Red Crab Group Case Study by Crissy Cruz

Red Crab Group Case Study by Crissy Cruz

The Red Crab Group started as a small restaurant in Clark Pampanga known for its Crab Recipes and Kapampangan and Filipino Food. When the owners decided to expand their business in Manila and set-up shop in Malate, they discovered the shortcomings of the business particularly the brand’s lack of identity. In spite of the initial success experienced by the Malate and the Tomas Morato branches, the owners found out that their product offering lacks focus.

After doing some market research, Mr. Raymund Magdaluyo – Red Crab’s owner, decided that to reposition his brand and be known as a Seafood restaurant rather than a Filipino restaurant. Soon after, Red Crab’s Seafood and Steaks were able to yield success in its three branches in Manila,

The opportunity to open in Greenbelt and Rockwell has pushed Mr. Magdaluyo to think of novel ways of creating a crab and seafood restaurant that would fit the tastes and expectations of the high-end market. For Greenbelt 3. Mr. Magdaluyo came up with Seafood Club, a casual festive themed restaurant. He envisioned a casual seafood restaurant where guests are relaxed and happy while enjoying their crabs. On the other hand, Crustasia in Rockwell, was born out of Mr. Magdaluyo’s vision of forming an enchanting and transformative bistro that serves oriental inspired dishes. More than just a seafood restaurant, Mr. Magdaluyo wanted Crustasia to be a classy place where people will not only appreciate the food but the whole dining experience.

After conquering the high-end market, the Red Crab group turned their attention in developing Blackbeard’s Seafood Restaurant which targeted not only the families but also the after-work group of works or the barkada crowd. This restaurant became a place wherein groups of friends can hang out for drinks and top quality grilled seafood and barbecue for pulutan.

With the right formula of proper location, good food, ambiance and value for money propositions, the success of the Red Crab group can also be attributed to effective Public Relations activities. Mr.Magdaluyo established good relations with Celebrities and sponsored their shows and events. He banked on the credibility and popularity of the celebrities that once they say rave reviews about his restaurants, they will be able to positively influence customers to try their restaurants. 

The Red Carab Group has successfully developed a One-Product, Multi Concept approach based on the portfolio of restaurants they have developed over the past years. However, based on their most recent venture, Heaven ‘n Eggs – an all day breakfast place, the Red Crab Group is moving on and expanding their horizons. They are now looking into becoming more than a Crab and Seafood Group and evolve into a successful chain of top dining restaurants.

This Case Study has notable points in putting up and managing not just a restaurant business but an enterprise in general. The story of the Red Crab Group has established insightful ideologies to follow:

1. It is important that one must identify the market and what he is selling. A brand should have focus and a clear identity.

2.  There is a challenge to create your own segment and answer the following questions:

•        Where are we going operate?
•       What we are going to serve?
•        What influences them to buy my products or get my services?

3. Given clear market segments, we draw out marketing position of the brand.

4. Based on the story of the Red Crab group it proves that it is easier to look for a perfect location, and then develop the product from there.

5. In developing a One-Product, Multi-Concept Approach, prices are differentiated because of the location of your store.

With the success of the Red Crab Group on its Crab and Seafood chain, I think the main concern that the group is facing is their strategy on sustaining and expanding their business. The challenge is creating new concepts outside of the Crab and Seafood chain and capturing a larger market.

With the addition of Heaven ‘n Eggs, the Red Crab Group is now faced with developing and implementing new strategies that can duplicate the successes of the Crab an Seafood restaurants to other concept stores.

I feel that the formula used by Mr. Magdaluyo to propel the growth of the Red Crab Group can be applied to other restaurant concepts. However, their strategy of finding a location first and then developing the business idea afterwards can be a double-edged sword. Without having any concrete business plan in mind, all the work only happens once the location is specified and finalized. Now that they are starting to create new business concepts that is outside of the comfort zone of the Crab and Seafood restaurant, Mr. Magdaluyo should extend more effort in doing market research before jumping the gun on a new concept.

I would still encourage Mr. Magdaluyo in expanding his restaurant portfolio and add more non-Crab and Seafood restaurants. Taking a cue from the Friday’s group which include, TGIF, Fish and Co, Italliani’s, and Crazy Garlic among others, the Red Crab Group also has the potential to develop individually themed restaurants and be a success. If they will continue sticking to Crab and Seafood themed restaurants, the room for growth is already very limited.