Managing People, Finance and Marketing

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Marketing

Background

Cambridge has a significant economic magnitude from the medieval era. Bob and Lloyd decided to set up their new business of Hamburger Restaurant at Cambridge where so many local and national players of this sector have established small and medium sized enterprises and gained market reputation. Hamburger Restaurant intends to compete with existing companies by means of high quality products, exceptional customer service, and quick response to the customers needs with high emphasis to increase awareness among the target groups and market share within the extremely competitive fast food market of Cambridge.

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SWOT analysis

To evaluate the business environment of Hamburger Restaurant, it is essential to study the strengths, weakness, scopes, and possible threats –

  • Strengths: Hamburger restaurant has some stronger points to recover from recession, for instance-
    • Mintel (2010) reported that in spite of the financial crisis, convenience continues to drive customers’ purchasing behaviour;
    • It has financial capability to expand menu, for example, breakfasts, coffee and snack;
    • It would maintain well trained chefs and dealers;
    • Bob and Lloyd have business experience to make profits;
    • Familiarity of the products,
  • Weaknesses: Hamburger restaurant has some weaker sides, such as-
    • The campaign to take healthy food may reduce the number of customers as many items will be fatty (Mintel, 2010);
    • The competition is really high in Cambridge;
    • Enormous rental cost and limited space for serving.
SWOT analysis of Hamburger restaurant.
Figure 1: SWOT analysis of Hamburger restaurant.
  • Opportunities: This restaurant has some positive factors, for example –
    • Hamburger restaurant will offer online order system and home delivery facilities within very short time, which will help to expand business rapidly;
    • It will target wide range of customers to make profits;
    • This business will help Bob and Lloyd to survive in recessionary period;
    • It has opportunity to expand its business in other cities of UK.
  • Threats: Hamburger restaurant has to face several challenges, such as –
    • Pressure of global financial crisis;
    • It is a risk to reach the break even point within first year and;
    • Issues of macro- economic pressure,

PEST Analysis or External Environmental Factors

This business plan is going to consider the market position by analysing political, social, financial, and technological factors –

Political factors

  • The political condition is stable enough to operate a restaurant in Cambridge;
  • Taxation policy, development of other rules and regulations have both positive and negative impact on the business;
  • Frequent terrorist attacks reduce number of customers;
  • Availability of loan facilities from banks

Economic Factors

  • According to the report of Mintel (2010), the food industries are the source of over 17.2% non-well GDP;
  • The effect of financial crisis on food market (Fries, 2010)

Socio cultural factors

  • Many students come in Cambridge for education, which will enhance its operation;
  • Hamburger restaurant will ensure equal opportunities for all employees to motivate them;
  • People of Cambridge like drinks and the tradition of drinking coffee arises in the country due to the presence of a huge number of emigrants from different cultures.

Technological factors

  • The Hamburger Restaurant will use advance machineries for production;
  • Moreover, Bob and Lloyd will contact with customers regularly as they want loyal customers, so, they will use latest software to develop marketing and advertising sectors;
  • In addition, technology will play vital role for reduction carbon emission.

SPICC analysis

  • Suppliers: Suppliers have significant role for fast food company, so, Hamburger restaurant will contact with direct wholesaler in order to offer lowest price of the food products;
  • Publics: 
    • The stakeholders of Hamburger Restaurant, local communities of Cambridge, its target group, media and social pressure groups would be considered as its public;
    • All they have enough potentialities to influence the success of Hamburger Restaurant
  • Intermediaries
    • The intermediaries of Hamburger Restaurant would indicates its distributors and dealers
    • The distribution network of Hamburger Restaurant would get major structural changes than the previous
    • Due to their previous business in this industry, Bob and Lloyd have the high efficiency levels to achieve growth potentials
    • Hamburger Restaurant would emphasis on web based automated order and distribution channels. Customers and Markets: Bob and Lloyd intended to target wide range of customers and they will try to expand its business outside of Cambridge;
  • Customers and Markets: Bob and Lloyd intended to target wide range of customers and they will try to expand its business outside of Cambridge;
  • Competition: Hamburger restaurant has both local and global competitors, for example, Izzy’s, Allston Food & Spirits, Dimio, Toscanini’s are the local competitors, and multinational companies like Starburk, McDonalds, KFC, Domino’s Pizza are also major competitors.

