Seven key factors affecting the performance of Chinese catering enterprises

1. Consumption elasticity:

Higher consumption elasticity. This is a major feature of the Chinese catering industry. The consumption elasticity of Chinese catering industry is much higher than that of fast-moving consumer goods industries such as packaged food, beverages, tobacco and alcohol. Even if they are both catering enterprises, there are great differences in consumption elasticity in different regions, styles and cuisines. Usually, the consumption elasticity of home-cooked dishes is low, while the consumption elasticity of high-grade dishes, seafood and specialty dishes is high.

Studying the consumption elasticity of different styles and cuisines can help Chinese catering enterprises to formulate correct development strategies and competitive strategies, and improve their profitability and ability to predict and grasp consumption trends.

2. Product life cycle:

All industries, technologies and products have life cycles without exception, including four stages: introduction, growth, maturity and decline, and so does the catering industry. By means of business combination, category combination, product innovation and integration, its life cycle can be prolonged, the return on investment can be shortened and the operational risk can be reduced.

product life cycle management allows catering enterprises to make tendentious judgments on consumption trends and trends and product sales before competitors, so as to avoid falling into a passive situation of following the trend. This can help catering enterprises improve profitability and reduce operating costs and risks.

In the early years, spicy crayfish and spicy crabs were popular in most parts of China, and many catering enterprises benefited from them. However, in less than three years, spicy crayfish and spicy crabs have declined, and many enterprises blindly following the trend are also facing losses.

3. Product risk management and consumption trend:

Chinese mainland is a vast country with great regional and cultural differences, and the great differences in purchasing power, consumption habits and dietary tastes will also have a great impact on catering enterprises. In addition, all catering enterprises are facing the challenge of seasonal risks, but in specific aspects, each style of cuisine has different ability to resist seasonal risks. Usually, the seasonal cycle of hot pot products is the most obvious, and its business performance fluctuates periodically. Therefore, making different product strategies and product combinations in different regions and seasons can greatly reduce seasonal risks.

China government began to implement the family planning policy in the late 1971s to control population growth. Now, these baby boomers who were born in the early 1981s have basically gone to the society and become independent economically. Their consumption concepts and habits are obviously different from those of their parents' generation and even those born in the 1971s. In a nutshell, their consumption concept, values, behavior orientation and aesthetic consciousness are more westernized and less influenced by China traditional culture. Their generation's daily life is deeply influenced by American consumer culture such as McDonald's, KFC, Coca Cola, Pepsi Cola and Starbucks, far exceeding that of their parents. It is extremely important to study the values, consumption trends and lifestyles of their generation for the future development of Chinese catering enterprises. McDonald's and Yum! Brands have invested a lot of money in this field and set up special business departments to conduct long-term research and investigation. However, most Chinese catering enterprises have done nothing in this field.

iv. market capacity:

in a strict sense, market capacity includes several dimensions such as market size, competition intensity, urban population structure and purchasing power level. Usually, large and medium-sized cities with permanent residents of more than 3 million have relatively large market capacity and fierce competition with immigrant cities; Cities with a population of less than 1 million have a relatively small market capacity, but they may also have strong purchasing power. Therefore, the actual market capacity is not the demographic population, but the combination of the number of target customer groups, purchasing power and consumption habits.

Studying the market capacity can help catering enterprises make a comprehensive and systematic analysis before choosing to enter an emerging market or set up a new branch, thus avoiding the risks caused by investment mistakes.

5. Consumption motives and inducements:

Although the customer groups of catering enterprises with different cuisines and different prices overlap each other in actual consumption, there is no clear dividing line, but the consumption motives of their respective customer groups are quite different. For example, the same is a banquet, and there are significant differences in consumption motives when entertaining customers, colleagues, friends and relatives. These differences under different consumption motives will have a great influence on the final decision of the diners when choosing which style, which price, which location and which restaurant.

the study of consumption motivation can help catering enterprises to examine their own business direction and business orientation and avoid falling into the misunderstanding of blind competition; The study of consumption incentives can help catering enterprises to better understand the consumer's purchase decision-making process, so as to find out what needs to be improved or adjusted, and formulate targeted promotion strategies.

VI. Expansion management:

For enterprises, the most important thing is cash flow. Cash flow is as important to the survival of an enterprise as human blood. The biggest feature of the catering industry is abundant cash flow, and there is almost no trouble with accounts receivable; The biggest problem is that financial management and capital operation are not valued by managers.

The complexity and diversity of Chinese catering make it difficult for enterprises in this industry to achieve standardized production. Different chefs are likely to make two flavors with the same raw materials and processing flow. Therefore, the most difficult part in the standardized operation of Chinese food enterprises is the standardization of food production and processing.

due to their own strength and the pursuit of scale, most Chinese food enterprises will choose brand joining to expand. But in fact, the management difficulty, management range and management risk of brand franchise stores make many Chinese catering enterprises flinch and stumble. There are two opinions in the industry about whether Chinese food enterprises choose to join or expand on their own. Due to the limitation of space, I won't discuss in detail here (I personally think that at least at present, most Chinese food enterprises in China don't have the management ability of western fast food franchise chain like KFC and McDonald's, and to achieve steady expansion, they still have to rely on the way of direct stores).

Weak strength is an important factor for the slow development of most Chinese catering enterprises, but it is by no means a decisive factor. To achieve steady and rapid expansion, in addition to joining, financing in the capital market or attracting strategic investors is also a good way. However, in the current domestic Chinese catering enterprises, there are very few successful financing in the capital market. Therefore, after Chinese catering enterprises have reached a certain scale and management level, it is a good way to choose to go public on the Hong Kong Stock Exchange or Singapore for financing. However, in order to be listed successfully, the requirements for the sustainable profitability, corporate governance structure, operational management level and financial system of catering enterprises are quite high, which makes many catering enterprises unable to cross in the short term. Yiyong Bixin believes that for some catering enterprises with good operating conditions, if they cannot meet the conditions for listing after reaching a certain scale, they may wish to consider introducing strategic investors. At present, there are many investment banks and venture capital companies actively involved in the Chinese food industry in China, and I believe there will be more and more such institutions in the future (the financing method and corporate governance structure after financing will be introduced in the next article).

many people are debating whether to be bigger or stronger. Being bigger is the inevitable performance after being stronger; Being strong is a prerequisite for being big.

VII. Application of information technology:

Information technology has had a profound impact on human beings. While many traditional industries have stepped into the highway of information technology and achieved great results, the catering industry is still wandering outside the door of information technology.

catering enterprises have two major operating costs: venue rent and personnel cost. And some advanced information technologies can not only reduce the personnel cost by at least 31%, but also reduce the costs of procurement, logistics and warehousing, reduce losses, improve the management level, improve the response speed and accuracy of customers' orders, and even have a revolutionary impact on marketing methods.

At present, the most widely used information technology in the catering industry is only at the primary level such as POS and computerized accounting, and only a few catering enterprises have adopted advanced information technology, such as wireless PDA ordering technology. But it involves Demand Management, Customer Relationship Management, Supply Chain Management, Customer Relationship Marketing, There is still a long way to go in financial information management and even the application of Enterprise Resource Plan.