Sentrep CASE ANALYSIS: The Red Crab Group – Kevin Toledo

CASE ANALYSIS: The Red Crab Group – Kevin Toledo

Situation Analysis – Relevant Facts

Red Crab Group started from the first restaurant opened by Raymond’s mother in 1998 at Clark, Pampanga. Red Crab eventually expanded to Metro Manila and has been successful in developing its business of chain of restaurants.

 1998: Raymond’s mother opened the Red Crab & Sea Food Restaurant at Clark, Pampanga in the Mimosa Leisure Park. The price of the food was in the high end as its market was golfers, casino players and high rollers.  

1999: Red Crab and Seafood Steaks was opened at Malate. There was no market research done and sales went below 30% 

2001: Red Crab Seafood & Steak at Tomas Morato was opened where surprisingly it captured the “celebrities” as its market.

Another Red Crab and Seafood & Steaks branch was opened at Alabang. This time, Raymond started to do market research. In this venture, he realized that his market was in the 26-35 years age bracket. He then adjusted the ambience of the Alabang & Morato branch to fit younger crowds. 

Raymond also did repositioning of the brand where he downplayed the Filipino branding and focused in the “International seafood restaurant feel”. He also recalibrated the menu.

2003: Seafood Club was opened at Greenbelt 3. This required Raymond to develop a new concept where the restaurant was intended to be a happy place to entertain customers.

2004: Crustacia was opened at Rockwell. Raymond was also required to develop a new concept for this restaurant where he focused on the restaurant to be Asian themed fine dine. Raymond did an intensive product development & market research in order for the restaurant to be aligned in it concept. Crustacia  was awarded later the “Best Asian Restaurant in the Philippines”.

2005: Blackbeard Seafood Island was opened with a concept of being an “inuman place” for the young professionals who would like to unwind to have a good dinner and a couple of beers after a tiring day from office.

2005: Heaven n’ Eggs was opened at Tomas Morato. This concept was entirely different as it deviated from the original seafood theme of Red Crab.

Raymond was very successful in expanding the business of Red Crab by capitalizing in his mastery of identifying market & what he is selling – Single Product, multi-concept approach.

        

Problem

The problem is business growth and sustainability as Red Crab had been known in developing new concepts where the brain is actually Raymond. Red Crab group must be able to find a way on how they could sustain developing new concepts the way Raymond did.      

Alternatives

1.    1. Red Crab Group will hire internally product development experts.

2.    2. Red Crab Group to create a product development team within their organization which will develop a list of different new concepts they could offer to lessors.

3.    3. Red Crab Group must stick to the single product-multiple concept approach, and relinquish their ownership from non-seafood related products.  

4.    4. Red Crab Group will just have to focus on the restaurant brands they have developed

5.    5. Red Crab Group to keep its position and further develop their management team by investing in trainings in order for the Group to be independent from Raymond in terms of developing new concepts.

Decision

Alternative #3 would be the soundest decision I can think of. Red Crab Group, having its “mother brand” already developed, must just focus on the single product multiple concept approach. They have already created a market for their brands related to seafood and have proven their mastery on that approach. All they need is to do is focus on expanding the market they have created and just further improve the brand. Red Crab Group has been known to be a chain of seafood restaurant concepts and they must maintain to capitalize on it and further improve on it.

      

Action Analysis

Raymond was successful at developing Red Crab as a company with a chain of different seafood restaurant concepts. However, I think he made a wrong decision with the latest move he has done for the company where he ventured into an entirely new concept and deviated from the seafood theme, most especially taking into consideration that the name of the Group is clearly associated with seafood.

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.

Please use this: Red Crab Group Case - Jenny Liquete

Hi Sir,

Please use this instead. I was not able to copy and paste the last part of my paper. 

Thanks!

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The Red Crab Group (A)

Situation Analysis

Red Crab Group has been very successful since its beginning. Aside from the new market segment it created, each of its seafood restaurants has a unique characteristic. Red Crab Pampanga has been patterned after the owner's mother and the market is for an older crowd. Red Crab Seafood and Steaks, fit a younger crowd and its main focus is on crab and seafood with a more international flavor while maintaining some of the favorite Filipino dishes. Seafood Club addressed the need for a happy, casual seafood place in Manila and provided the complete experience through the use of utensils and equipments. Crustasia has a whole new concept with its oriental theme and less focus on crabs. Blackbeard Seafood Island is also differently positioned because it already caters to the after-work, group of friends or barkada crowd and offers beer.

Its approach in coming up with business concepts is very unconventional. It literally followed the advice "Location, location, location!".  It chooses a good location first and from there, it will develop a business concept – identifying the market, price positioning, distributing and promoting of brand.