Identification of total market size

The Hamburger restaurant will initially start its business with ₤260,000 in cash and it will try to find out a large place in shopping mall or any suitable place (near to university) but the rent of the place will be around ₤30000.

  • Placing the food zone for serving and entertaining customers, the restaurant will also have a kitchen room inside the restaurant where the skilled, dynamic, experienced and trained chefs will prepare different snacks as well as regular food items with fresh organic vegetables and meat (Mintel, 2009);
  • Being facilitated with all of the amenities of a commercial zone, for example- adequate parking facility, opportunity of expanding the branch at the same or top floor of the restaurant and adequate sewerage, plumbing and electricity facility, air conditioning, elevators and lifts that the Hamburger restaurant will use a number of competent and proficient workers for maintenance.

Market segmentation

According to Hitt, Ireland & Hoskisson (2001) market segmentation is the procedure by separating a market into distinct groups of target customers with taking into account different requirements, characters, or manners, as a result, the management team of Hamburger Restaurant has investigated the buyer behaviour and identified four groups –

  • Cautious group: consistent with survey report, more than 17% of total customers are conscious about health problems, consequently, this group of people examines the food values, environment of the manufacture sector, and quality of the foods etc. Furthermore, these customers are ready to expend more money to get better products;
  • Sensible group: This group of customers are working hard and they are like to purchase considering their own demand instead of luxury because of the impact of financial down turns;
  • Brand oriented: 22% of the total customers are member of brand oriented group and they never bother about price of the products as brand is the first concern to them;
  • Apathetic: according to the survey report, the buying behaviour of this group is unpredictable and they are too complicated so they need long time to take decision. This group consists with 44% of total customers
Target Customer of The Hamburger Restaurant considering customer behaviour.
Figure 2: Target Customer of The Hamburger Restaurant considering customer behaviour.

Hamburger Restaurant will take different initiatives to attract different groups and it decides to target apathetic group and cautious group because they like quality products rather than branded products.

Target market

  • Students and tourists are the main target group of Hamburger Restaurant;
  • Hamburger Restaurant will target children, mid- aged workers, expatriates and most optimistically young generation;
  • Bob and Lloyd will target customers considering the survey report of marketing department of the company and according to repost 51% people like burger, 14% people think burger is only a treat, 20% people purchase burger for children, rest of the people are health conscious.

SMART business objectives

  • To achieve net income of at least ₤50000 during the third year of operation;
  • To maintain the highest standards of quality
  • To make Hamburger Restaurant a destination spot for students;
  • To expand into numerous outlets by year four, and sell the franchise to nearest cities, for example, London, Cardiff, Bristol and Manchester.
  • Contribute positively to the communities and environment.
  • Build up strong relationship with customers;

Tactical Plan

Under the reality of global financial downturn, the strategic objective Bob & Lloyd’s new venture is to develop a profitable business of fast food items with the group of Students and tourists. This Tactical Plan suggest to communicate with the target audience and let them understand the new brand and expectations of the proposed marketing approaches that would restructure the thinking of target group and lead them to attract to the brand to gaining the objectives as-

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  • To assemble and boost awareness among mass people about the significance of the Brand,
  • To pull together and enhance consciousness of the students and tourists regarding the quality and price of the brand under economic downturn
  • To educate and encourage the target group for positive perception to the brand,

Promotion Plan

The Hamburger Restaurant mainly uses two different sales promotion strategies to raise its customers it is necessary to mention that the new business would be placed at Cambridge where the students and tourists are the main target and the aims of promotional tool is to increase donations over the existing. As a result, it will offer some amenities for them, for example, announce awards and other services, like, it will publish the name of regular customers in their website of marketer.

