Bistro Cafe

Introduction

With its grand opening just a week away, Bistro 2010 faces the daunting task of determining the final prices of its dinner menu. As a part of Hotel Britannique, a brand-new luxury hotel located at the centre of the shopping and financial districts of downtown Toronto, Bistro 2010 aims to cater an upscale clientele. The pricing strategy employed must therefore reflect the restaurant's fine image while ensuring profitability.

Dubois, maitre d'hotel and manager of the new restaurant, realizes the need to determine the (1) cost of raw materials, (2) preparation time, (3) minimum number of servings per preparation, and (4) the difficulty level of preparing each dish. It has also been stated that as an estimate 30% of the kitchen staff's time is spent on prior preparations of intermediates, which can be used in numerous dishes. In practice, the cost of raw materials increases due to wastage during preparation, imperfections in measurement, fixing up recipes, and mistakes during preparation. He has also made provisions to accommodate the cost of feeding the kitchen and dining staff, spoilage of raw materials, and pilferage.

In establishing prices for the dinner menu, Dubois realizes the importance of using the appropriate pricing strategy. Since his and the restaurant's performance will be measured based on the effective utilization of the assigned budget, Dubois must conduct a thorough analysis of the restaurant's potential clients, as well as its competitors. This report outlines the steps that must be taken to develop an effective pricing strategy while considering the internal and external factors that play a role in determining the restaurant's success. The strategic analysis involves a discussion of the strengths, weaknesses, opportunities, and threats associated with opening a new restaurant in the downtown core (Appendix A). An industry analysis was also conducted in order to better understand the level of competition faced by Bistro 2010 (Appendix A). This analysis was then applied to the overall pricing strategy in order to determine competitive rates for the dishes offered at Bistro 2010.

Strategic Analysis

Final menu prices for Bistro 2010 are reflective of both quantitative and qualitative considerations as the restaurant's future is directly impacted by raw data calculations and by economic and social trends. SWOT [Appendix A] and Porter's Five Forces [Appendix B] are the two industry tools which will be utilized for analysis. The results of the analyses are presented in the following.

Bistro 2010 is associated with the network of L'Union des Grands Hotels (UGH), a highly reputable hotel chain which has wealth of experience and resources to manage luxury restaurants and hotels. Furthermore, the maitre d'hôtel and manager, Adrien Dubois is a long-time employee