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. 

SENTREP Case Analysis - Red Crab – Lea Olegario

SENTREP Case Analysis - Red Crab – Lea Olegario

Situation

The Red Crab Group started over 20 years ago with the home-grown restaurant in Pampanga. The shop was called Red Crab Seafood and Steaks. It was developed by Raymond Magdaluyo’s mother who loves to cook. They came up with a menu of different crab dishes and then complemented it with other Kapampangan dishes. The next step for growth was to actually copy the successful Red Crab restaurant in Pampanga to other populated places like Malate, Tomas Morato, and Alabang. The problem with just copying one successful business without actually making a research came to light when the sales in the Malate branch went on a decline. Several changes had to be made to make the business work. After several years, Raymond has defined the kind of business he is involved in. There were other opportunities for growth but this cannot be addressed by the original restaurant brand.

Problem

The concern discussed in this case is business growth. How can one grow the business and also address the different requirements of the locations where he was putting up the businesses. Growing a business also means increasing market share. The new store locations he was looking at wanted for him to create new concepts for the restaurant and so he cannot just put in his Red Crab and steaks shop in those locations.

Alternatives

There were several alternatives to grow the business as was also tried by Raymond.

1.       He added new stores and kept the shop basically like the original and planted it in strategic locations without any research and much thought.

2.       Create new stores that fit the location. The stores are still basically seafood in nature. This is an example of product development.

3.       Create seafood shops that cater to a different market.

4.       Create new stores that are completely different from the seafood shops. This is an example of market penetration.

Decision

Raymond basically chose all but the things that worked best for him was the product development strategy. He had a single concept but developed different products that will be appropriate for the market. He branded the different stores to cater to different markets although all are focused on being part of celebrations and special occasions.

The strength of its roots – serving crabs and seafood – was leveraged and it was used especially in creating the first new brands of businesses like the Seafood Club and Blackbeard’s Seafood Island. Crustasia was also inspired by the crab concept and was later developed into more than just crabs. In fact, this restaurant sells other food in the menu more than crabs.

Raymond mastered the product and developed this in detail for every store defining the market that goes into each store. The Seafood Club offers casual crab dining experience and is good for groups and even offers buffet. The service and the amenities encourage customers to eat and enjoy the crabs. There is a fun environment. For Crustasia, everything is Asian inspired and even the salespersons are Asian looking. It is more pricy because of the service it offers to customers.  Menu is more varied in this case as there was a more in-depth study done to come up with the menu. Crabs were not given the great limelight and so the other things in the menu and the service were seen by the customers. Seafood is still of course the main food sold in the restaurant. Blackbeard is another development of the Seafood Club brand. It is very much the same but it was made to cater to barkadas and groups who wanted to eat out, and grab a few drinks.

Raymond defined the experience he wanted the customers to experience in all his restaurants and developed the product and service to match that. The restaurant is also designed and sized to match the concept.

Action Analysis

Raymond was very successful in his endeavor and he was able to create and define the crab and seafood eating market. He addressed the crab cravings of different people with the different brands of restaurants created by his group. He was willing to divert a bit from the focus on crabs in some of his businesses and it served him well. He focused on the experience he wanted his customers to have and what he believes will click with his target market.

Case Analysis - The Red Crab Group - Camille A. Dela Cruz

ENTREP S20

Mr. Jorge Saguinsin

Case Analysis – The Red Crab Group

Camille A. Dela Cruz

I.               Situation Analysis (Relevant Facts)

·       The first restaurant established by Raymond Magdaluyo’s mother and him in Mimosa Pampanga – Red Crab Seafood and Steaks, was very successful despite of no market/ research study.

·       The family of Raymond Magdaluyo adapted the same planning and execution (no market/research study) when they took the opportunity to open a restaurant in Malate.  

·       When the sales significantly declined in the Malate restaurant, it pushed Raymond to do a market research study both in the Alabang and Tomas Morato restaurant. This is to identify who are the customers the restaurant truly caters, to identify what is the real positioning of the restaurant  and to recalibrate his menu to follow his new positioning.

·       Raymond brought his new learning when he was given the opportunity to open a restaurant in Greenbelt 3 – do a market research study before entering into a new venture.

·       The Seafood Club success story was not only because of the food but also because of the experience that comes with it. The restaurant sold its crabs with all the complete paraphernalia.

·       Raymond was again given an opportunity to open a restaurant in Rockwell Power Plant Mall, and he again did a market research study and at the same time used his learning in The Seafood Club, which is not only to sell food but also sell the whole experience. He focused on these four experiences; liberating, enchanting, fulfilling and transformative.

·       His last seafood restaurant concept – The Blackbeard’s Seafood Island, focused on the target market that was identified in the market/research study Raymond did.

·       All of Raymond’s successful restaurants were due to all his learning from his past experiences but also from what he learned in AIM which focusing on a single product, multi concept approach. He focused on seafood but used different restaurant concepts and formats.

·       He also used his most enlightening marketing lesson in AIM, which is the importance of creating his own segment, and to own this segment, he had to define it in finer detail the elements in that segment. He adapted this learning by making all the elements of his restaurants work around the concept/position he has placed.

·       Raymond believed that change is inevitable so he opened up a different restaurant concept which is Heaven N’ Eggs.

II.              Problem Analysis

I believe that the main problem of Raymond was he ventured into the Malate business without doing what was vital and important before starting a business – do a market/research study. The lack of the study reflected on the significant decline of the Red Crab Seafood and Steaks in the month of April. When he started to plan his execution and thoroughly did a market/research study it definitely turnaround the business in Malate, Alabang and Tomas Morato and eventually led to the success stories of his other restaurants. 

III.            Alternatives Generation

Of course there were several alternatives to be done to address the problem Raymond was encountering.

A.     First alternative, he can create a market research study to identify who are the customers the restaurant truly caters, to identify what is the real positioning of the restaurant and to recalibrate his menu to follow his new positioning.

B.     Another alternative is to create a different concept restaurant other than seafood. This concept could be more adaptable to the Malate target market.

IV.            Decision Analysis (Deciding on best alternatives)

In my opinion, it is important to do a market/research study before entering a business venture. The importance of a study is to identify all elements – goal, objectives, concept, positioning, target market, location, pricing strategy, promotion and advertising strategy and staff, needed to identify to create a business that will definitely work and live for a long time. Market/research study is equal to planning and planning is vital to make an execution work perfectly. Planning gives the person a view of the new business as a whole and prepares the entrepreneur for any possible failure. This view provides the entrepreneur to address the seen potential problems and gives him/her to avoid such.

V.              Action Analysis

The decision was definitely the best decision Raymond could have done. In the case, he took time to do a market/research study before his business would fail in Malate. The market researched helped him identify what was wrong in the business. He then created strategies that will help fix and solve the problems of the business, which eventually led to the turnaround of the business. He used the learning in the Malate case and started to plan and create a market study first before venturing into the opportunity presented to him. This led to the other success stories of his businesses.

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.