ICT World offers both news and analysis on the impact of ICT ( Information Communication Technology) on Restaurant Business from a corporate and consumer point of view.
Caneval Venture discussed the development of ICT, indicated that "The convergence of the telecom, IT and media industries is creating a
large “infocom” market"
The percentage of technology change the competitive landscape: explore and develop new services and build alliance in order to take advantage form Session Initiation Protocol which provides the capability to deliver communication services and application over Internet, Wireless Broadband Access, 3G Mobile Networks, Intelligent and Versatile End-user Devices.(More information go to Caneval Venture). All of these force the companies doing research in ICT adoption in order to keep the competitive advantage. As the U-KO business model we discuss before, the companies seeking the way of enhance the efficiency of their business process and expand their the business scale by ICT.
World is flat because of communication, without restriction of large distance.Mobile, Internet,APP, Vedio Chart makes information exchanges quickly.Customers are open eyes to accept and adopt new products. These promote the companies adopt ICT into their business model.
Thomas,L.F.(April 3, 2005) has introduced 10 flatnners that boost the development of information communication technology.Indeed,this breakthrough in people-to-people and application-to-application connectivity produced, and there are six new ways in which individuals and companies could collaborate on work and share knowledge: outsourcing,offshoring,open-sourcing, insourcing, supply-chaining, informing.These makes it possible to adopt ICT into any industry.
For the restaurants, they could improve their own ICT department but can also outsource their ICT adoption of business process.They do not necessary have great experience in using ICT to launch their products. The third party could make a marketing strategy for them to increase the customer loyalty and spread the reputation. Here is the example.
For the international brand, they can offshoring their business with the help of ICT. Video, Network, Internet, Camera makes the communication and monitoring become possible.Company consolidated their information, better operation management and expand their services.
Reference:
Thomas,L.F.(April 3, 2005). It's a Flat World, After All.The New York Times
Caneval Venture.Vision on ICT and Media Industry. Retrieved from http://www.caneval.com/vision/ictmediaindustry.html
How does a restaurant use ICT to improve its business process?
In order to clearly explain that, I will introduce the business model of U-KO and indicate the use and effects of ICT on it.
U-KO: Interactive Business Model
U-KO is a Korean Restaurant that eliminates cultural barriers by providing an interactive ordering and waiting experience that educates and entertains customers at an attainable price (Sources from http://www.behance.net/gallery/U-KO-Business-Model/1021909).
When we first time go to any international restaurant, we have no idea what the items are on the menu if we do not have the knowledge about the culture and traditional dishes.Most of the time, we order blindly not knowing what to expect. There is a communication barrier in international restaurants which prevents users from having an enjoyable experience. In order to avoid misunderstanding, U-KO creates a platform that are specifically catered for people without much knowledge in Korean culture and can be customized for personal needs. It is designed in different languages and for different eating preferences as well.
The following is the business model of U-KO:
Actually, what does U-KO do? U-KO creates a platform as well as a website for customers getting information about them. Customers can look at the menu with the introduction of dishes and images online before them come to the restaurant. They can order their food and also can create their dishes according to their own preference through the platform. They can use email and IRC to communicate with the staffs.
Chefs will create the products based on the customers' requirements and preference. The platform also build a network with the customers and consolidate all of the process. Video chart helps the restaurant well communicate with the customers and set up good relationship with them, in order to increase customer loyalty.
Customers can use APP, PC based platform to get the information.Since U-KO's target customers are students, Google, facebook, twitter, etc. such a social network program helps the restaurant to spread their information and updated news. These can attract their attentions. Sometimes, when preparing for a journey,these social network platform also are first considered by tourists.
After having dishes, customers are asked to evaluate the food and services of the restaurant by providing coupon. Restaurant keep on the level of services and quality of food to set up good public opinion. Then the website advertising and word of mouth can help it increase customer base.
In order to successfully implement the business process, U-KO should have a good relationship management and strengthen the key partnerships. The platform also can share the information about its partners, suppliers,customers and workers inside the company, help the restaurant build up its community and improve communication, cooperation and efficiency of work.
Furthermore, the interactive platform also can help U-KO manage its financial resources. Each items as following can be automatically recorded through the platform during the consumption of customers.It is easily for the restaurant to manage and analysis the paperless data base. U-KO can easily find the trend of customer demand through the graph or tables.
Staffs should monitor the platform to make sure everything connected effectively. Key resources includes intellectual property,human capital and social capital(partnerships with advertisers and suppliers), financial resources (investment,loans), fixed assets,etc. Computer can collected all of the information about that, but manager still need to monitor all of the process, make sure each function are normally developed. If there are problems, it is easier for the manager figure out the solution and lead the staff to effectively implement the solution.