Website

The website of the Hamburger Restaurant is the main source of information for the target audience as well as for other visitors. Therefore, the marketer will recruit some researcher to collect data of present situation and write their opinion regarding this issue in the company’s website. Meanwhile, it will develop a new dynamic website for online order, which would contain more information and user friendly to attract more people and it will offer special gifts for regular visitors. The other promotional campaign includes one to one marketing, TV Ad, and relationship marketing (Butler, 2010).

Building brands

Keller (2009) mentioned that there are four major steps in building strong brand, help to accomplish objectives of an organisation to target group and these are brand identification, meaning, responses, and relationship. In order to building strong brand image, Hamburger Restaurant will take some forwarding steps as –

  • Hamburger Restaurant will develop its brand by using existing brand awareness, knowledge, and image to target group by focusing on brand name, logo, symbols, design, package, and functional performances;
  • It will take the help of mass- media advertising, sales promotions, sponsorship, websites and direct mail or one to one marketing;
  • It will focus on its competitive advantages in order to develop brand identity and equity in Cambridge;
  • It will develop its brand as concerned with telling people how to Hamburger Restaurant.

People

In every organisation, people are the most important factors than any other issues of production like capital, land etc. Human resource is very crucial in service industry and in case of Bob and Lloyd’s hamburger fast food business, people is the key for the success for generating premium service to the customers. Therefore, in this section would emphasis on the people requirements of the restaurant service including the level of compensation. A brief detail of the staffing plans with the level of pay is given for fast food business of Bob and Lloyd in the following sections.

Job Classification No of Employees Compensation Working Hours
Shop Manager 1 £20000 12
Customer Service 12 £4000 12 (2 shift)
Kitchen Cook 4 £12000 12
Marketing 5 £15000 8
Finance & Accounting 3 £15000 8
Total 25

The new fast food business of Bob and Lloyd requires at least 25 employees to running the business in Cambridge that is one of the busy areas of UK. In a fast food business, the quality of service as well as the quality of the food is very important issue.

  • Shop Manager: Initially, the fast food shop requires a manager for collecting the payment from the customers and manages the overall operation within the shop floor. The main job responsibilities for this position is checking the attendance of the staffs of the shop in the morning, supervising the performance of the employees of the shop, collecting the cash from the customers and finally report to the directors of the shop. It requires working for at least 12 working hours including the launch breaks for lunch. The salary for this position is consolidated £20,000 that will increases in the subsequent years.
  • Customer Service: Customer service staffs are the most important part of the total work force as they directly deal with the customers and the satisfaction of the customers greatly depends upon the performance of these staffs. The main job responsibilities for this position are serving the customers according to the order given and maximising the level of satisfaction regarding the services. There are 12 staffs required for the positions, the staffs will work based on shift, and each shift consists of six hours. Six staffs will work on each shift of six hours and after completion of first shift, others six substitute the six staffs. The salaries of the each staff are consolidated £4000 for one shift in a month.
  • Kitchen chef: Kitchen chefs are required for the preparation of the food items that will serve to the customers. The main responsibilities for this position are preparing quality food with maximum taste that easily attracts the new customers for further order in future. In this position, four staffs will require and need to perform the duty for twelve hours. This working hour starts from the shop opening to close and attractive compensation package should offer to hold the competent persons for the position. The company will pay consolidated £12,000 salary for each cooking staff per month.
  • Marketing: The job responsibilities for the marketing position are to promote the first food shop to the target customers in Cambridge. Initially, five staffs will recruit for this position and the consolidated salary for this position will £15000 per month. These staffs will require to working for at least eight working hours in the market and will promote the shop to the different target customers segments (Hodgetts, Luthans, & Doh, 2006).
  • Finance & Accounting: The main job responsibilities of financial and accounting positions are maintaining the cost and revenue comes from different account and generated financial statement after a specific period of time. These staffs are also responsible for performing the duties calculate and preserve the various issues related to the finance of the shops like the income tax, loan repayment etc.

