Leadership and accept the challenges that comes across the

 Leadership

 

What is Leadership?

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Leadership is simply motivating a group of people for achieving towards
for a common goal. Leadership let the group towards one direction by giving
more inspiration and guidance for the task which need to be fulfilled.

 

“Leaders establish the vision or
the future and set the strategy for getting there.”

                                                      (Kotter, J 1990,
What Leaders Really Do, HBR)

 

 Importance
of Leadership for Roti Café

 

Leadership inspires the
management in order to achieve overall business success by motivating the
entire group with maximum satisfaction. Basically when compared to a manager a
good leader possessed.

 

·        
Vision led to long term
horizon

·        
Facilitates in decision
making and build the creativity

·        
Accept challenges

·        
Appeals to the hearts

·        
Taking proactive
actions

·        
Motivating the staff

(Educational Business Articles, 2018)

The top management has the idea of expanding “The Colombo Roti Café” to
many areas in Colombo and beyond. In order to obtain this they should need a
long term vision to lead there business in to a major competitor in the
industry.

 

Proper decision making is highly importance for Mr. Fernando and Mr.
Fonseka. With the right leadership and guidance they could easily facilitate
their decisions. As well as creativity is a must for “The Colombo Roti Café” to
attract more customers and to retain them for a longer period.

 

When compared to todays’ business environment, it is rapidly changing
with new technology and new innovations. Therefore they should need a direct
leadership to understand and accept the challenges that comes across the
business environment.

 

Mr. Fernando and Mr. Fonseka are committing to ensure the quality, value
and the customer satisfaction. Leadership helps to understand what actually
customers expect from the business and how they can create a value of the
business in customers’ mindset.

 

When they have a good leadership, they always seeking for the success of
the business in each and every corner. They seek threats and weaknesses they
have and take proactive actions for the challenges they come across in the day
to day business routines.

 

Now The Colombo Roti Cafe accommodates up to 75 customers. Therefore they
should have a friendly staff to exhibit hospitality to the customer base they
dealing. In order to get the maximum output from the staff, good working
environment and motivating top management is essential.

 

 

PEST analysis and other related Environment
factors.

 

PEST analysis is helpful tool for analyzing the macro-environment
(external) that impacts all the organization. PEST analysis focuses on the Political, Economic, Social, and Technological factors of the macro-environment. These external
factors normally are exceeding the control of organizations and sometimes
appear as a threat. Additionally,
macro-environment factors such as law and the environment can have an impact on
the organization. With these two factors we can call it PESTLE analysis
too.

Political

·        
Tax.

·        
Health Regulations.

The tax policy of the
government has a direct effect on this business. High taxes on flour, other
necessary food items and equipment can interfere with the business.

In recent years investigation has been
taken by the public health inspectors against the food related business which
is not suitable for consumption and also equipment related to prepare the food
and have taken legal action against them. This management should use the
standardize equipment and raw material when preparing their food for avoid
these complications.

 

Economics

·        
Consumer income and spending.

·        
Exchange rate.

If the economy is stable, people will have more money to consume
more. The rising cost of living is a reason to reduce the roti demand because
roti is not an essential commodity.

Increase in exchange rate will impact the
prices of flour, spices and consumer equipment imported from abroad.

 

Social

·        
Consumer taste and fashion.

Social background of consumers is a very
important factor when it comes to food and beverage industry. When more people
intend to use cafes for celebrate their personal and group events such as birthdays,
get-together and the Anniversary celebrating, 
the demand for café will go up.

 

Technology

·        
E-Marketing.

·        
Hotline.

·        
New production process.

Technology plays a
critical role in present business world. The management can get a better
advantage by using upgraded technology for their ventures. It is important to
promote products through the online media such as the internet, digital media
and social media such as Facebook, Instagram. Communicating
to the customers about special offers via SMS and e-mail has become very
popular. Another way they can technology is to use a new roti making machine
with a high volume.

Other related
Environment factors

Law

·        
Employment Law.

·        
Consumer Law.

Any
change in the labor law has direct impact on this business. If the government
introduces minimum wage, it may be reasons to raise the administrative cost of
the business.  Refuse to display
the price list of items of the business place and avoid issuing a bill or
receipting when making a request, violates the consumer rights. Then the
Consumer Affairs Authority act strictly against the business.

(Caa.gov.lk, 2018)

 

Environment

·        
Tourism.

·        
Waste Management.

As the cafe situated
in the city of Colombo, attraction of tourists will enhance the demand for
café. Further in order to in line with the environmental regulation, the café
has to establish waste management system. Instead of polythene, it should focus
on using environment friendly material.

 

SWOT Analysis.

 

What is SWOT?

SWOT analysis is an acronym for Strengths, Weaknesses,
Opportunities and Threats.

·        
Strengths (internal,
positive) –
Characteristics of the business or project that give it an advantage over
others.

·        
Weaknesses (internal,
negative) –
Characteristics of the business that place the business or project at a
disadvantage relative to others.

·        
Opportunities (external,
positive) –
Elements in the environment that the business or project could exploit to its
advantage.

·        
Threats (external, negative)
– Elements
in the environment that could cause trouble for the business.

 

Identification of SWOT:-

Identification of SWOT is important to café being they
can use the findings in developing strategies to achieve objective. Accordingly
it has to consider whether the objective is attainable in the context of the
findings of SWOT.

 

S -Strengths for
Colombo Roti Cafe.

This element addresses the things that Colombo Roti
Cafe does especially well. It includes intangible, such as Company’s brand
attributes, or something more easily defined such as the unique selling pros
position of a particular product line. It could also be the human resource and
strong leadership.

·        
Excellent, well-trafficked location.

·        
Good reputation among local community.

·        
Seasonal locally sourced menu.

