Landmark Restaurants Inc.

Daniel .KFrank.KManmeet .BNargis .ARosalie.F

Agenda

Agenda

1. Introduction

2. Porter’s 5 Forces Model

3. Financial Analysis & The “Dinner Only” Decision

4. Lunch & Dinner House

5. Menu Engineering

6. Conclusion

Annual Population Groth

Proposed development of farmland for low rise residential

Google map of the similar area

Artistic Rendition of Viva Transit Routes (Yonge & Davis

Growth of employers in GTA

Porter’s 5 Forces Model

1. Number and strength of competitors

2. Potential entrants into the market

3. Availability of equivalent products

4. Bargaining Power of customers

5. Bargaining power of suppliers

Porter’s 5 Forces Model

Number and strength of competitors   looks at the number and strength of competitors in the market Landmark’s competition can include any chain restaurant that has similar menu items and

similar prices Landmark has one competitor in the industry (short term and long term impact)

Potential entrants into the market   Medium to high potential High cost but inhibit new entrants Few have similar financial backing, brand power and equity, and banner diversification that

Landmark has Financial barriers include franchise and continuing royalty fees, start up and maintenance

fees The key to Landmark’s success is speed to market and establish their reputation as the

upper casual restaurant.

Availability of equivalent products   One competitor Availability of equivalent products is low Short-term and long-term impact

Porter’s 5 Forces Model

Bargaining Power of customers

The bargaining powers of customers are very high in the restaurant industry. Price is an important factor for customers when determining which restaurant to go

to for their short lunch hour. Short term and long-term impact

Bargaining power of suppliers

Bargaining power of suppliers looks at the costs of purchasing supplies, such as food within the restaurant industry as well as employee and labour costs.

“Dinner House” has a higher contribution margin but reduced overall profitability due to lower projected customer volumes. Lunch profitability is difficult to determine without an ABC analysis. Nevertheless it appears to be generating sufficient

contribution margin to offset a large portion of fixed costs. Break-even analysis indicates that a substantial margin of safety exists to cushion the expected drop in clientele in the less

populated Newmarket region. The payback period on Shane House’s initial investment is longer, and the return on investment is lower under the “Dinner

House” model versus the “Lunch & Dinner” model.

Cannibalization of higher-margin dinner business by lower-margin lunch business is an open question. However, if only 37% of lost lunch customers made the switch to dinner, the restaurant’s profitability could be maintained.

Conclusion: The “Lunch & Dinner” model should be retained.

• More stable and profitable base from which to grow the business.• Avoids the opportunity cost of lost lunch income.• Helps offsets under-utilization of capacity during non-peak periods.

In order to grow their business, Landmark must make every effort to minimize this under-utilization of capacity.

  Promotions similar to Milestones “Birthday Special” (bring 3 or more

friends on your birthday and get a free entrée) will ensure that additional margin is being generated during otherwise slow business periods.

‘The 3 Martini Lunch is Deader Than A Dinosaur’

Fifteen Minutes after Ordering or it’s FREE!!Culturally this had been exactly what some of the time-pressed business lunch crowd in Ontario had been looking for.

Lunch Menu & Catering Menu 3 out of 4 employees eating a lunch prepared away from home at least once a week, numerous opportunities to meet and exceed consumers' desire for something special

Healthier Alternatives Offer gluten free and healthier options as people are beginning to become more health conscious of themselves. More than 14 percent of respondents living in a metropolitan area reported salad as their typical lunch

Various Marketing Gimmicks

Distribute fliers in neighborhood office buildings advertising our quick and tasty lunch service. Consider faxing a daily or weekly menu to office managers.

Break out of the box and offer a unique lunch experience.

Offer special discounts (15% off food related items & non-alcoholic beverages) off to frequent diners.

Teach wait staff how to read their lunch customers and to be ready to recommend items that can be prepared quickly.

No matter how quickly customers are served, make sure the service is top-notch.

Have the check ready for guests promptly. Develop regular clientele by keeping track of guests'

histories, including menu preferences and birthdays. Consider offering high-tech service options, such as

fax or online ordering. Offer a gift certificate to customers who spend over

$100 on their dinner menu, to come in for lunch and get their lunch bill at 25% off.

Menu Engineering

Menu engineering - is the process by which you find your most profitable restaurant items and maximize there sales.

Psychology (perception, attention, emotion/effect)

Managerial Accounting (contribution margin and unit cost analysis)

Marketing & Strategy (pricing, promotion)

Menu Engineering: Categorizing Items

4 Categories1. Stars: Popular and

Highly Profitable

2. Workhorses: Popular but yield a low contribution Margin

3. Puzzles: Not popular but have a high profit Margin

4. Dogs: Not popular and have a very low profit Margin.