Leadership approach required for Hamburger restaurant

In any organisation, leadership qualities are essential for those who are in supervisor positions and perform the responsibilities to lead a team of employees. In the fast food restaurants of Bob and Lloyd, the employees will require to develop some leadership qualities on themselves to be successful in the business. There are some well-developed theories of leadership, which are relevant to the leadership style required for the success of the fast food restaurant of Bob and Lloyd.

Trait Approach

Trait approach refers to the inherent quality that a leader possesses by born and the duty of the management is to find out those leaders to recruit them into the organisation. The traits are adaptability to the situation, assisting other to achieve the goal, decisive, energetic and so on. When recruiting the employees for the Fast food Restaurant, Bob and Lloyd can search these traits within the incumbent and select those who have the maximum number of traits to be a leader.

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Managerial Grid

According to the managerial grid approach, developed by Robert Blake and Jane Mouton concentrates on the two issues like the concern for production that is the task orientation and for concern for people, which is the people orientation. In managerial grid approach, there are five types of leadership practiced by different manager in different organisational arrangement. The most efficient manager tries to maximize the trade-off between the production concern and people concern. Within the gird, team-management leadership styles maximize the benefit of both production concern and people concern (Bolden, Gosling, Marturano & Dennison, 2003).

For the Hamburger fast food restaurant of Bob and Lloyd, this team management approach will be applicable as the team members must work together for achieving the success and the leader should always stress on team performance rather than the individual one.

Transactional leadership

The jobs of the restaurant are highly standardize and required regular performance of the employees on the same task with great efficiency. The features of transactional leaders are working on more structured environment and subordinates follows the rules and regulations set by the leaders and achievement of the objectives result in a reward for the employees (Weihrich & Koontz, 2006). This type of leadership is very much relevant to the fast food restaurant of Hamburger fast food restaurant of Bob and Lloyd.

Transactional leadership

Leadership Continuum

Tannenbaum & Schmidt developed Leadership Continuum theory, which identifies four styles of leadership including autocratic, persuasive, consultative, and democratic (Dessler, 2008). In case of Hamburger fast food restaurant of Bob and Lloyd, the leaders should follow the democratic style of leadership that is the decision should make on the consensus of the maximum members.

Motivation required for the staff of Hamburger restaurant

Motivation is very much important for the better performance of the employee in every organisation including the industry and service. In course of time, various writers developed various types of motivational theories for employee motivation such as hierarchy of need theory, two factors theory etc.

  • Hierarchy of need theory: Hierarchy of need theory was developed by Abraham Maslow, lists the needs of human chronologically according to the importance (Martin et al, 2006). He developed a pyramid of need where basic needs are in the bottom and self-actualization need in the top and fulfilment of one need give raise the fulfilment of another need. The first three levels are expected by most of the people but the last two levels are for those works on high level. In this case, of Hamburger fast food restaurant of Bob and Lloyd, the management must fulfil the first three levels of needs of the employees including the physiological needs, safety needs and love needs from others. This is because without fulfilling these needs the employees cannot perform to the expected level and feel insecurity in the job.
  • Herzberg two factors theory: According to this theory developed by Fredrick Herzberg, there are two factors related to employee motivation that is Hygiene factors and Motivating factors. The Hygiene factors are those in absence of which employees are dissatisfied and presence of which employees are not motivated such as working condition, salary etc. On the other hand, motivation factors are those, absence of which employees are not dissatisfied and presence of which motivated the employees such as recognition, advancement etc. Hamburger fast food restaurant of Bob and Lloyd management must ensure the hygiene factors first to satisfy staff and than give some motivators that motivate the employees for increasing their performance.
  • Y theory: It is a theory oppose to theory X where people thinks as basically bed, developed by Douglas McGregor and it is the most popular motivation theory for the modern business organisation (Horner, 2010). Theory Y implied that people are basically good and in positive environment, the employee can perform better than negative environment. Hamburger fast food restaurant can motivate employee through providing them better environment with the required support for better performance.

