Yangpin's Noodles

Topics: Marketing, Investment, Finance Pages: 5 (927 words) Published: August 16, 2008
Key Issues:

In the marketing case “Yangping’s Noodle” there is one basic theme on whether to open a Chinese-American restaurant in a province in China. With the new insurgence of Americans and other foreigners into China; James an American, would like to open a Chinese-American restaurant. He believes that he will instantly be successful without putting much thought into the planning and execution. Problem Statement

Can James open a Chinese-American restaurant successfully?
List of alternatives:

In opening a Chinese-American restaurant; there are several methods which can be used as part of James’s roadmap to success. James, being an eager entrepreneur has one goal in focus; to open his restaurant and become a success businessman. Of course, there are several decision points throughout the way which have to be made, these are milestones to reach as part of the overall plan. To improve the upcoming analysis and limited scope of the project; here are the following items used for considerations:

Open a Chinese-American restaurant in some province in China •Financial Studies (Demographic, industry, etc…)
Marketing Strategy/Plan

Opening “other” styles of restaurant (Steak House, Italian, etc…) •Relocation of a restaurant “outside” of China

Full funding source as been acquired (personal or commercial funding) •Knowledge of risk (success/failure)

Working with James to understand the planned scope and assumptions; we can now discuss the alternatives on how we can proceed with the restaurant planning. There are three basic approaches James can consider using in his decision making process on how to proceed. Alternatives

1.No research and forced entry into market
2.Researched and full entry into market
3.Researched and limited entry into market

Analysis of the alternatives:

In this section; James will be presented the details of the alternatives presented for the restaurant. Each one of the alternatives will have specific details which will be fully explained to illustrate the pros/cons for each. In addition; all market studies and evaluations of each alternative will be outlined here in detail.

Alternative #1

In this alternative; James will just go with a “gut feeling” and start the restaurant without having a preliminary research or analysis. He will just select his location by what he feels is appropriate and go full force with the maximum size/volume in which he thinks his restaurant will handle.

Quick start-up
Little investment in marketing or financial analysis

Extreme High Risk
No analysis completed
High “to market” barriers of entry are present
No information on the correct sizing of the restaurant or volume

Alternative #2

In this alternative; James has invested some of his capital in preparing a detail plan and analytical model in opening his restaurant. He has asked for a research firm to provide detailed information so he can improve his chances of success. James has reviewed the information provided; however there is still some questions on how aggressive he will stager the anticipated volume/size upon opening. In this alternative; James will take some risk in opening with the largest available capacity day one.

Research will limit high risk status
True understanding of market impacts

Upfront investment of growth/volume made on day one
Large upfront investment can take longer to repay
Large upfront investment can cause restaurant to be unsuccessful •Limited marketing

Research Used

Opportunity and Issue Analysis (SWOT) –Appendix A
Marketing strategy – Appendix B
Implementation Controls – Appendix C

Alternative #3

In this alternative; James has invested some of his capital in preparing a detailed plan and analytical model in opening his restaurant. He has asked for a research firm to provide detailed...
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