Development of Hospitality, Tourism or Events Facility

...

ii. Bargaining Power of Buyers

Buyers are price sensitive thus they have the power to influence the price. For instance, there is potentially lower the price for customers if the products are similarity in the market. In this case, there are lots of restaurants nearby. And Oliver's Super Sandwiches can attract different type of age, younger, elderly, family, and couple. As a result, the bargaining power of buyers is medium.

iii. Bargaining Power of Suppliers

Referring to restaurant business, the bargaining power of suppliers is low, because due to high competition among suppliers. Alternatively, building greater loyalty and long-term relationship with suppliers can improve the quality of products to customers.

iv. Threat of Substitutes

High level of substitution switches customers to substitutes due to similar products in casual fast dining business. The threat of substitution is low as few of similar product with low to medium price in New Town Plaza.

v. Intensity of Existing Rivalry

There are lots of competitors in restaurant business, however, for example, chain restaurant can lower the selling prices of product as economies of scale and make customer to buy as lower prices (Davis and Books, 2013). Davis and Books, (2013) point that the important information of visiting existing restaurant such as the quality of food, service, menu, pricing policies and the estimate the turnover of the competitor.

2.2.3 Location analyse

According to Shatin Districtcouncil (2014), population Profile of Shatin District which is the most populous administrative region of Hong Kong and is also a well development of new towns, it mainly for residential use and about 60% of the population living in public housing, rental housing, Tenants Purchase Scheme and Home Ownership estates, also many school nearby. There are about 29,000 people living in about 48 indigenous villages. Due to the demographic advantages, Shatin is at the core of New Territories in Hong Kong. The main shopping mall that New Town City always attract customers from the local area and easy to target tourists from mainland China market.

2.3 Finance

2.3.1 Funding Sources

It is necessary to consider about the funding which is from direct or indirect sources. Most significantly of financing for restaurant business comes from private sector such as franchises, leasing and sponsorship. Furthermore, financing is also able comes from bank lending or equity capital from public market. On the other hand, these capitals will used to develop the business for several purposes such as creating new or existing facilities replacement, purchasing properties for financing acquisition, lowering the costs of finance and renovation by refinancing for maintaining the competence of business aim to generate the potential income. Consequently, it is necessary to consider which kind of financing should be adopted and how to use these funds to develop or extend the business.

2.4 Legislation

Apply for a general restaurant License from Hong Kong Food and Environmental Hygiene Department (FEHD) before commencing business operations. Restaurant License requires the following additional licenses or permits. Liquor License, Import License, Bakery License, Food Factory License, Non-bottled Drinks Permit / Frozen Confections Permit / Milk Permit, Restricted Food Permit, minimum wage ordinance, statutory no smoking areas, etc.

3. Conclusions

All in all, due to the competition and the environment in casual fast dining business is widely aggressive ad complex currently. In such a climate, “To success, a restaurant needs the good location; food, atmosphere, and service to attract a substantial market (Walker, 2002)." As a consequence, the company should create a unique entity in the market as well as develop of its product carefully. According to there are many fast casual dining in Hong Kong, thus, the aggressive competition causes the profits reduce when competitors lower the price. Consequently, it will cause the whole industry reduce the price to sustain in the market. (Words count: 1498)

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