Muhammad Tayyab

SME CASE Des Pardes Submitted by: Muhammad Tayyab Supervised by: Mr. Noman Shafi Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad Table of Contents Case: Des Pardes ........................................................................................................................................... 3 Introduction .............................................................................................................................................. 3 Challenges Faced ...................................................................................................................................... 6 Overcome to these challenges ................................................................................................................. 7 Teaching Notes ............................................................................................................................................. 8 Summary................................................................................................................................................... 8 Suggested Questions ................................................................................................................................ 9 Case Analysis ............................................................................................................................................ 9 Supplementary Material ........................................................................................................................ 11 Group SWOT: .............................................................................................................................................. 13 1. Strengths:............................................................................................................................................ 13 2. Opportunity: ....................................................................................................................................... 13 3. Weaknesses: ....................................................................................................................................... 14 4. Threats: ............................................................................................................................................... 14 Driving and Hampering Factors: ............................................................................................................ 15 Weighting of Critical Success Factor ...................................................................................................... 16 2 Case: Des Pardes Introduction Des Pardes is a restaurant chain in Islamabad and Rawalpindi particularly known for its food and outdoor catering. We mainly focused on E11/4 branch. Currently four of its branches are working:  Saidpur Village  E11/4, Islamabad  PWD, Rawalpindi  Murree Working in premium hotels like (Marriot Hotel, Hashwani hostels) for almost 22 years, as a food & Beverages Manager and then director F&B, Mr. Toquir excelled his experience in the field of restaurant and catering services. Back then in 1999, Mr. Toquir was a certified professional chef who graduated from culinary inst. of America along with MBA and BBS degrees in Finance from Kansas state Univ. Kansas, USA. Also, Master Certificate from Cornell Univ. USA. While working in Hashwani group Mr. Toquir was responsible to handle F&B of all 7 hotels under this group. After successful job service career in hotel industry, Mr. Toquir found an opportunity as he completed 22 years in serving hotels why not run my own! He did some market survey and he also served as professional chef, so he does have taste knowledge to meet the requirement of people of Islamabad. Also, he reviewed that people living in Islamabad do live along the nature, so he was more focused about moving towards ambiance place. After spending some quality time on surveying the market he made him his mind to start a hotel in Saidpur village. According to him, the Saidpur shaped well, demonstrates the ancient time of Mughal era and antique style in whole Islamabad located in the edge of Margalla Hills which makes the perfect view. 3 However, the main focused of Mr. Toquir was on providing people with continental food and Mughlai food as per demand of site in Saidpur Village. Serving for many years in hotel industry, customers are the first concern of him. Initially, he decided to go for simple menu like, Mughlai food cout and simple Paki food cout. In an exclusive chat with business recorder Chaudhry Toquir Ahmed, CEO of Des Pardes Saidpur Village, Islamabad He decided to invest all his savings in Pakistan with the hope to get a positive response, but according to him, the govt. departments dealing with business are yet to go a long way in facilitating for an investor. Talking about the challenges faced by entrepreneur in Pakistan especially those ex-patriates, keen to make investment in country, he said should by facilitated by Federal Board of Revenue, CDA, and law enforcement agencies. He maintained that he preferred to work in Pakistan instead of US. According to its General Manager, the Des Pardes E11 Branch is facing a tough time against the competitors, due to shifting to another phase of E11. Previously, they established E11 branch in phase 3. The inconvenience they faced with CDA, due to which they had to shift the entire branch in phase 4. The shifting process made them lose their standards in eyes of competition. According to General Manager, Mr. Sardar Naeem Serena hotels, The Monal restaurant chain are their competitors. 