ICT increase the cooperation of the companies department and also help the companies collect the useful information. It can be more easier for the companies to make the future business plan and enhance their companies culture. ICT is the links between people and can also change the customer behavior (For more information go to: Zhang, Y.& Zhi, L.).Customer are more than happy to have dinner outside.
Reference:
Zhang, Y.& Zhi, L. Research on consumer behavior influenced by ICT using structural equation model.Shanghai maritime university
Daniella, P.U-KO Business Model. Retrieved from http://www.behance.net/gallery/U-KO-Business-Model/1021909
The video is about the estimate of restaurant business in the futures and the role of the social media in the development of restaurant business in 2011.
What is Group Buying? Group Buying also known as collective buying is the web service that offers products and services at significantly reduced prices on the condition that a minimum number of buyers would make the purchase.
First Group Buying company is Groupon, founded in November, 2008. And the first market for Groupon was Chicago, then followed by Boston, New York, Toronto. By October 2010, Groupon served more than 150 markets in North America and 100 market in Europe, Asia and South America and has 35 million registered users. Look at Groupon's business modal (Detail go to: http://samidob.blogspot.com/2011/05/is-groupon-business-model-profitable.html), it is a win-win mode. Customers can have great discount on the products they want and Merchants also can increase the reputation and have large sale volume although with small profits.
How does Groupon work?
With the development, Groupon found that 83% of consumers state that they tell their friends if they get a good deal (Source: JWT Intelligence, December 2010). According to Valpak, 66% of Americans say they are currently seraching more for coupons and discounts than in the past (Eliason, E., Frezgi, Y.& Khan,F.).
Since the enter Barrier of Group Buying business is very low, there are over 500 similar site over the world. LiveingSocial has been described as a serious competitor of Groupon. Googe and Facebook also planned to launch a similar product. The competition are quite serious in the Group Buying industry. The idea of Group Buying also launched in the developing countries. Take China for example, following the market share of Group Buying industry in China. Since the Group Buying business is in the stage of development, there is no market leader in the market and the change of the market will be more frequently than the others.
We can figure out that restaurant business is the NO.1 subcategory that use the Group Buying website according the chart above. For the restaurant point, customers' preference ways for online offers as showed below:
source: Eliason, E., Frezgi, Y.& Khan,F
Group Buying increases the power of buyers compared with the traditional consumption model. In the traditional model, customers has much less powers than merchants because they usually buy products in small volume. Group buying increase the volume which increase the buyer power. And it also increases the customers base of restaurant business, since there are the customers who want go out to have a great dinner but do not have enough money. With group buying, customers can enjoy the luxury restaurant service with low price, which attracts more customers go to the restaurants.
It is no doubt that social network message is another effective marketing strategy for the restaurant business. Frederick,M. (August 26, 2011) reported that people were more willing to use the group buying to seeking cheaper offers than go to the restaurant weeks, the restaurant business felt that they should consider to use this kind of advertising to increase their reputations. Because Group Buying also get word of mouth for the restaurant business. There are more customers through the restaurant then more discussion will occur. People will share the great deal with their friends, families, or partners, the effects will be wildly spread.
In addition, Anand, K. S. & Aron, R. found that "under heterogeneous demand regimes, the sellers is able to use group buying to price discriminate and capture some of the revenues lost by setting a single price across both demand regimes."
However, there are also some risk to use Group Buying. Word of mouth can also be a bad effects. The restaurants are reviewed by more people, restaurants face more challenges to keep and improve their quality of service and food. And Anand, K. S. & Aron, R. also found that "group buying involves delays and uncertainty before the final price is realized, the delay leads to utility decay for all parties and uncertainty coupled with risk aversion leads to further devaluation of the eventual trade". Because the delay the buyers' willingness to buy the offers is lower. The demand will be negative influenced. Furthermore, because group buying attracts the price sensitive customers, the customers might more focus on the price than the restaurant itself. It might be a challenge for the restaurant to build their own customer loyalty. And the quality of dishes that are provide by group buying sometimes are lower than the original orders because of the low price.
With the increased development of the group buying, the restaurants face both the opportunity to set up their reputation and challenge from the competition. They should carefully define their strategy based on that.
