Pesto is a new fast-casual Italian restaurant serving pasta and pizza dishes made-to-order in under 5 minutes. Their competitors are “fast-casual” restaurants which typically take orders at the counter, offer higher quality and more customization than fast food establishments, without providing the full tableside service of sit-down restaurants. “Fast-casual” brands are differentiated each with their unique tastes and styles.
While costs vary widely, fast-casual restaurants typically cost between $150,000 and $1 million to set up just one store and a typical store needs several locations to be profitable. Furthermore, any new restaurant needs to create a menu, hire employees, and obtain the proper health code certifications. All this comes before expenses to build the restaurant’s brand. Once operational, fast casual restaurants typically see their largest expenses in food and labor. Like most “fast-casual” restaurants, Pesto serves a wide variety of customers for lunch and dinner.
Identify two of Porter’s 5 Forces that present a high threat for Pesto in the fast-casual restaurant industry (as opposed to the fast food or full service restaurant industry). Which of these two forces presents the greatest threat? Why? Recommend an action Pesto could take to mitigate the threat.
Instructions
You are provided with a short research scenario about Pesto, a new fast-casual Italian restaurant serving pasta and pizza dishes made-to-order in under 5 minutes. Do external research and identify two of Porter’s 5 Forces that present a high threat for Pesto in the fast-casual restaurant industry (as opposed to the fast food or full service restaurant industry). Focus on the most critical forces challenging the company in the given context; Detail the two high-threat forces; Which of these two forces presents the greatest threat? Why? Recommend actions/strategic initiative(s) Pesto could take to mitigate the threat.
Organize your research into a research memo of about 700 words. Please use research to support your thoughts, and make data-informed decisions. For formatting, use Times New Roman 12-pitch font; and include proper citation of sources as appropriate.