food Restaurant