Team approach required for Hamburger restaurant

  • Cross-functional team: In recruiting the staffs for Hamburger fast food restaurant, Bob and Lloyd should concentrate on selecting those candidates who have different qualities on different side of the business. With these diverse individuals, the management can form a cross-functional team so that the team members can perform duty of other functions not related to his or her (French & Bell, 1999).
  • Effective Team: Effective team is a team where the atmosphere is so relaxed, the member clearly understands the tasks and decision taken based on discussion of the members. The main features of this kind of team are it has a clear vision, informal environment, open communication, and functional conflicts etc. (DeCenzo & Robbins, 2005). In case of Hamburger fast food restaurant, Bob Lloyd should focus on forming a team of high effectiveness, which allows the team to perform successfully.

Financial Plans

Cash Flow Statement for Hamburger Fast Food Restaurant (First Six Month).

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Cash Flow Forecast – 12 Months
Month: Pre-Start 1 2 3 4 5 6
Cash sales 500,000 550,000 600,000 660,000 670,000 700,000
New equity inflow 160,000
Loans received 120,000
Total Receipts 280,000 500,000 550,000 600,000 660,000 670,000 700,000
Payments
Cash purchases 220,000 230,000 250,000 280,000 270,000 290,000
Payments to creditors
Salaries and wages 236,000 236,000 236,000 236,000 236,000 236,000
Rent 30,000 30,000 30,000 30,000 30,000 30,000
Utilities 4,000 4,000 4,000 4,000 4,000 4,000
Telephone 1,000 1,000 1,000 1,000 1,000 1,000
Advertising 20,000 18,000 20,000 25,000 16,000 20,000
Marketing/promotion 30,000 22,000 15,000 20,000 14,000 15,000
Bank charges 1,000 1,000 1,000 1,000 1,000 1,000
Miscellaneous 1,500 1,200 1,600 1,700 1,800 2,000
Loan repayments 1,667 1,667 1,667 1,667 1,667 1,667
Tax payments 1,333 1,333 1,333 1,333 1,333 1,333
Capital purchases 150,000
Other 20,000
Total Payments 170,000 546,500 546,200 561,600 601,700 576,800 602,000
Cash flow Surplus/Deficit (-) 110,000 (46,500) 3,800 38,400 58,300 93,200 98,000
Opening Cash Balance 0 110,000 63,500 67,300 105,700 164,000 257,200
Closing Cash Balance 110,000 63,500 67,300 105,700 164,000 257,200 355,200

Cash Flow Statement for Hamburger Fast Food Restaurant (July to December).

Cash Flow Forecast – 12 Months 7 8 9 10 11 12 Totals
Month: 650,000 720,000 750,000 730,000 700,000 800,000 8,030,000.00
160,000
Cash sales 120,000
New equity inflow 650,000 720,000 750,000 730,000 700,000 800,000 8,310,000.00
Loans received
Total Receipts
240,000 290,000 310,000 320,000 300,000 360,000 3,360,000.00
Payments 0.00
Cash purchases 236,000 236,000 236,000 236,000 236,000 236,000 2,832,000
Payments to creditors 30,000 30,000 30,000 30,000 30,000 30,000 360,000
Salaries and wages 4,000 4,000 4,000 4,000 4,000 4,000 48,000
Rent 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Utilities 22,000 20,000 18,000 25,000 20,000 25,000 249,000
Telephone 13,000 12,000 17,000 20,000 15,000 20,000 213,000
Advertising 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Marketing/promotion 1,500 1,900 2,000 1,200 1,600 2,200 20,200
Bank charges 1,667 1,667 1,667 1,667 1,667 1,667 20,004
Miscellaneous 1,333 1,333 1,333 1,333 1,333 1,333 15,996
Loan repayments 150,000
Tax payments 20,000
Capital purchases 551,500 598,900 622,000 641,200 611,600 682,200 7,312,200.00
Other
Total Payments 98,500 121,100 128,000 88,800 88,400 117,800 997,800.00
Cash flow Surplus/Deficit (-) 355,200 453,700 574,800 702,800 791,600 880,000
Opening Cash Balance 453,700 574,800 702,800 791,600 880,000 997,800
Closing Cash Balance

One-Year Income Statement for Hamburger Fast Food Restaurant.

