Evaluate the unique resources and core competencies

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Reference no: EM133188555

Question - Three years ago, Big Plc purchased the fast-growing restaurant chain Oliver's Limited from their charismatic, innovative founder and award-winning chef Oliver Pratt. The restaurants were situated in excellent locations and normally in slightly unusual premises (converted pubs and banks). When Oliver ran the company, each restaurant had its own manager who worked carefully with Oliver to create the relaxed dining environment which gave the company its excellent reputation. After purchasing Oliver's Limited, Big Plc restructured the company. Regional managers were appointed, and the company was split into four divisions each based in a different part of the country. The regional managers were given total control over their restaurants and are able to set their own prices. The performance of the regional managers is measured by two key performance indicators (kpi), which if exceeded resulted in the regional manager gaining a substantial bonus. The kpi's the managers are measured against are the utilisation percentage (occupied tables/available tables) and the return on investment (ROI).

Despite positive financial results, the company is concerned, a recently commissioned customer survey showed that 35% customers rated the experience as disappointing and only 55% said that they would come again.  The information below relates to the company's financial performance over the last three years:      


Year Ending

May 2019

£'000

Year Ending

May 2020

£'000

Year Ending

May 2021

£'000

Revenue

£17,399

£19,124

£21,346

Purchases (variable costs)

£4,680

£4,800

£5,230

Expenses:




Staff

£2,704

£2,825

£3,136

Building Repair & Maintenance

£521

£531

£542

Other Building Costs (rent etc.)

£5,264

£5,904

£6,867

Marketing

£851

£1,089

£1,220

Other Fixed Costs

£2,032

£2,089

£2,218


£16,053

£17,239

£19,212

Profit

£1,346

£1,886

£2,134

Net Assets

£10,304

£10,872

£12,159

 

Key Performance Indicators




Return On Investment (ROI)

13.1%

17.3%

17.5%

Utilisation %

58%

63%

65%

Other Operating Data




Number of Restaurants

16

18

21

Total Customers in the Period

400,896

489,110

585,144

Required - Evaluate the unique resources and core competencies that were being used by Oliver's Limited to achieve its competitive advantage before it was taken over by Big Plc.

Reference no: EM133188555

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