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

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 1:00 1:15 1:30 1:45

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

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

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

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

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

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

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

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

Conclusion

Appendix – Interview schedule

Appendix – Work plan

Appendix – Work plan

Appendix – Work plan