Business Decision Making - Essay Sample

Introduction

This business report provides an analysis of the information required by the owners of KW-Pizzeria to help them with their decision to expand their business to include take-away and home delivery options. As expected, the report is divided into various sections each covering a different aspect of the decision making process. In the first section, the importance of business decision making in the context of launching a new product line is presented. The second part covers the relevance of information in aiding the business decision-making process. In the third section, the different types of information needed by the owner of KW-Pizzeria and their implication to their decision are provided. The report finds that KW-Pizzeria is missing out on the market as takeaways and home delivery account for larger proportions of pizza sales than sit-in establishments.

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The Importance and Types of Information that Aid Business Decision-Making Process

The role of information for any business organization cannot be underestimated because it guides every decision made by the management or decisions expected to be made. Corporate decision making is usually meant for two reasons. First, to solve the problems that an organization is facing or anticipated problems. Secondly, to improve its profitability by the elimination of unnecessary procedures and operations or taking opportunities that may exist either in the internal or external environment. As such, information is crucial to ensure that the decisions made can effectively serve their purpose. Without the right information, organizations are bound to make mistakes in their operations (Chopra, 2017).

SWOT analysis

It is important for a company to conduct a SWOT analysis before any strategic move. The analysis provides an organization with the opportunity to evaluate its internal environment to determine how suited it is to undertake any business related activity such as marketing campaign, venturing into a new market, and launching a new product. From the SWOT analysis, a company can identify its strengths to build a strong foundation for the planned strategic move. Once weaknesses are identified, it is much easier to formulate strategies to overcome them. Strategic planning is all about taking the opportunities, which will be presented by the SWOT analysis. Finally, any threats that may exist internally need to be addressed accordingly.

In the case of KW-Pizzeria, a SWOT analysis will identify the various strengths, weaknesses, opportunities, and threats that exist internally and are likely to affect the decision of launching take-away and home delivery options. One of the expected strengths is that KW-Pizzeria is an owner-operated business, which makes it possible to maintain customer relations. This offers the business a chance to learn their customer needs and wants regarding their products and services (Gerhardt, Joiner, & Dittfurth, 2018). Additionally, because it does not have to follow strict guidelines as is the case of franchised pizzerias, KW-Pizzeria can offer highly customized experiences for its customers. A major weakness is also tied to the fact that it is an owner operated restaurant which means that it may be financially constrained to offer delivery options available to franchises. The booming pizza business especially in the home delivery option provides an excellent opportunity for KW-Pizzeria to increase their operations. Unfortunately, there is a high threat of global brands in the pizza industry including Pizza Inn, Pizza Hut, and Domino's among others.

PESTLE Analysis

PESTLE analysis provides an evaluation of the external business environment and how its various factors are likely to affect business. The political situation in a country, state, or city will affect the operations of a company. Generally, businesses thrive well in an environment, which is stable and free from political disputes. The economic condition is also a crucial factor to be considered as it affects the buying pattern of the customers. For instance, when there is a shortage of money in circulation, people may reduce their spending. Social factors include gender, race, and religion among others. Such factors are usually crucial for companies operating in different countries. Technological factors are essential for every business regardless of their products and services. For instance, if KW-Pizzeria chooses to have taken-away and home delivery options, it will have to consider the best technology for its ordering system which may include building a mobile application, social media, or website orders. Legal matters include the regulations that can potentially affect the business venture such as health standards of the delivery personnel or equipment such as trucks or bikes. Finally, there is the concern for the environment. Notably, not all the components of PESTLE analysis may affect KW-Pizzeria especially the decision to venture into takeaways and home deliveries.

How Information Aids Business Decisions in a Restaurant

Information is needed in aiding the decision-making process in a restaurant in every step of the business even before it is launched. For instance, the first step is selecting the type of restaurant to set-up and the best location for the chosen type. For this step, it is necessary to conduct market research, which will determine the target market for the restaurant idea and the best location. After the establishment is built, it is necessary to evaluate the methods of launching in the market including marketing strategies that are workable in the selected position. These decisions should be made after careful consideration of the available resources. When the restaurant has established itself in the neighborhood, other necessary decisions include recognition for opportunities for expansion to either other locations or the same location to include more products and services. This is seen in the case example where KW-Pizzeria started at a single site and has now expanded to two more. Information necessary for a restaurant includes target market analysis, customer analysis, and competitive analysis. These sources of information and their relevance for KW-Pizzeria are discussed in the section below.