4 5 After interviewing the respective person our team came to learn these follow up objectives of company and challenges in which most of them will be faced by every hotel in industry however some may particularly face by this restaurant chain named as Des Pardes, established in 2010. o The branch in E11 is started 3 to 4 months ago so the biggest challenge they are facing there is retaining of customers as the restaurant isn’t as prime as brand name. They want to work in restaurant building and will soon start the renovation in month of Ramadan. o The market in which this business works is very expensive and they currently don’t have capacity to move to some other areas like Lahore, Karachi. o The restaurant chain is mostly on lease which is consuming fixed expense having huge impact on revenues. Their current challenge is lowering that expense which can only be possible by acquiring the land on which restaurants are built. Currently they don’t have enough money to acquire the land of restaurant chain. o Currently, the E11 branch is working on getting more revenue and recently adjusting on breakeven point, just fulfilling the expenses. Challenges Faced It can be seen through the Case that for the success of the business one must have proper insights of the market and its business effectiveness especially when its distribution genre of the business. The main issues facing by Des Pardes are:  Inefficient Advertisement Strategy  Inefficient in providing best ambience The first issue comes under the umbrella of marketing is their deficiency in advertising and getting people aware of what they are offering. As compare to their competitors, their efforts about advertising are unable to meet the market. The customer needs to aware of what you are offering and running your business with respect to the market. Despite their strengths, they are still experiencing customer rotation due to lack of advertising and their profitability ratio is very low as compared to other branches. Their recent challenge is also to provide best ambience in town and as compared to competitors, they should meet the competitors’ edge. 6 Overcome to these challenges The issue of inefficient advertisement should be solved by promoting what the products and services they are offering. Firstly, they need to get people of Islamabad aware of the location, products and services they ought to give. But to address these challenges, they first need to renovate the building structure to get the customers. The market in which they are operating and the competitors they are facing in market, they should keep in their standards in mind while operating in E11. By renovation of that restaurant, the customer will spread the positive word of mouth about the restaurant and they can penetrate the current market by this way. Also, when they are providing the best ambience in town, customers will pay for it. By using this strategy, they will meet their financial objectives and will come over the breakeven point which in future helps them to compete the competitors by providing hotel services and the ambience what their competitors are giving them. By using this strategy, they will enhance their revenues which will give them options to expand their brand nationally and internationally.  Capital Available  Investment Budget for renovation Available  Development plan Required  Customer policies Required  Promotion strategy like TV Channels, Social media, billboards. Required 7 Teaching Notes Summary A Pakistan- American entrepreneur and investor, associated with hospitality/ food industry in Pakistan, Mr. Toquir entered the competitive hotel industry by establishing Des Pardes as a platform for providing services to customers. However, despite all obstacles his contribution to setting up an excellent food outlet- Des Pardes which provides best services to its customers both national and foreigners was not acknowledged by concerned department, making tall claims of facilitating the investors. He said that Pakistan Tehreek-Insaaf, (PTI) Chairman visits his restaurant once in week which reflects the quality of food and its services. (“Not only Imran Khan, other film actors and people belonging to different walks of life are his clients”, he added). According to him, Working in Food and beverages department in Marriot Hotel, Mr. Sardar Naeem who has vast experience in that department, was hired as a General Manager in Des Pardes restaurant chain in Islamabad. Des Pardes E11 Branch is facing a tough time against the competitors, due to shifting to another phase. The inconvenience they faced with CDA, due to which they had to shift the entire branch in phase 4. The shifting process made them lose their standards. They lack the ambience they had there. Which accordingly to GM, Mr. Sardar Naeem is highly concerned right now. According to GM, that lack of quality of structure which every customer has expected, disappoints the customers and made them shift to competitors. The renovation and rebuilding of structure will enhance the customer attentions. Renovation of that branch may somehow