Reference:
Anand, K. S. & Aron, R.Group Buying on the Web: A Comparison of Price-Discovery Mechanisms
Eliason, E., Frezgi, Y.& Khan,F.Daily Deals White Paper: Understanding the industry dynamics of daily deals and implications for merchants and consumers Harvard Businesses School, Retrieved fromhttp://www.slideshare.net/HackStartups/group-buying-white-paper
Michael Zeisser, who is a senior vice president at Liberty Media, discussed how does social media amplify the effects of word of mouth in business. He indicates that "Behavior of users is mirrored by their networks of friends, amplifying the word of mouth effect and reflecting well on the underling brands.""As web sites evolve to become increasingly dynamic experiences that let people interact in real time, the value to core users of being recognized for their prominence in a community will only increase." Yelp/"大众点评" are the companies which combines ICT with word of mouth. Here is not only their friends, but also the strangers, shares their experiences and ideas about the restaurant or companies they have been. The communication of the companies will increase the publicity. The revenue of Yelp is $83.3 million in 2011 with a increase rate of 74%, 70% of the revenue is from the local advertising business (More information go to Media 360). Reviewed the business in every category on Yelp on September, 30, 2011, the restaurants account for 30%. (More information go to: http://www.smallbusinesssem.com/foursquare-the-webs-newest-local-search-engine-but-theres-one-big-question/5287/)According to "大众点评"’s experience, 20% of the users are enjoying the review of restaurant and the core users also affect the remaining users' behavior.
What is influence of Yelp/"大众点评" on restaurant business?
Reduce the cost of advertising. Especially, for the small and medium size restaurant companies, they do not have enough money to use the traditional adverting agency such as advertisement on TV or Video, TV show. The cost of advertising in Yelp/"大众点评" are much lower than the traditional ways.
Encourage the cooperation between the restaurant. On April 10, 2008, "大众点评" and Nanjing catering industry representatives announced 300 Nanjing catering enterprises will cooperate to build a food area for Nanjing citizens. (More information go to Enet IT news). The restaurants also provide the coupons or special offer in "大众点评". The share of information and communication create the business opportunity.
Investigate customer behavior, estimate the trend of the market. Both of the companies collected a lot of information about customer consumption. They also provides the information about the best restaurant customer reviewed, the top search restaurant, best dishes customer suggested, ect. All of these information will help the restaurant companies understand the customer behavior and improve their business.
New job opportunity. Since the development of "大众点评", the reviewers become more popular. Different from the traditional professional restaurant reviewer, there are some people who post very good comments on "大众点评" or blog frequently. The reviewers do not need professional knowledge about cooking or restaurant business. Some restaurant even give free try to the best reviewers when they have new dishes. Yelp also create a community for the metric reviewers to encourage the participation. More people are going to enjoy these.
Criticism of reviews. Yelp has been indicated that deleted or shield the bad comments from customers by paid. And "大众点评" also has been attacked by the malign comments. The public opinion could also influence the reputation of the restaurant, so the reliability of comments is considered more important.
More challenge for the restaurant.Customers can follow the information of the restaurant they liked. Compare to the traditional restaurant rating guide, the review is much more frequently. And it is much easier for customer to find the similar restaurant. Restaurant should try their best to improve their quality of food and service because of comparison.
Reference:
Michael Zeisser, Unlocking the elusive potential of social networks, McKinsey Quarterly
When you search for the restaurant rating systems, you would certainly expect them to be unbiased, authoritative and standardized. However, the traditional rating system is controversial. Look at the most well known rating companies: Michelin Guide, AA Guide, Zagat Guide, Good Food Guide, Harden Guide, Design Restaurants, the graph at right hand side shows their decision making process (More information go to: Restaurant Business Uncovered). They are professional teams, the principle they used are only reviewed by professionally trained experts. Some people also argue that whether these professional guide are reliable.
Take the most well know rating companies Michelin Guide for example. Michelin has wide experience when it comes to reviewing restaurants. Most of restaurant are respect if they obtain the star from Michelin. Newspapers, magazines and even the average blog quote its guide. Restaurants will be famous suddenly. However, Michelin has been based in France, their expertise in international cuisine might be limited, since their judgement outside European might has criteria. The restaurants in different countries should have different styles. Moreover, Michelin just have 50 over reviewers, it is hard to ensure all 4000 restaurants reviewed keep up their standards. And there are millions of restaurants in the world, with the limited reviewers, how could customers know each of them. Furthermore, the cost of reviewer and reviewing process are quite high. (Restaurant industry size:http://www.restaurant.org/pressroom/social-media-releases/release/?page=social_media_2011_forecast.cfm)
And you will see that most information of the traditional rating guide are published and update once a year. Meanwhile, the restaurant industry has more frequently change than any other industries. The competition in the restaurant are also very serious. The enter barriers is low but it is quite difficult for the restaurant to sustain their differentiation. Everyday, there might be a restaurant change their location or alters its outlook. That is why traditional restaurant guides that come out in the printed form cannot keep up with current trends.