Income Statement
Hamburger Fast Food Restaurant
2011
(all numbers in £ 000)
REVENUE
Gross Revenue £8,030.00
Net Revenue £8,030.00
COST OF Service Provide
Total Cost of Food Supplied £3,360.00
Gross Profit (Loss) £4,670.00
OPERATING EXPENSES
Selling
Salaries and wages £900.00
Advertising & Promotion £462.00
Other £0.00
Total Selling Expenses £1,362.00
General/Administrative
Salaries and wages £1,932.00
Rent £360.00
Utilities £48.00
Telephone £12.00
Loan repayment £1.60
Interest £12.00
Miscellaneous £20.20
Total General/Administrative Expenses £2,385.80
Total Operating Expenses £3,747.80
Net Income Before Taxes £922.00
Taxes on income £16.00
Net Income After Taxes £906.00
NET INCOME (LOSS) £906.00

Balance Sheet for Hamburger Fast Food Restaurant.

Balance Sheet
Hamburger Fast Food Restaurant
For the year ended 2011
ASSETS
Current Assets
Cash £997800
Bank Account 0
Account Receivable 0
Total Current Assets £997800
Fixed Assets
Starting Asset 0
Other Fixed Asset £170000
Goodwill 0
Total Net Fixed Assets £170000
TOTAL ASSETS £1167800
LIABILITIES
Current Liabilities
Accounts payable 0
Interest 0
Profit/Loss £906000
Accruals & other payables £1800
Total Current Liabilities £907800
Long-term Liabilities
Capital (owner + bank) £260000
Other long-term liabilities
Total Long-term Liabilities £260000
TOTAL LIABILITIES £1167800

Key Financial Assumption

The financial projection of new fast food restaurant of Bob and Lloyd are given above and there are some basic assumptions about the key figures of the financial plan. One portion of the capital required for the business supplied by the Bob and Lloyd and the remaining parts acquired from the bank. The total starting capital for the Hamburger Fast Food Restaurant is £280000 within which £160000 supplies by the Bob and Lloyd and another £120000 receives from the bank. The owner’s capital consists of the legacy amount of £100000 from Bob and Lloyd’s aunt and £60000 from the profit of their manufacturing business. On the other hand, the loan taken from the bank by six equal instalments in next six years and the rate of interest for the loan is 10% per year.

Cash flow Statement

The Cash flow statement for the next twelve months presented where in the initial point the capital formation and expenditure on the purchasing fixed assets, as furniture, interior design etc are included. The company starts with the initial cash of £280000 from the owner and bank. It expends £170000 for purchasing the capital goods and the remaining amount kept for the bearing the operating cost. In the first month the revenue from giving food service to the customers are £500000 in which £220000 will spend on purchasing food ingredients for preparing the food. Other expenses regarding the operation of shop includes the salaries of the staff, utilities expenses, telephone bill, interest on the loan, loan repayment, advertisement expenses etc (NACVA, 2005).

Most of the costs for the first twelve months are more or less stable except the revenue, purchase, and advertisement cost because in course of time the revenue from the food service will increase and raise the cost of raw food item purchase and advertisement. At the end of the first year, the net cash inflow from the business is £997800 that indicates the future growth of the business.

Income Statement

The projected income statement shows the net income from the hamburger fast food restaurant at the end of the first year. The statement shows that after the first year the net income from the shop is £906000. The total revenue comes from serving the customers fast food is £8030000 in which the cost for purchasing the raw foods for the preparation of the fast food is £3360000 that is main sources of expenditure for the restaurant. After deducting the purchase of raw food cost from the revenue, the gross revenue generates and other operating costs like salaries, advertisement, utilities, bank charges etc. have deducted from the net revenue to generate the gross profit (Ross, Westerfield, & Jordan, 2006). Finally, the net profit comes just after deducting the taxes of £16000 from the gross profit.