affect the finances but still would get huge amount of revenue in long run. Des Pardes is looking to expand its business by bringing in more franchises in their business portfolio. They are thinking about making contract with other big brands like Nestle and Pepsi Cola etc. because it will give them more profitability and they will diversify their sales risk by investing in different businesses in this way. 8 Suggested Questions Q1: Do you think Ambiance matters a lot for Restaurants? Q2: How do you think govt Policies can affect restaurants Industry? Q3: Does specific dishes of restaurants attract your attention? Q4: Have you tried the NOU RANGI ANGETHI platter? Q5: Do u prefer to visit restaurants randomly or you just pick one from home? Q6: How often women prefer food from restaurants rather than cooking at home? Q7: Why do they need to expand the restaurant chain? Q8: Any suggestion about the expansion of restaurant chain in any city of Pakistan or foreign countries? Case Analysis It is seen from the case that to run any business successfully, one must have experience of that business along with the efforts. Especially when it relates to food industry with stiff competition, Mr. Touqeer Ahmed proved himself as a best businessman by using all his competences in a meaningful manner. His approach towards business was extraordinary. Since the advertising strategy used by Des Pardes wasn’t strong enough to capture the customers attention but the location of Des Pardes, Saidpur has fulfilled the desired outcome by providing the customers exactly what they want. Their main focused on Saidpur was establishing the restaurant according to site which initially add value to their brand. On the other hand, Des Pardes still face issues in changing govt policies, tax fluctuations, dollar price fluctuations and employee turnover respectively. The main issue at first will be highlighted under the umbrella of operational management which its owner also finding way to tackle the issue. Why do they want to expand the restaurant chain, is because they don’t want to rely on one restaurant? The owner with his entrepreneurial mind wants to make it a restaurant chain. He 9 wants to grab the customers attention by providing them high quality service in other area of Rawalpindi & Islamabad by establishing them at different sites. Recently they faced drastic decrease in sale of its products and no of customers at E11 branch, the restaurant chain is fulfilling the expected outcomes or revenues. Therefore, they are willing to expand the restaurant chain in other cities of Pakistan by giving different clients the ownership to reduce the impact of above-mentioned risk. Similarly, if they renovate the E11 which they are planning to do in coming days will enhance their ability to capture the audience advertency. By using this tool as a customer advertence, they overcome the risk of losing the customers which somehow increase the revenue. For that, they need to hire some skillful designer which will affect the current status of Des Pardes it would also help the restaurant in getting more return in near future. So, the investment for the renovation will supposedly affect the finances of Des Pardes. Although they are influenced by govt. policies, but these are also same for other restaurants’ as well. Recent govt. has listed certain SOP’s for everyone running the restaurants so the problem of taxes which they bear will affect the competitors sidewise. The initial branch of Des Pardes, Saidpur also affects the customer’s point of view by providing them unique style and ambience which is very difficult to imitate by its competitors like Serena, The Marriot, they are good in Hotel industry but Des Pardes is best in offering them restaurant services (introducing new dish every week). As far as customers are concerned, Des Pardes has to pay attention to give more convenience to them especially working women and housewives. By using this tool, they can solve the costumer’s inability to came by their restaurant to eat. How? This service can also be provided by contacting the Food Panda who is currently working as a delivery service entity in Pakistan. On the other hand, this option may unable to get expected return because of inflation that is affecting restaurant market drastically. Yes, Des Pardes is well-renowned brand of restaurant chain. But they are facing a high competition here in small market by not meeting the competitors related to Infrastructure, ambience. This unable to capture the market of Islamabad although their rates are as same as its competitors. According to GM, they are planning to establish a franchise in Ajman where the 10 ambience and interior design is the best thing required to capture the customers attention there. If they can’t meet the expectation of local market, then how come they are going to capture the customer attention when they entered international market. Supplementary Material The Restaurant chain was established by Mr. Toquir, that setup was started from constructing the single restaurant in ancient village of Islamabad known as Saidpur. They got a huge advantage from this site; people of Islamabad want the surroundings to be calm and scenery oriented. Toquir said that he conceived the name of the food outlet from visiting student of National College of Art (NCA). The restaurant is not