·        
Secret recipes.

·        
Wide product range including five types of roti.

·        
Attractive and clean place & facilities.

·        
Quality of the products.

·        
Internal resources such as skilled, knowledgeable staff.

 

 

W-Weaknesses for
Colombo Roti café

Weaknesses means the things the company perform poorly
and things that company keep away from its success. Every organization has its
weaknesses which is equally applicable to Colombo Roti Café as well. The
weaknesses relating to the Colombo Roti Café are as follows.

·        
Not currently using food delivery apps/technology

·        
Single location means limited reach

·        
Higher costs than comparable chain restaurants

·        
Modest advertising budget

 

O-Opportunities
for Colombo Roti cafe

This means elements in the
environment that the business could exploit to its advantage.

Opportunities are a
combination of different circumstances at a given time that offer a

Positive outcome, if taken advantage of. The
opportunities of Café are as follows.

 

 

·        
Emerging need for the food products.

·        
Press/media coverage of the shop.

·        
Changes in government policy related to the field.

·        
Changes in social patterns, population profiles, lifestyle
changes, and so on.

·        
Local events.

·        
Growing interest in/support for locally sourced ingredients

·        
Seasonal menu keeps things fresh and interesting

·        
Potential for growth via food delivery apps/technology

 

T-Threats for
Colombo Roti cafe

Elements in the environment that could cause trouble
for the business are considered to be threats and those are related to Café are
as follows.

Intensifying competition from established chain
restaurants

·        
Uncertain economic environment

·        
Rising costs of ingredients

·        
Changing technology

·        
Have bad debt  and cash
–flow problems

 

Porter’s Five Forces

 

Rivalry amongst existing competition (Inter firm
rivalry)

In this context “The
Colombo Roti Café” it can be identified higher competition because the current
market is already dominated by the main competitors like McDonalds, KFC, Burger
King. This can create major impact on the profitability of the business. In order
to face these situations “The Colombo
Roti Café” management needs to consider on developing strong brand which
can compete with the established competition. To improve the brand name, it is
required to focus on providing good quality and healthy variety of food
products which in turn helps to increased customer satisfaction.

Threat of New Entrance

This is the start of new competition. Companies mostly
face these types of situations when the business shows higher potential of
earnings. In this scenario “The Colombo Roti Café” has faced with moderate
threat in relation to that due to the following factors

·        
Varity of food served.

·        
Availability of outlets.

·        
method of delivery (Costs on supply chain)

·        
Consumer tastes and habits.

·        
Prices of the products compared to the other food outlets.

·        
Quality of the foods and the customer service provided.

They needs focus more on provide new verity of food
products that serves than other food outlets, based on the consumer tastes and
habits which gives different experience other than food outlets like McDonald’s,
KFC and other restaurants at affordable prices, rather stuck on producing same
quality “roti. Also they need to expend more in development of their business
outlets where more people living and busy cities. It would be more ideal to forces
on expanding their outlets at the same locations of McDonald’s and KFC’s
situated, so that they can switch the customers towards their outlets.

Threat of substitutes or Substitution

Substitutes are the products that can be used to
replace the use of the existing product. This is a threat to the business
because of the fact it can challenge the profitability of the business and it
mainly effect the growth of the business. In this “The Colombo Roti Café” case
following factors effect highly to the growth of the business.

·        
Number of substitute availability at the same industry.

·        
Product quality improvement and the consumer satisfaction.

In this “The Colombo Roti Café” scenario the products
same as “roties” available at the super markets as substitutes which were
pre-cooked so consumption of those is very high, to challenge this they needs
to focus on serve more quality and healthy food products which increasing customer
satisfaction and demotivate the use of substitutes.

 

Bargaining power of the customers

Customers will always demand for high quality products
at lower prices. Prices would be determined by both parties after series of
negotiations. If the buyers have a higher bargaining power, the supplying
company might have to experience low profits. In this “The Colombo Roti Café”
case the following factors create strong impact on the Bargaining power of the
customers.

·        
Number of food outlets.

·        
Availability of substitutes.

·        
Prices of the products.

 

In
this “The Colombo Roti Café” context availability of other providers in the
same industry is high so that there is a high tendency on people move towards
other providers like McDonald’s and KFC and other restaurants. Other factor is
that availability of substitutes also is high in the industry which gives the
same outcome.so that the management needs to focus on to provide high quality
healthy foods at affordable prices which in turn helps to increase the customer
satisfaction other than the McDonald’s, KFC or other restaurants.

 

Bargaining power of the suppliers

Suppliers too can affect the profitability of the
business by charging higher prices or providing lower quality products. In this
context “The Colombo Roti Café” case
the top management’s main concern is to expansion of the business island wide
this means that they also needs to focus on increasing the suppler network in
order to find more quality raw materials at a affordable rate which impact the
determination of pricing. Most important fact is they have to maintain inter connected supplier force so that it will be
easier to fulfill their raw material needs when it required.

 

Conclusion

 

The Colombo Roti Café is established in
the heart of Colombo and has been able to ensure the success within a shorter
period of time. Yet, it can be noted that the café has faced with several
delinquents including lack of trained and skilled staff, severe competition and
lack of capital infusion. Accordingly it has not been able to fulfill its pre
determined objective of expanding the business in other key hubs in Colombo.

Yet after analyzing the internal and
external environment of the business it was noted that though the café has
faced with several challenges, it could be easily faced with them along with
the strengths possessed by the café and with better management. 

Thus, as management consultants, we find
that the proposed business expansion is viable with the financial assistance
from a bank, new technology & innovation. The business should recruit an
experienced & specialized staff to address immediate issues and to proceed
with the business expansion operation. With that the café will be able to
ensure its growth and success in the long run.