Restaurant Case Study
Moviante Restaurant Case Study
SMHM 5280
October 11, 2004
Introduction This proposal is intended to pinpoint the problems and introduce actions or solutions for the active restaurant operator-owner and manager who are involved in the Moviante Restaurant. The analysis is divided into four parts: (1) problem identification, (2) causes of the problems, (3) solutions to the problems, and (4) recommendations. Additionally, there will be a complete discussion on problem solving designed to avoid future, foreseeable undesired outcomes.
Statement of the Problem
Mark Jaslow, the manager of Moviante, described that the business level in the spring and summer of 1998 was booming. However, from November on, business began to decline. Even the effort to eliminate costs such as labor hours, laundry expenses, and advertising budget seemed to be useless. Further, Moviante discontinued offering lunch in December owing to the fact that the advertisements for lunch specials failed significantly to promote business. According to the income statement of 1998, Moviante has suffered operating losses of $3,208. This loss is primarily due to declining sales revenue while increasing in operating expenses. What actions should Moviante take in order to reverse annual loss of this year as well as any losses that possibly incur in the future?
Problem Identification 1. Operating Loss – this is a major problem of the restaurant. As shown in 1998 income statement, total costs are approximately 90 percent of total sales. This showed a red flag of the restaurant. Also, the majority of restaurant sales come from weekend nights rather than the weekdays (See Table1). Operating Times | Sales Volume/week | Percentage of Total Sales | Weekdays | $3,000 | 40% | Weekend nights | $4,500 | 60% | Total | $7,000 | 100% |
Table1: Sale Volume per week
2. Advertising and Promotion – according to an informal survey of 25 residents within a ten mile radius of
SMHM 5280
October 11, 2004
Introduction This proposal is intended to pinpoint the problems and introduce actions or solutions for the active restaurant operator-owner and manager who are involved in the Moviante Restaurant. The analysis is divided into four parts: (1) problem identification, (2) causes of the problems, (3) solutions to the problems, and (4) recommendations. Additionally, there will be a complete discussion on problem solving designed to avoid future, foreseeable undesired outcomes.
Statement of the Problem
Mark Jaslow, the manager of Moviante, described that the business level in the spring and summer of 1998 was booming. However, from November on, business began to decline. Even the effort to eliminate costs such as labor hours, laundry expenses, and advertising budget seemed to be useless. Further, Moviante discontinued offering lunch in December owing to the fact that the advertisements for lunch specials failed significantly to promote business. According to the income statement of 1998, Moviante has suffered operating losses of $3,208. This loss is primarily due to declining sales revenue while increasing in operating expenses. What actions should Moviante take in order to reverse annual loss of this year as well as any losses that possibly incur in the future?
Problem Identification 1. Operating Loss – this is a major problem of the restaurant. As shown in 1998 income statement, total costs are approximately 90 percent of total sales. This showed a red flag of the restaurant. Also, the majority of restaurant sales come from weekend nights rather than the weekdays (See Table1). Operating Times | Sales Volume/week | Percentage of Total Sales | Weekdays | $3,000 | 40% | Weekend nights | $4,500 | 60% | Total | $7,000 | 100% |
Table1: Sale Volume per week
2. Advertising and Promotion – according to an informal survey of 25 residents within a ten mile radius of
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