Father And Son Pizzeria Case Study Examples
In 2007, Carlos Vega and his wife bought the Father and Son Pizzeria. After purchasing the restaurant, Vega incorporated many changes in the business that led to improvements not only in the restaurant and its offerings or services but also in the pizzeria’s revenue. Vega added selections in the menu. To address the parking problem, Vega opened up for take outs. As a hands-on owner, Vega made the sauce himself. Vega’s sauce became one of the restaurant’s bestsellers. To take advantage of this opportunity, Vega decided to put sauce in bottles and include it in the restaurant’s offerings. Eventually, the restaurants revenue for the bottled sauce outdid the revenue for the restaurant’s menu.
Despite the relative success of the restaurant, the pizzeria is still not selling as Vega hoped for. For this reason, Vega and his wife decided to make changes to increase revenue. Mr. Vega has two options to expand the businesses by adding more tables and increasing the cost of products to sustain the business while relying less on take-outs, or to sell the pizzeria and simply focusing on selling tomato sauce in mason jars as a wholesaler considering that it is one of the restaurant’s bestsellers.
Based on the current situation of the pizzeria, the second option is expected to yield better outcomes for Vega. The comparison of both options show that keeping the restaurant will not guarantee increased revenue in the coming years. First of all, the parking problem is limits the capacity of the restaurant to accommodate customers. Even if the restaurant moves to another available location, the parking space in the area is still limited. Second, Vega cannot afford to increase the cost of menu offerings due to the restaurant’s limitations in terms of service.
On the other hand, selling the restaurant and focusing on producing sauces leads to better outcomes for Vega. Sales of Vega’s sauces in the past prove that there is a promising market for his product. Furthermore, Vega’s experience and knowledge of Italian cuisine allows him to explore other opportunities to expand the business, such as creating other sauces. Another reason why this is a more viable option is because Vega can expand its market share by offering its sauce products not only to individual customers but also to other businesses such as specialty stores and restaurants among others.
The difficulties and complexities of outsourcing and the threat of the competition may be challenging but between the two options, the second one offers better outcomes for Vega. The key is to start small so Vega would eventually learn and master outsource production as a means to distribute its products. Based on the case, Vega have family and friends who are in the restaurant business. Vega could begin with distributing its products to family and friends to see how he would be able to produce, package, and distribute its products. From there, Vega may then begin to expand not only by offering new products but also distributing its products to other restaurants and individuals.
Overall, accomplishing the goal of transitioning in the business requires that Vega learn more about outsourcing, particularly in terms of increasing its production of sauces based on the scale of demand and adopting means to distribute the products and reach potential markets. Vega may accomplish this by starting small and learning from the experience of selling sauces to family, friends and existing consumers. Moreover, doing so necessitates advertising and promotion. To target other potential markets such as restaurants and specialty stores, Vega should learn to build his business by improving its reputation and image and promoting its services to potential market segments.
Hatten, Timothy. Small business management: Entrepreneurship and beyond. Florence, KY: Cengage Learning, 2015.
Knowles, Ronald A. & Castillo, Chris. Small business: An entrepreneur’s plan. Florence, KY: Cengage Learning, 2010.
Minnit, Maria, Zacharakis, Andrew & Spinelli, Stephen. Entrepreneurship: The engine of growth. Westport, CT: Greenwood Publishing Group, 2006.
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