Issues:
Whether to open JM Signature Restaurants or not
Take over lease of the failed Cape Cod Club
Would location be positioned appropriately for their target market?
Analysis:
Targeting business clientele (lunch and dinner, with dinner hopes of $55/person)
Love affairs, business deals and friendship
Wants to attract people after theatre shows
Customers have option of having recipes emailed to them to reminisce or try at home
Joshua has a strong reputation/track record
Karma, Lynx
Key to success is to have style > food
Competitor Reds has been criticized for having unappealing food, but have great style and sense of environment which is way the
Restaurant is always packed with loyal customers (young downtown business crowd) budget constraints not as large as industry averages overestimation of projected sales (will affect negatively) positioning of restaurant crucial to success
Reputation of stakeholders
Top ranked chefs, Joshua, investors in the business
Decision Criteria space availability is limited (preference for 96 seats + 40 bar seats) labour salaries are unavoidable requires high seat turnover to achieve sales of $4million optimistic in being profitable within first year of operations assuming that the restaurant will operate at capacity through 350 days
$20 x 96 x 350 = $672,000 (lunch) / $55 x 96 x 350 = 1,848,000 (dinner)
Alternatives
1. Proceed with the original plan
a. can potentially profit
b. very costly procedure/difficult to break-even (start up costs of $750,000)
c. adequate pricing strategy to convey product quality
d. more competitors within the area (more than 100 restaurants in the district)
2. Choose another location
a. Lease of location may be a lot more expensive
b. Target market may change/not be met
3. Proceed with plan, decrease advertising costs and rearrange restaurant set-up
a. Change arrangement of searing to more dining (less bar)
b. Reduce advertising costs where
