Case Analysis: The RED CRAB Group - Jaypee Eugenio

Case
Analysis: The RED CRAB Group

Situation Analysis

                In 1998, the first
restaurant established by Raymond's mother in Clark Pampanga is called Red Crab
and Seafood Restaurant.  Situated on a commercial
space in Mimosa Leisure Estate, it enjoyed a following especially from visitors
who frequented Clark specifically the casino aficionados and golfers. Thus, you
cannot discount the fact that the price was on the high-end since it is
catering to mostly casino players and high rollers. The restaurant hired cooks
from the area who were accustomed to the US Bases-style, no fancy, no frills
straight-forward cooking.

                The menu is
inspired by his mom's 8 crab recipes since she liked to cook as her hobby, plus
the home style Kapampangan food to complement the crabs which was developed by
a group of UP-HRM consultants he hired for the rest of the menu. At that time,
Red Crab has no personality yet other than serving good food, though image-wise,
the restaurant projected the spirit and personality of her mother, very
traditional looking Spanish restaurant.

                The following
year, Raymond and his mother brought Red Crab in Manila without market research
or whatsoever and with the only idea that the area was doing well. After 5
months, they started to experience decrease in sales which made them decide to
re-plan everything. In 2001, two more RED Crab and Seafood Steak restaurants
were opened in Tomas Morato and in Alabang and this is the only time he studied
his market to know who his customers really were and to be branded as a seafood
restaurant.

                The opening of
Greenbelt 3 in 2002 allowed Raymund to have a seafood place with a twist. He
essentially developed a concept that revolved around the casual seafood dining
experience prevalent in the United States with the concept of Seafood Club
which he wanted to become a casual seafood place that possessed a festive
image, a happy place to eat. It has a happy atmosphere, a noisy place where you
and your friends or family can roll up your sleeves and have fun, enjoy the
music and be merry while you're cracking the crabs. This is also the time he
realized that they are not just selling the crabs, but the experience.

                In 2004, Crustacia
in Rockwell mall was born which was oriental inspired and offers Vietnamese,
Thai, and Chinese cuisine using fresh, live crabs, seafood and other exotic
dishes inherent in these Asian countries and this is where the enchantment
unfolds. The food served can be described as fulfilling, liberating, enchanting
and transformative. By 2005, Blackbeard's Seafood Island restaurant with an
animated pirate / island setting was added to their list. Also, a new
restaurant called Heaven and Eggs which is a non seafood place he established
with non-family partners became successful.

Problem Analysis

                There is really no
other problem in the Red Crab Case other than the problem of sustaining and developing
multi-brand restaurant concepts and to be known as a house of brands – a house
of world class restaurant concepts. How are they going to position their future
brand / concepts to align with what was mentioned above and what would they
want their customers to feel whenever they visit and eat at their establishments?
These are the forefront challenges that they need to address in order to be
even more successful and to maintain their competitive advantage.

Alternatives Courses of Action

                To help answer or
solve the problem above and achieve their goal of becoming a house of brands
--- a house of world class restaurant concepts, I suggest / propose three
alternative courses of actions that Raymond Magdaluyo and his partners can
consider.

1.       Is to constantly change the menu offerings of
the restaurants that they currently have. To provide different flavour to its
loyal customers and sustain / retain their interest in your restaurant dishes.

2.       To retain old time favourite and signature
dishes of each restaurant for their customers to enjoy, instead enhance more
the experience they want to imbibe by regularly updating their restaurant
interiors and set up, or providing more amenities that they currently offer
like hot towels, bibs, wooden mallets, etc.

3.       To regularly think and create new concept of restaurants
may it be in seafood or non-seafood category with local or international
inspired flavours. Heaven and Eggs is one good example. They can continue to
expand in different restaurant categories like pastry shop, coffee shop, etc.


Decision and Action Analysis

To come up with the best alternative and arrive at the
best course of action, let us not forget what was mentioned in the case and
what Raymond's guru told him, and that is to create his own segment. To help
him even more, he decided his segment to be divided in three levels given
below.

1.       Micro market or where we are going to operate?
2.       The food type or what we are going to serve?
3.       The motivational group or what influences them
to go to my restaurant?

Therefore, with this in mind, I conclude that the best
alternative course of action is to regularly and constantly create new concept
of restaurant/s if they want to be known as house of brands. They can tap into
different kinds of restaurant and not just stick with seafood. Heaven and Eggs
is one good example of a different type of restaurant that offers different
kind of dishes served in a different time of the day. Since most of the seafood
restaurant they have offers lunch and dinner, heaven and eggs serves sumptuous
breakfast to its customers. Apparently, with the increase in number of contact
support centres that works at night as their possible target market for a good
breakfast before going to bed it is not impossible for it to succeed.

                Moreover, just
like Jollibee who has Red Ribbon (to name one) under its umbrella, Raymond and
his partners can consider offering a different kind of restaurant for those who
loves coffee and pastries as their snacks. They can open up a coffee shop
wherein their customers can go to after having heavy dinner at one of their
popular seafood or non-seafood restaurant. They should not be afraid to
diversify their restaurant offerings since they have already tried it with
H&E. For as long as the three questions above will be answered, then there are
no rules that will prevent them in exploring opportunities.