Red Crab Group has also been consistently expanding and evolving from casual crab and seafood dining to non-seafood. After seven years of focusing on being the top crab and seafood restaurant chain in the country, it opened its first non-seafood restaurant, Heaven 'N Eggs. Although it is not aligned with the company's original product and service positioning, Heaven 'N Eggs was still successful and Raymund wanted the Red Crab Group to now be more than just a crab and seafood group. Unlike the rest though, this restaurant does not have a new concept that can set it apart from its competitors.

Problem Analysis

Red Crab Group does not perform a market research before it chooses a location or create a new restaurant concept. Instead of creating a business plan to study all aspects of the new business, it always start with the location and work from there. As Raymund put it, these are "accidental projects". It was mentioned in the case that it did not do any market research when it built the Red Crab Malate, Tomas Morato, Seafood Club, and Crustasia. In short, it always bases its business concepts on the available location. Although this flexibility has been proven successful since the beginning, it is a very risky move. It might choose a location that does not have a market that it can cater at all or the market is unprofitable.

In relation to this, since the expansion has already taken very different steps (seafood to non-seafood), Red Crab Group is already veering away from its original vision which is to be the top crab and seafood restaurant chain in the country. Heaven 'N Eggs was successful but it does not guarantee that the next non-seafood restaurant chains of Red Crab Group will be as successful. Red Crab Group has been successful in its seafood restaurant chains because it was able to create their own segment which is the casual crab and seafood dining segment. Heaven 'N Eggs and other similar business concepts in the future might not be as successful because there is still nothing new. Heaven 'N Eggs only offered a variety of breakfast food which can also be found in other breakfast restaurants. The F&B market is already congested with these types of food.

Alternatives Generation

Red Crab Group must address its current approach in creating new business concepts. It can continue with the tried-and-tested unconventional approach of literal "location, location, location" or it can use a more comprehensive approach by using an extensive market research before selecting a location and choosing a new restaurant concept. The first option has already brought huge success to the company. It has been able to use its locations to its advantage resulting to creative and fresh concepts. It was able to adapt well and work with its locations. The second option is more advisable if the concept will be very far from its expertise like Heaven 'N Eggs. The second option is also safer because the company will be able to look at all aspects of the new business however it entails more cost and time to implement because it would need resources to conduct the study.

Another decision that Red Crab Group must make is to stick with its original concept of crab and seafood restaurant chains or continue to expand to non-seafood restaurants like Heaven 'N Eggs. If Red Crab Group chooses the first option, it raises questions such as if can still improve its business given its wide success and already multiple business brand concepts and if the market for crab and seafood is already stagnant. If Red Crab Group can surpass these two issues, it would be better if it chooses this option because it is already the leader in this market and there are only still few restaurants with a similar concept. They can take advantage of it given its untarnished creativity and continuous flow of new ideas. Choosing to expand to non-seafood restaurants raises the question on how it will maintain its success. Non-seafood market is already congested in the country and many companies have already tried coming up with their own gimmicks to attract customers but only few stand out. If Red Crab Group will be able to find a unique product/service, it will definitely benefit the company since it will be getting the market share for non-seafood also.

                Another alternative is to stick with the original concept of crab and seafood restaurant chains but instead of focusing in Philippines only, it will bring the restaurants to other countries also. Since Red Crab Group claims that it wants to become a house of world-class restaurants, its quality of products and services will definitely help achieve its success worldwide. Red Crab Group can also alter its recipes to better satisfy the tastes of the other countries.

Decision Analysis

Red Crab Group is still lacking enough research and expertise to proceed with the non-seafood market. Non-seafood market is also highly congested. These will make it difficult for Red Crab Group to succeed if it pushes through with the non-seafood market. In addition, it is still very successful in its crab and seafood restaurant chains and the market is not yet congested. If it chooses to focus on this alternative, it can also push through with the alternative of bringing its world-class restaurants to other countries, opening the company to more success.

With these reasons, in the short run, Red Crab Group should choose options one and three – stick with the original concept of crab and seafood restaurant chains and work on bringing the restaurants to other countries. To get the most out of the all the opportunities of the three alternatives, Red Crab Group can focus first on the crab and seafood market until it gets saturated. In the long run, Red Crab Group should go with option two and make itself distinct in the non-seafood market. It can use its company image to its advantage and have its customers from the crab and seafood market support them for the non-seafood restaurants as well.

Action Analysis

                To evaluate the decisions, Red Crab Group should study if there is a positive response from other countries. It should also check if its crab and seafood market is still growing or if it already stagnates in one point despite the different attempts Red Crab Group will use to differentiate a business concept from another. Lastly, it has to regularly oversee its company image to its customers and ensure that its operations are always aligned to its vision and mission.

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.