Types of Information Necessary when Launching a Product

Customer Analysis

When launching a new product as in the case study of KW-Pizzeria, there are several types of information that would be useful to the owners to ensure that they arrive at the best option. One of the crucial information is customer analysis. A detailed customer analysis includes their demographic profile, purchasing behavior, preferences, and how they prefer to access the goods or services. The purpose of undertaking customer analysis when launching a new product line is to determine the consumers that are most likely to purchase the product (Chopra, 2017). For KW-Pizzeria, it may already have an overview of its customers because the business has been operational for 2 years. However, a customer analysis is also important in this case because the pizzeria is seeking to roll out a new product line. A detailed understanding of the current and targeted customers is essential to understand their tastes, preferences, and motivation. The customers who display similar traits should be classified under the same groups. The analysis must then show the needs of the different customer segments regarding their access and delivery of the products. Finally, the business should work out how to meet the expectation of each of the identified customer segment.

Customer analysis should include behavioral analysis as mentioned above. For KW-Pizzeria, the essential information regarding consumer behavior that would inform their decision is their preference between having a sit-in establishment or take-away and home/office delivery. Fortunately, this information is easy to collect from the existing customers by observing them. For the target market, secondary research would be useful because it gives an insight into what the owners should expect to from their expected customers. For instance, Martins, Costa, & Duarte (2018), found out that take-away and home delivery accounted for over 60 percent of total pizza sales in the United States. This means that KW-Pizzeria would increase its annual sales by close to 60 percent if its added take-away and home delivery options for their customers. After determining customer needs through market research and analysis, KW-Pizzeria can develop a clear and concise value proposition, which will reflect the tangible benefits that customers should expect from the new product line. Once the restaurant has identified the buying patterns of its customers, it can create marketing strategies that will communicate the takeaway and home delivery options.

Competitive Analysis

Competitive analysis refers to the activity of evaluating the performance of the competitors regarding various business processes. The main objective of the analysis is to identify the strengths and weaknesses of businesses offering the same product to determine the source of their success. It is part of strategic planning process because it helps organizations identify strategies that would provide them with distinctive advantages over others, barriers that can be developed to limit entry of new businesses, and weaknesses in the product development cycle (Skiver, & Godfrey, 2017).

In regards to KW-Pizzeria, the competitive analysis will identify the strategies used by local pizzerias to attract and maintain their customers. The fast-food industry is characterized by large multinational corporations such as Pizza Inn, Pizza Hut, Subway, Dominos, and Burger King to mention a few. All of these chains recognize the importance of take-away and home delivery options to their business. For instance, Domino's, the world's largest pizza delivery chain has over 10,000 outlets. Takeaway and home delivery options account for over 70 percent of the total sales by the chain. It is for this reason that Domino's consistently pushes for development of its delivery system. For instance, it is possible to make orders on Twitter, smart TVs and watches, and in-car entertainment systems such as Ford's Synch (Taylor, 2016).

Identifying and Overcoming Communication Constraints

Customers

The launch of a new product or service is usually a difficult undertaking especially communicating to the customers to motivate them into trying the new products. Describing the benefits of the product is often the best way to convince the customers of the new products. Common barriers to product launch include information overload and lack of listening (Gerhardt, Joiner, & Dittfurth, 2018). In the case example, KW-Pizzeria may have a hard time introducing the two options because its customers reused to the restaurant is a traditional sit-in establishment. Fortunately, because the restaurant is relatively small, the owners can utilize their relationships with the customers to get the message out.

Employees

Communicating organization change to employees is also a difficult undertaking. The main problem with change is resistance from employees. Usually, changes in an organization mean changing the common procedures that the employees are used to. New methods of doing things may be necessary with change. For instance, if KW-Pizzeria chooses to introduce take-away and home delivery options, the staff may be forced to work faster and for longer. This may be cause for resistance to adopting the two options. However, there are several strategies available for the owners of the restaurant to ensure that the employees welcome the idea and embrace it as part of operations. First, the management should be clear and honest about the changes and the reasons why they are necessar...