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Written Analysis and Communication

Assignment: - WIL’S GRILL

Report No. 1

Submitted by: Soumya Ranjan Mohanty

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Table of Contents

Situational Analysis..................................................................................................3
Problem Statement ...................................................................................................4
Options ......................................................................................................................4
Criteria for Evaluation ............................................................................................4
Evaluation of options ...............................................................................................5
Recommendation......................................................................................................6
Contingency Plan .....................................................................................................6
Reference...................................................................................................................6
Exhibit......................................................................................................................6

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Situational Analysis

John Christ- owner of portable street food business named as Wil’s Grill in Flagstaff,
who love to make his customer happy by serving them healthy local street food.
After influenced by “clean food” movement at NAU School of Hotel and Restaurant
Management, John started Wil’s Grill business with his friend Karl on January 2014.
The main target markets of Wil’s Grill was NAU students who were tired of chain
based fast food and community events where organizers and customers wanted
reasonably priced, clean high quality street food.
Financial Analysis (2014-2016):
Taking Net Operating Income data reference from (Hostetter, Padden, Exhibit 2,
Page.7) Wil’s Grill was going under loss for first two years. On the year 2016, it got
a privilege to serve 40 special public events which lead the company to increase its
net operating income.
The Profit and Loss statement of Wil’s Grill is shown in Exibit-2 of Source: John
Christ – Owner, Wil’s Grill (2017)
Market Analysis (2014-2016):
Wil’s Grill Market segment: (Northern Arizona) (Fig-1)

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It served Flagstaff, along with Prescott, Sedona, Verde, Phoenix, Williams which
collectively held almost 50 events that featured street food. Wil’s Grill had received
excellent reviews from local writers, food critics, customers and was featured in July
2015 issue of Flagstaff Business News. Though there were many large players
already present with an experience of over 20 years, Wil’s Grill focused on clean
food and John received referrals from caterers for specialties Wil’s Grill was known
for- smoked meats and barbeque.
Taking consideration for healthy choices had reportedly increased from 61% in 2012
to 71% in 2014 and in 2015 67% of respondents had given thought to environmental
sustainability, 72% had given consideration to how food was proceed and 26%
regularly purchased locally (Hostetter, Padden, Page.4). There was a growing
interest on clean food in United States.

Problem Statement

John had to take a strategic decision on how he should move forward with
Wil’s Grill and his livelihood.

Options

 To continue with the street food business and expansion of current


business.(1)
 To add catering business with help of some modifications in marketing
strategy. (2)

Criteria for Evaluation

Here the criteria for evaluation is growth of Wil’s Business. Initially business was
not profitable but John Crist’s hard work and passion to serve clean food out
weighted any discouragement. Within the four months both John and Karl paid the
loan amount. Further they did not take any loan even after Karl left the business.

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John as a young entrepreneur, his needs could be satisfied by living a simple life
without much financial obligations. So If required, borrowing capital for expansion
of business will not going to be a burden at this stage.

Evaluation of options

Calculation of ROR in Option 1 (Rate of Return)


It is the Ratio of PBT to total capital investment of year 2017 equals to 36.3%

Calculation of ROR in Option 2 (Rate of Return)


It is the Ratio of PBT to total capital investment of year 2017 equals to 51.1%

Calculation of ROR in Option 1 (Rate of Return)


It is the Ratio of PBT to total capital investment of year 2018 equals to 29%

Calculation of ROR in Option 2 (Rate of Return)


It is the Ratio of PBT to total capital investment of year 2018 equals to 68%

From the above calculations we can easily inferred that


 ROR gradually decreases from 2017 to 2018 in option-1.
 ROR gradually increases from 2017 to 2018 in option-2.

Various surveys and studies conducted in US indicates a growing interest in “Clean


food” movement and it will perform crucial role for Wil’s Grill business to influence
some customer’s food and beverage purchase decision. We can inferred this from
analysis of critical factors of Wil’s Grill (Exibit-1).

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Recommendation

It is recommended that John should enter in to catering business along with his
established street food business. Venturing in to catering business will give him
higher returns in terms of investment, considering his assumptions (Hostetter,
Padden, Exhibit 3, Page.8). He should target most of Northern Arizona metropolitan
areas as his potential market for street food business (Fig-1). It is recommended to
spend more on promotional marketing budget to attract customers. (Exibit-1)

Contingency Plan

In case Wil’s Grill is not able to compete with the already established businesses in
catering, John might consider merger with a larger business and continue his passion
for clean food.

Reference

1. Figure: https://geology.com/cities-map/arizona.shtml

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EXIBIT-1

WIL'S GRILL SURVEY


Know Doesn't know

28%

72%

MARKET DEMAND
Clean Food Normal Food

24%

76%

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CRITICAL FACTORS OF WIL'S GRILL
Local source food Review Service Reputation Food Selection Price

9%
4%
3%

9%

11% 64%