Porcini’s restaurants an Italian specialty restaurant chain located in Boston Massachusetts, owns and operates 23 restaurants in the northeastern part of the United States and employs over 900 employees. The company’s challenge is to expand its restaurant chain working within its limited resources and brand recognition. Complicated with a saturating domestic restaurant market and major brands currently in the market creates a formidable challenge for Porcini’s Pronto operations. The problem was to determine the appropriate course of action for the company to take between franchising and syndication. Considering using a SWOT at first glance the decision to analyze the different methodologies using Porter’s Five Forces of Competition gave a more robust analysis within the restaurant industry. The choice of franchising was determined the logical choice over syndication for the company from a financial stand point and a quicker way to market to vie with its major competitors. Franchising offered a broader reach with fewer fiscals risks that will help to compete with brands such as Olive garden and Pizza Hut.
Porcini’s Inc. started out in 1969 as a family owned Italian-American restaurant in the Boston Massachusetts neighborhood known as the North End. The company two decades later sold controlling interest to a group of investors the company employs over 900 people and operates in 23 locations. Porcini’s is financially stable. The Porcini’s advantage is its ability to deliver high quality food and superior service uniformly at each of its locations. The James Beard award-winning chef Mariana Molise is responsible for creating gourmet quality meals with her flash cooking techniques at moderate prices. Porcini only uses fresh ingredients making each dish from scratch and displays artful presentations to each of its dishes. However, the cost of the average entrée is only 2 to 3 dollars above Olive Garden its closest rival. Leveraging its brand recognition in New England, Porcini’s chief differentiator from its competitors is its attention to quality. A prominent New England restaurant guide selected Porcini’s as its “Best Chain Service” award for four consecutive years. This accomplishment occurred by a combination of table service and food quality. Porcini’s limited resources and lack of brand power restricts its growth opportunities to the domestic market. Three viable options for Porcini’s growth are carryout locations, catering, and Porcini’s Pronto. The carryout locations and catering became less viable because of managements concern of intense competition with carryout locations and no internal champion with catering expertise to drive the enterprise.
Porcini’s challenge is to maintain its high quality food and service while expanding to grow its market share nationally while competing with major well-known brands. Analysis
Rice (2010) asserted Porter’s five forces analysis is a framework that analyzes level of competition within an industry and business strategy development. It draws upon industry organization economics to derive five forces that determines the competitive intensity and attractiveness of an industry. Attractiveness refers to the overall industry profitability.
Porter referred to these forces is the microenvironment to be contrasted with the more general term of macro environment (Suwardy & Ratnaturnga, 2014). According to Pringle and Huisman (2011) they consist of those factors close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to reassess the marketplace given the overall change in industry information. Overall industry attractiveness does not imply that every firm in the industry will return the same profitability. Using Porter’s five forces analysis in determining Porcini’s decision-making process between franchising and...
References: Pringle, J., & Huisman, J. (2011). Understanding Universities in Ontario, Canada: An Industry Analysis Using Porter 's Five Forces Framework. Canadian Journal Of Higher Education, 41(3), 36-58.
Rice, J. F. (2010). ADAPTATION OF PORTER 'S FIVE FORCES MODEL TO RISK MANAGEMENT. Defense AR Journal, 17(3), 375-388.
Suwardy, T., & Ratnatunga, J. (2014). Business Landscaping for Strategic Advantage: Evidence from a Multi-Sector Study. Journal Of Applied Management Accounting Research, 12(2), 1-15
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