only providing quality traditional food to parliamentarians, diplomats and other high officials but also providing employments to several locals. He said that the outlet was offered to him on a 33-year lease some 13 years back by the then chairman CDA Kamran Lashari and he built infrastructure of Des Pardes and Saidpur village – a small locality comprising some 21,000 populaces from various ethnic groups. Similarly, he invested the certain amount to build another branch in E11, Islamabad but due to govt. regulatory bodies they got affected related to income from it. He was of the view that FBR must cautiously exercise enforcement powers against the taxpayers, who are regularly contributing revenue to the national kitty. FBR’s field formations should avoid exercising powers to issue notices, sealing of business premises and attachment of bank accounts on groundless basis and tax demands worked out without considering the factual businesses volumes, profits and earnings of any business. If enforcement powers are exercised without fulfilment of legal formalities, it would send a negative message to the existing investors as well as discourage the new businesses in all over the country. Competitors: Market within which Des Pardes is operating largely as compared to its competitors. According to its GM, they have stiff competition with the competitors, some of them enlisted below:  Serena Hotels  Marriot Hotel 11  The Monal Restaurant chain  Islamabad Hotel Products Des Pardes offers a unique blend of Mughlai Cuisine with fine dining services; this is being done first time in Pakistan, good but different food experience in historic background. When the first Des Pardes opened in Islamabad, all the food preparation where ceremoniously undertaken and mixed as were the original recipes from centuries ago. Des Pardes also offering Chinese Corner for people having Chinese taste, BBQ as per demand of Pakistani customers. They also offer Hi-Tea and Buffet on every special occasion e.g. Pakistan day etc. 12 Group SWOT: 1. Strengths: Strengths Priority  Best in Norangi Platter 1  Das Pardes have branded image. 5  Des Pardes has Premium Location 3  Des Pardes has Outdoor Catering facility for Customers 2  The amount they have invested is from the personal savings of 22 years and 6 no loan from bank is included in that startup..  Every week they try to come up with a new dish for their customers which 4 make them unique from others. 2. Opportunity: Opportunity Priority  Increasing Working Women. 4  Owning the land will increase their revenue in long term. 3  Gain more customers by providing ambience to the people of Islamabad. 2  Das Pardes sector and the sectors around it are developing day by day 1 making it an opportunity for business to grow.  Making contract with FOODPANDA for home deliveries will increase 5 their business.  Des Pardes can build a set up in Dubai as one of the main concentrations of 6 Des Pardes is to hit the market of Tourism. 13 3. Weaknesses: Weaknesses Priority  Limited Restaurant Space. 5  Das Pardes Interior needs much work to be done. 1  Cooking area is not visible to customers. 6  Had no resources to expand by owners themselves. 4  Advertisement Strategy. 2  Low Prices Offered by Competitors. 3 4. Threats: Threats Priority  Political instability (CDA) 2  Limited Population making Islamabad a very small Industry. 5  Strong Competitors Like Aura Grande, The millennium etc 4  Economic Downturn 3  Currently the restaurant is its breakeven point because of lower number of 1 customers due to Shifting of Branch  Current inflation rate and devaluation of money greatly affects the revenue 6 of Des Pardes. 14 Driving and Hampering Factors: Driving Forces O/S Old New Priority Priority Best in Norangi Platter S 1 1 Des Pardes has Outdoor Catering facility for Customers S 2 3 Das Pardes sector and the sectors around it are O 1 4 O 2 2 developing day by day making it an opportunity for business to grow. Gain more customers by providing ambience to the people of Islamabad. Hampering Factors W/T Old New Priority Priority Das Pardes Interior needs much work to be done W 1 2 Advertising Strategy W 2 3 Currently the restaurant is its breakeven point because of T 1 4 T 2 1 lower number of customers due to Shifting of Branch Political instability (CDA) 15 Weighting of Critical Success Factor KEY FACTORS O/S PRIORITIES Score CAN BE W/T Highest = *3 INFLUECED? 2:nd highest = *2 Yes=1;No=0 3:rd highest = *1 Prob. = ∑1’s/n Score Best in Norangi Platter O/S 5/1/0 17 17 Des Pardes has Outdoor Catering O/S 3/3/0 15 15 O/S 0/3/3 9 9 O/S 6/0/0 18 18 W/T 3/3/0 15 15/6=2.5 37.5 Advertising Strategy W/T 2/3/1 13 13/6=2.16 28.08 Currently the restaurant is its W/T 0/2/4 8 8/6=1.33 10.64 facility for Customers Das Pardes sector and the sectors around it are developing day by day making it an opportunity for business to grow. Gain more customers by providing ambience to the people of Islamabad. Das Pardes Interior needs much work to be done breakeven point because of lower number of customers due to Shifting of Branch 16 m2/m1 Political instability (CDA) W/T 1/5/0 13 m1= 108 13/6 =2.16 33.8 m2 = 169.02 Result: The ratio m2/m1 is used as a guideline to assess if enough critical project factors have been identified. So, in our case, we can see the ratio of m2/m1 is 0.63 which is less than 0.7. 17 m2/m1= 0.63