University Name

Group Project Phase 1: Competitive Analysis

Case Study of Zara Restaurants and Lounge

Student Name

Lecturer Name

Course Code

Date Submitted: 08 Oct, 2019

Contents

1. Introduction ........................................................................................................................... 3

2. About Company ..................................................................................................................... 3

2.1. Competitive Edge ............................................................................................................. 4

3. Competitor Analysis .............................................................................................................. 4

3.1. Bloomin' Brands – Direct Competitor.............................................................................. 4

3.2. Darden Restaurants – Indirect Competitor ....................................................................... 5

3.3. McDonald’s – Indirect Competitor .................................................................................. 5

4. Market Analysis ..................................................................................................................... 5

4.1. Success Factors ................................................................................................................ 6

5. Conclusion .............................................................................................................................. 6

References ...................................................................................................................................... 7
 1. Introduction

The main objective of any market competitive analysis is to consider competitive strengths and

weaknesses and find market opportunities for the company. It can also help to assess what the

company does best and where improvements are needed (Albayrak, 2015). Erie, Pennsylvania,

United States already has 14,308 businesses with an 11.20 percent market share in the restaurant,

food and beverage area. There are 4,500 hotel rooms in the town. This market assessment study

seeks to examine the volume, scale, and distribution of restaurant establishments (NAICS: 7225)

(Classification Development Branch, 2017). The competitive market research can be used to

determine the actual level of competition at our restaurant. The Erie restaurants deal with

businesses serving food and beverages like grocery stores, discount markets, delicacies, and easy

shopping stores. Restaurants also compete with home cooking. Erie comprises leading

companies such as Bloomin' Brands, Darden Restaurants, McDonald's, Target, and YUM!

Brands.

2. About the Company

Zara Restaurant and Lounge is the name of our startup company and it seeks to create realistic

business expectations in Erie. Enterprises tend formulating the business plan with a highly

optimistic image, emphasize advantages and mask the threats. As a business owner, I have a

stake in this restaurant and a financial commitment to its success. The aim is to have a final

product, financial and marketing plan that not only meets our capital funding needs but is used as

our daily business plan. Our main competitors are divided into direct competitors and indirect

competitors.
 2.1.Competitive Edge

Following are the competitive Edge of Zara Restaurants and Lounge:

1. The vast experience of the owner in understanding market competition, understanding and

running a food or restaurant business

2. The extraordinary and traditional restaurant design and layout

3. Both traditional and international food items with the policy of changing every five months

4. A three-tiered spatial layout that is new in the Erie restaurant industry

5. Organizing employee development and training programs especially for the chefs and head

cooks to make allow the new entrants, trainee and featured chef

6. Management/Chef Stock Incentive Program.

7. Fully strategic marketing campaigns such as Come To Town promotions and sales discount

system

8. Employee appraisal, retention, training and incentive programs

3. Competitor Analysis

The competitor analysis in the city of Erie in the Restaurant, Hotel, Food and Beverage segment

is shown below:

3.1.Bloomin' Brands – Direct Competitor

Bloomin' Brands is one of the leading restaurants in Erie and this restaurant also competes

primarily for Zara, which has developed into a successful restaurant for the district of Erie. 1) the
model tapas appeal for consumers of Erie; 2) the emerging market for after-hours dining; 3)

tapas as a better after-hours dining option (little servings, smaller price); 4).

3.2.Darden Restaurants – Indirect Competitor

Over the years, this restaurant has become increasingly popular and successful as a restaurant for

companies as well as locals. The menu for this market sector is somewhat traditional, but the bar

draws a good crowd. It was clear during this analysis that some guests were seated solely at the

bar and did not intend to dine in the restaurant. “Darden Restaurants are more of a formal dinner

and meet a certain need in the community, but they are not Zara's direct competitor. It has certain

unique elements that have led to its success in the past three years, from which Zara may gain.

3.3.McDonald’s – Indirect Competitor

McDonald's is not currently in the market area of Zara, so the increasing popularity of

McDonald's in Erie and the surrounding area cannot be ignored. McDonald's has some of the

items that Zara wants to figure out. These are 1) a Tapas and Entry list, which indicates

consumers need different food sizes and variants; 2) an experience like a party which will draw

the person crowd and boost bar sales. McDonald's validates some of the characteristics of what

the current Erie diners are asking for in our market research. This is a real affirmation that the

timeline for the Zara Restaurant & Lounge model is right.

4. Market Analysis

At the end of the day, everyone in the area that offers prepared meals is a rival for Zara, as

everyone competes for the same home dinner substitute dollar. There are, moreover, two key

divisions of the restaurant industry: the casual restaurant and the great restaurant (Erie News

Now, 2019). So where is the client most likely to go if the food and service in a fine dining
restaurant than in a casual, but the quality has become a consideration because of the cost-

effectiveness? There is no definitive answer to this question, but in one institution the approach

is to provide the best food at the best price with the maximum level of service. That is the very

essence of price and the idea at the core of the business model of Zara. The Erie Restaurant

Industry Current Scenario is shown in table below (EriePa, 2019).”

Erie Restaurant Industry Current Scenario

Industry Group NAICS Retail Potential Retail Sales Retail Gap

(Demand) (Supply)

Restaurant/Other 7225 $297,905,851 $337,583,327 $39,677,476

Eating Places

4.1.Success Factors

This restaurant business differentiates from the market by the development of a unique and

innovative fine dining experience. The restaurant is differentiated by its unique design and

decoration from the other restaurants in the area. Erie's major performance drivers include a

comprehensive personalized food menu and distribution of most globally and international food

items. The emphasis is on training and development programs for staff, corporate operations and

maintenance costs, and well-defined marketing and advertising plan.

5. Conclusion

From the above competitive analysis the two main things are clear: first the industry is already

being captured by the leading restaurants and food chains of the world and that supply of food

and beverage items in the industry is also high that currently stands at $337,583,327 while the
demand is $297,905,851 so the retail gap of $39,677,476 is clearly visible. However, the

profitability and growth chances are also high if the Zara Restaurants and Lounge focus on

diversified and traditional food items whose demand in the market is high and these are still

unattended areas by the existing competitors.

References

Albayrak, T. (2015). Importance Performance Competitor Analysis (IPCA): A study of

hospitality companies. International Journal of Hospitality Management, 48, pp.135-142.

Classification Development Branch, E. (2017). NAICS Search. [online] Census.gov. Available

at: https://www.census.gov/cgi-

bin/sssd/naics/naicsrch?code=454110&search=2017%20NAICS%20Search [Accessed 08

Oct. 2019].

Erie New Now. (2019). Food Service Equipment Market – 2019 Industry Trends, Size, Growth

Insight, Share, Emerging Technologies, Share, Competitive, Regional And Global

Industry Forecast to 2025. [online]. Available at:

https://www.erienewsnow.com/story/41071855/food-service-equipment-market-2019-

industry-trends-size-growth-insight-share-emerging-technologies-share-competitive-

regional-and-global-industry [Accessed 08 Oct. 2019].

EriePa. (2019). A Competitive Realities Report & Target Industry Strategy for Erie County,

Pennsylvania. Available at: https://www.eriepa.com/uploads/resources/618475_erie-

final-tis-report-05142019.pdf [Accessed 08 Oct. 2019].