Small Business Management Group Project Sophia Wiest

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Pennsylvania College Of Technology *

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Marketing

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Jan 9, 2024

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Small Business Management Group Project Sections: Industry and Marketing Analysis Industry Analysis: Is a SWOT included? If not, does the plan adequately identify the company’s strengths, weaknesses, opportunities, and threats? A traditional SWOT analysis is not included in the business plan, meaning that there is no clear section in the business plan that lays it all out in one section. La Salsa’s Strengths, Weaknesses, Opportunities, and Threats seem to be scattered throughout the whole document. As listed as some of the strengths in section 2.3 “Company Locations and Facilities”, they are saying that their locations for La Salsa would be a benefit because it is by a mall and has a lot of high traffic that passes through there. A weakness that isn’t directly stated in this business plan but something I think that is a weakness is the price that they are charging for their found. They stated that a person on average would spend between $5-$8. Personally, I don’t see how they are going to make a profit from their food cost especially if they plan to use fresh ingredients. An opportunity that they have and should take advantage of is being relatively close to the University of Oregon. They should plan to advertise, and it might be a good idea to host a catering event on campus, so the college students get interested and want to come back to the restaurant for more. They also have an opportunity because of the expected growth that is supposed to occur to the city in the next few years. The Threats that are listed would be under section 3.3 “Main Competitors”, They have listed all the other local Mexican restaurants that would be a potential threat to them and get in their way from making a profit. Again, even

though there is no dedicated SWOT section I thought that they still listed each element in their plan. I think it would be better and a lot clearer if they made a visual or chart breaking down each of them and explaining which ones are the strengths, weaknesses, opportunities, and threats so that there is no confusion. Are the key success factors of the industry identified? If so, what are they? If not, what do they seem to be based on what is in the plan? Stated in section 1.3 “Keys to Success” they have stated five different keys to success factors: Location, obtaining bank financing at reasonable interest rates and securing individual investors, Hiring qualified motivated employees, effective marketing, and providing extraordinary food with unparalleled taste. Who are the key competitors and is it specified how this company will outperform them? The key competitors that they have listed under section 3.3 “Main Competitors” are “Burrito Boy”, “Santa Fe Burrito”, “Burrito Amigos”, “Ritta’s Burritos”, and “Las Brasas”. They briefly explained each location and what they are known for and the amount of people that they get as well as the location. They said that most of these restaurants tend to serve canned products and how La Salsa would outperform them would be that they would use fresh products that would be prepared right in front of the customers. Comparing themselves to “Burrito Boy” they said that their prices would be similar to theirs, and they said that La Salsa’s atmosphere will be a lot cleaner and more comfortable. Comparing themselves to “Santa Fe Burrito” they say this location is very dirty and has a far from fresh feeling. This location also uses canned food products, but has a decent location. Comparing themselves to “Burrito Amigos”, “Ritta’s Burritos”, and

“Las Brasas”, these three locations have the taco stand feeling and there is no comparison between these three locations and La Salsa and these restaurants aren’t really seen as big competitors. Are there significant barriers to new entrants? I would say that the only barrier that would prevent people from coming into the restaurant would be how there is only limited parking available at the location. Not a lot of people like it when they can not find a parking spot and end up leaving and going elsewhere. That is the only thing that I see in this business plan that alludes to any restraints that they have trying to get people in. Something else could potentially be a barrier is that people may try La Salsa once not like the food as some of their competitors and not return to La Salsa. Again, this business plan doesn’t have a clear statement on what barriers they would have. Market Analysis: Is the target market clearly identified? If so, who is the target market? As stated in the business plan under section three they claim their target market will mainly come from the 2000 Census saying that they will potentially have 150,000 customers in this developing plan. Another major source of potential customers will generate from the University of Oregon who at the time currently had over 20,000 students attending, along with local high schools’ students. Finally, there is a hospital with around 3,500 people, but potentially could have a declining rate of people. This decline would be if the hospital would move locations and then this current hospital would remain only as an emergency room. To summarize it looks as if they want to

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appeal to the younger generation if their target market is mainly the high school and university students. Under the 3.2 “Target Market Segment Strategy”, they say they want to appeal to almost all ages, genders, races, and incomes. What is the projected demand? Is there data from various sources to support the projected demand for the product/service offerings? As proposed in the business plan under section three there are multiple charts. There is a pie chart identifying the amount of people they expect from each location. Underneath is a chart that identifies the growth percentage from the four main places that they expect their market to generate from over the next five years. They project a growth for all except the hospital since the hospital could potentially move locations. Under section 3.2.1 “Market Trends” they discuss more about how the city of Eugene is a rapidly developing city and that there are many new developments to the city that would potentially attract crowds and would generate more potential customers. Is the pricing plan appropriate? Are prices comparable to key competitors? In section 3.3 “Main Competitors”, they have stated a variety of different Mexican restaurants and fast food places. They said that they would like to step away and separate themselves from the fast food and drive thru Mexican restaurants. La Salsa is pricing their food higher than the fast food Mexican places because their food quality will be better because instead of using canned products like their competitors. La Salsa’s substitute will be providing their customers with fresh products and prepared it in front of their customers eyes. I think their ideal pricing point that they are trying to compare themselves to is that they are going to be more expensive then fast food places, but not as expensive as a traditional sit-down restaurant. In the business plan they say that their food

will be 20%-50% cheaper than sit-down restaurant prices. They then state in section 4.1.1 “Pricing Strategy”, that La Salsa’s food will moderately be priced, and the average range would be $5-$8. Pricing themselves at an in-between price point could help or hurt them. Price comes down to the overall atmosphere that you are in. Say that you are in a rundown restaurant and the service is terrible and the food is not that great, and the place is falling a apart. Do you think the customers are willing to pay top price for the subpar service that they just reserved? I know I wouldn’t. Vice versa say that you are in a more high-end atmosphere and the service and drinks are great and the place has high and positive energy. Do you think the customers would be more willing to pay that extra money because they enjoyed their time there? They sure would. What I’m trying to get at with La Salsa I think that their location and atmosphere should be higher end then the tradition fast food places. If they want to price their food higher because they are using fresh ingredients, then they better have an atmosphere to back it up with. What is the promotional plan? Is it appropriate to the business? Under section 4.1 “Marketing Strategy” they discuss how they will market their business and how they will get people in the door. They say that they don’t want marketing to overwhelm their business, so they are going to keep it simplistic. They express that they will be using Cost Effective Marketing as one of their key success factors. They are going to use a combination of local media and event marketing to advertise for each location. Once construction is finished in the city of Eugene, they will use radio as their most cost- effective marketing along with local print media, and college events on campus. They also have a list of places that they could possibly advertise at along with those costs and the contacts. They also want to advertise close to the college campus, which makes sense

because it sounds that it would be relatively close by. Also, they state that at this location there would be limited parking so it being close to campus would be appropriate because students may not have a car on campus to drive places. With the location being in walking distance of main attractions would ideal for them so that people could park and then be able to walk around and do a variety of activities. What else do you need to know? They discuss the sales forecast and how the prices of products may increase or decrease, but they don’t plan on having to constantly change their prices due to the cost of their product. They also state that the sales might end in a sharp decline during the summer months since no students at the university’s will be on campus. They also provided charts from multiple other La Salsa franchisees on the amount of sales and revenues that they have produced.

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Small Business Management Group Project Sophia Wiest

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