1. The effect of price and volume on revenue
Table 7.1

2. Key points of revenue appraisal
Revenue is product of price and volume
Appraisal needs to take account of changes in both price and volume
Averages not always accurate and prone to misinterpretation
Allow for inflation and/or price rises
Need to compare like with like
Incorporate 12-month rolling totals to determine true trends and performance
Revenue cannot be fully appraised by itself

3. Calculation of change in costs and revenues
Table 7.2

4. Examples of cost percentages for foodservice operations
Table 7.3

5. Key points of cost appraisal
Structures vary, and change over time
Can be measured in cash or percentages
Proportional relationship between costs
Relationship between costs and inflation
Cross-sectional and time-series analyses useful
Incorporate 12-month rolling totals to determine true trends and performance
Operators with the lowest costs perceived as having a key advantage
Allocating indirect costs more complex than direct costs

6. Example profit and loss account
Table 7.4

7. Comparison of gross profits
Table 7.5

8. Comparison of operating profits
Table 7.6

9. Yield comparisons
Table 7.7

10. Relationship between revenue, costs and profits in foodservice operations
Figure 7.1

11. Comparison of GP in relation to revenue
Table 7.8

12. Comparison of GP and GP %
Table 7.9

13. Sales mix example
Table 7.10

14. Effect of changed sales mix
Table 7.11

15. Sales mix example (beverages)
Table 7.12

16. Example of profitability calculations
Table 7.13

17. Example of popularity and profitability ranking
Table 7.14

18. Menu engineering matrix
Figure 7.2
Adapted from Kasavana and Smith 1999

19. Comparison of net operating profit measures
Table 7.15

20. Key points of profit appraisal
Be clear how profit measures are contrived
Compare like with like
Appraise against objectives to give value
Setting objectives includes subjective judgements
Sales mix analysis determines real trends
Profit percentages measure efficiency, not profitability
Percentages allow for comparison only, cash contribution is what is being sought
Comparison with industry norms can be useful
Use rolling 12-month totals to determine true trends and performance
Take account of stakeholders’ priorities

21. Customer importance/operation achievement matrix
Achievement by operation
Importance to customer
Figure 7.3

22. Customer importance/operation capability matrix
Ability of operation
Importance to customer
Figure 7.4

23. Customer importance/staff importance matrix
Importance to staff
Importance to customer
Figure 7.5

24. The three levels of strategy and the relationship between them
Figure 7.7

25. SWOT matrix Strengths Weaknesses List of strengths List of weaknesses
Opportunities
List of opportunities 1
Strengths to make use of opportunities 2
Weaknesses which prevent exploitation of opportunities
Threats
List of threats 3
Strengths to counter threats 4
Weaknesses which prevent countering threats

26. Eight possible strategic routes for foodservices operations
Cost to the customer
Perceived added value
Figure 7.9
Adapted from Johnson and Scholes 1999

27. Ansoff’s growth matrix with alternative strategies/directions
Products
Markets
Figure 7.11

28. Strategic means and assessing options
Internal development
Mergers and acquisitions
Joint development
Assessing options
Suitability
Feasibility
Acceptability