2. Storyline
Situation
New Sam Hang restaurant was profitable and also with good reputation because of its food variety and cheap price
However, the situation has changed when one of the shareholder decided to open another restaurant nearby on his own, competing on the similar offerings
Complication
Question
How can New Sam Hang restaurant regain the profit and competitiveness within 6 months?
Answer
New Sam Hang should cut the unnecessary cost by improving labour efficiency and the ordering method, and improve the sales by offering discount incentive to encourage higher spending per visit, as well as attracting new customer through creation and promotion of new dish and signature dish
Rationale
Because:
Be focus is one of the key to reduce the cost and hence improve profitability
Cutting the cost can result in better use of resources which will regain short term profit
Discount and product revamp can attract more sales in long run

3. Improving labour and ordering efficiency
Why?
Observation data collected from restaurants to study the customer stay in time
Observation data collected from New Sam Hing for the no of waiting customers
Have high demand during perk period
New Sam Hing
30 mins
Fairwood
20 mins
Keung Kee Restaurant, Central 6
17 mins 5
No. of customer waiting in the queue (New Sam Hing) during perk hours 4 4
Customer stay-in time during perk hours (1:00 – 2:00)
Have potential to increase operation efficiency
1: : : :45

4. Improving labour and ordering efficiency
How?
12 min  10.4 min
Delivery Time per Order
Max delivery distance from 500m -400m
Gather the no. of orders during peak hours from 2 to 3
XX min  XX min
Food waiting time
10.5 sec 85 sec
Promote the Set Menu (e.g. Set A/ B/ C)
Dine –in Order Time
Change the ordering method by using tick-box sheets
XX min  XX min
110 sec 80 sec
Queue waiting time
Rearrange floor plan to provide 1 person dining fast lane
Take away Order Time

5. Improving labour and ordering efficiency
Outcome
70 customer more per day
1 waiter Less
Replace with 6 hours part time in peak hours
Part time workers salary at $30/hr
In each shift
Saving of $8,525 per month
Additional Revenue of $XXX per month

6. Increase sales by creating bundle sales
Why?
A survey of 100 customers showing their preference of a bundle offer
“You must not pick those with high gross margin only, but also something people like.”
Owner of New Jade Restaurant, Sheung Wan
Vegetables and Rice Dumplings are chosen

7. Increase sales by creating bundle sales
How?
Key success factor is noticeable promotion with emphasis on the discounts
ANNIVERSARY PROMOTION
FOR ANY PURCHASE OF MAIN DISH, ADD
50% OFF
“A noticeable poster is the key of this type of strategy.”
Owner of Tak Wan Noodles, Wan Chai
$10 X $5
“I don’t realize there are so many people eating vegetable until I implemented this offer, people like discounts.”
Owner of Keung Kee Restaurant, Central
25% OFF
$12 X $9

8. Increase sales by creating bundle sales
For every purchase of any main dish, add $5 (original price $10) for a plate of vegetable or add $9 (original price $12) for a rice dumpling
Outcome
Additional Sales of $46,081 per month
Sales per month, $HKD
600,000
Additional from Rice dumpling
590,000
Additional from Vegetable
$15,056
580,000
Original
570,000
204 plates more of vegetable
55 pieces more of dumplings
$31,025
560,000
550,000
540,000
530,000
520,000
510,000
500,000
Before
After
Source: Customer Survey and Restaurant trial statistics

9. Attract more customers through new offers
Why?
Target here for additional revenues
Promote Signature Dish
Potential 3: Test run for two weeks by delivering Coupons to boost additional sales

10. Attract more customers through new offers
How?
Selling Pork Dumplings:
Add an additional counter near the noodle session to sell Pork Dumplings
2. Promotion on Signature Dish – Pig Legs
Posters promoting “Secret Receipe handed down by generation, Try me!”
3. Deliver 1000 coupons & test run for 2 weeks

11. Attract more customers through new offers
Outcome
Promote signature dish – Pig legs
Create new dish – Pork dumplings
Offer coupon for re-purchase
Additional Sales of $54,560 per month
Sales per month, $HKD
$7,360
$25,600
510,000
520,000
530,000
540,000
550,000
560,000
570,000
580,000
590,000
600,000
Before
After
Source: Customer Survey and Restaurant trial statistics
Additional from Signature Dish – Pig Legs
Additional from Coupon re-purchase
Original
$21,600
Additional from Pork Dumplings
610,000

12. Conclusion

13. Appendix – Interview schedule

14. Appendix – Work plan

15. Appendix – Work plan

16. Appendix – Work plan