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
