Showing posts with label Red Crab Analysis by Lea Olegario. Show all posts
Showing posts with label Red Crab Analysis by Lea Olegario. Show all posts

Thursday, March 21, 2013

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.