Turnaround strategy for Raga restaurant

Abstract

Raga is a multi-cuisine fine dining restaurant located in an upscale location, a few feet off the busy Bannerghatta Road. The locality has several apartment blocks with at least 5000 flats within a 2 km radius. And there are literally no multi-cuisine restaurants within a 2 km radius around the locality. In spite of the immense market potential and lack of competition, the restaurant has not been doing well for the past 3 years. This study is aimed at finding the reasons behind the non-performance of the restaurant. We approached the problem by discussing with the restaurant owner about the operation of the restaurant and the reasons that he believes are responsible for this nonperformance. After this, we conducted an informal survey among a few patrons to get a rough idea on the possible reasons. Based on the insights from this exercise, we then went ahead and conducted a full scale survey to find out what is the actual reason and which way do we go forward to align the restaurant along the interests of the target segment. We conducted a door-to-door survey in four apartment complexes around the vicinity among the target segment that the restaurant owner wanted to cater to. From the survey we could see that the restaurant faced several issues in the eyes of the customer and the restaurant’s alignment with the needs of the supposed target segment was way off, if not completely tangential. An internal cost structure also revealed that the restaurant was actually losing money during most part of its operation. We believe that the only way to turn-around the restaurant would be to go for a multi-pronged approach aimed at improving different aspects of the restaurant including its front façade and signage, its outdoor servicing team, food and service quality, focus (reduction in the number of cuisines) and lastly a change in the leadership style. We found the restaurant owner to be too laid back and unenthusiastic about building the business and a change in the style of leadership is imperative for the restaurant to turn profitable. We believe that the restaurant is at an inflection point, that is not able to cater to the pent-up demands of the locality and if it doesn’t get its act together, would soon find a new comer usurping it and becoming the leader.