With the development of Internet, the new business developed. In order to upgrade the traditional rating guide, cover the shortage, the social networking, local search, customer review companies set up. According to the huge bases, here I take Yelp! from US and 大众点评 from China for example.
Yelp!, founded in October, 2004, provides online local search capabilities for its visitors. It provide both online and APP service. Information can be accessed by we or mobile browsers. Restaurants can change their information on the platform and customers can know the updated information in time. Each business listing result contains a 5-point rating, reviews from customers. Customers can share their experience in the restaurant with the others. Since the large customer base, the review could cover more restaurant than the traditional rating guide do. And the listings and related contend are organized by city and a multi-tier categorization system. Customers can search their interested restaurant based on the name, location, country or zip code. Yelp combines local reviews and social networking functionality to create a local online community. It make it easier for the customer to find their related interested restaurant and also helps the restaurants build up their network with the customers. Yelp also has a "First to review" reward system to create a competition among contributing customers, encourage the creation of reviews. And the company also strengthens the online community through off line events such as nightclubs, parties for loyal contributors. Yelp also has a Google Maps application to let the customers search the nearly restaurant according to their location.
How to grow your business with Yelp!
Compare with U.S., China is a emerging market. Not only the development of restaurant business but also that of technology. However, the developed of ICT changed the situation. 大众点评, founded in 2003, is the local rating website for restaurants. As Yelp, the reviewers are customers. Customers rating the restaurants they have been based on the service, price, most popular dish, environment, tastes, style and decoration. And it provides potential customers objective and accurate local restaurant information guide. It also has APP version which has satellite navigation function, helps customers find the restaurant they want. It not only cooperates with Network media company such as Google, Enlight Media but also with the Chinese biggest communication companies such as China Mobile Limited, China Unicom, China Telecom, Nokia ect, introduced the information service to 500 million mobile phone users in China, based on thewireless technology platform such as text message, WAP. Provide the information about restaurants anytime, anywhere. Overall, it attracted 13,000,000 visitors till now, create millions of business opportunity for the local restaurant. (More information about the company:http://corp.iresearch.cn/0409/16024.shtml)
The New Business set off a wave of restaurant industry.
Compare to the traditional restaurant business, what is different now?
Customer Service
Compare with the traditional restaurants service, restaurants online service offers customers the opportunity of have the food whenever and wherever they want. Customer can order their food at home or office instead of driving a long way to have it. And customers can also explore daily update on local deals and new products. In some cases, customer can create their own food based on their personal eating habits.
For example, Papa Johns and PizzaHut introduces a new service online and APP that allow customer view and order menu items directly from their PC and mobile device. They also allow customers create their own pizza. Customers can choose their bread, cheese, vegetables, meats to make their pizza. The process is electrically visualization, which is fun. This is a diversified product, it could not only satisfy every customers' taste but also establish their imagine among customers.
Some well designed websites even combine Google map with their restaurant position, make customer electrically view their way to the nearest restaurant. Customer can also use their APP in smart phone, the navigation satellite system can bring them to their destination. It is easier for customer finding their restaurant. This innovation continue to expand the restaurant customer base.
Feedback Collection The website can also automatically save the customers previous order make the recorder easier than before. It is much easier for the companies to collect the customer preference than before, the website can have the recorders for most popular products through the customers order. And instead of the paper survey, companies use the email, online survey to collect the information. It reduces the operation costs of the companies and saves the employees cost. Management
In contrast, the traditional restaurant service have a normal problem which is waiting time management. The famous or popular restaurants always have the problem with reduce the customer waiting time, manage the business process. Nowadays, restaurants provides their online reservation service. Customer can make their own plan and make the reservation before they come, which reduces the total of waiting time and increases the business process of restaurants.
Network Information of the companies are public. Businesses and network now can be access by a computer. The business opportunity is expended, without limitation of location. The restaurants also can learn and communicate with each other by using ICT products. In other hand, the competitive of the restaurant business will be more serious because of the share of information. Companies are tended to provide more creative, competitive, high quality products and service to customers.
From the inside management aspect, the existence of two or
more computers in an office almost always leads to the creation of a network.
The main advantage of doing so is that resources can be shared e.g. printers,
internet access, files/information can be managed and shared amongst
workstations and the security of information can be better managed through a
network. Increasingly networks are not just confined to the office but are
being adopted so that they allow home working that supports changing
business needs.
In general, E-business developed the restaurant business.
World is flat because of communication, without restriction of large distance.Mobile, Internet,APP, Vedio Chart makes information exchanges quickly.Customers are open eyes to accept and adopt new products. These promote the companies adopt ICT into their business model.