Balance Sheet

The balance sheet have generated at the end of the first year to assess the condition of assets and liabilities of Hamburger Fast Food Restaurant of Bob and Lloyd. In the balance sheet, total asset of the restaurant is £1167800 within which the cash and bank balance is £997800 and fixed asset is £170000. The total liabilities of the restaurant is £1167800 in which the profit of is £906000 and the capital consists of owner and bank is £260000. For the first year, there is no transaction beyond the cash so that there is no receivable and payable for the restaurant except a small amount of accrual.

Conceptual Framework

There are mainly three major types of financial analysis used to analysis the financial data of the business organisation.this analysis includes the Horizontal analysis, Vertical Analysis and Ratio analysis. In the current financial analysis of Hamburger Fast Food Restaurant, the horizontal approach for analysis purpose. In Horizontal approach, the data is calculated over a period of time but in current case, here only one business period calculates.

Direct Method

In the cash flow statement of Hamburger Fast Food Restaurant the direct method is using for relating the other information involved in cash. In indirect method, all cash and non-cash items are adjusted against the net income and many business organisations prefer it as because it makes comparison between net income and net cash inflow (Larson, Wild, & Chiappette, 2002). Though generating the same results, this method does not reflect the actual objectives of cash flow statements. In contrary, direct method, all the items of cash inflow are added then subtract all cash outflow items from the total cash inflow. As a result, the net cash flow can obtain for further use and for this reason, here using the direct method of cash flow statements (Damodaran, 2009).

Pro-forma Income

In the income statement of Hamburger Fast Food Restaurant the pro-forma approach uses for income analysis. Generally, company has to follow the Generally Accepted Accounting Principle (GAAP) in preparing financial statements for the company that includes some unnecessary items. According the pro-forma income statement, only those items used that is relevant to the company and omits the unnecessary items from the financial statements (Eversull & Rotan, 1997). Now a day, most big business organisation used this approach for generating their financial statements. The main benefit of this approach is that through it the concentration is given to the relevant items, which helps to identify the accurate results like the net income or loss easily.

There are some basic principles used for calculating the financial statements that supported by the GAAP of USA.

  • Principles of regularity: In the following statements the principles of regularity has maintained in preparing the statements. The principle of regularity refers to the conformation to the rules and regulation given the accounting association.
  • Principle of consistency: In all the financial statements of Hamburger Fast Food Restaurant, the principles of consistency have maintained and the principle of consistency means consistency in all the financial statements. In preparing the income statements, cash flows and balance sheet a fair level of consistency have maintained.
  • Principle of sincerity: In preparing the financial statement an accepted level of sincerity have maintained, It does not generate any information with any falsification rather highly depends on the current condition of market and no excess or under estimate have made.
  • Principle of Continuity: The financial statements have been generating in a way so that it can serve a way further continuation. The principle of continuity mainly refers to the accounting principle that assumes that business is a going concern and no interruption will make to hinder the continuity of the business (Weygandt, Kieso & Kimmel, 2007). In the cash flow statements of Hamburger Fast Food Restaurant, the cash balance of one month brought forward to the other months so that it can make a continuation.

The role of HR in organisation

Jackson & Schuler (2009) mentioned that the human resource is an important asset of an organisation without proper direction and management of this resource overall objectives of an organisation is hard to achieve. The main function of HR is to properly guide and manage the people or employees of an organisation. To do so, the HR manager needs to perform some specific functions that are different from the other functions of the organisation. These functions are as follows:

  • HR plans: Pearce & Robinson (2006) added that HR plan refers to the plan for future human resource needs of an organisation including identifying the potential foundation of this resource, assessing the expertise required for this position and finally, how to the marketer would best use the current human resources. Here one thing must keep in mind that the HR plans should conform to the broad organisational plans.
  • Recruitment and Selection: The important aspect of HR is the recruitment and selection of employees for the available position of the organisation. In case of fast food restaurant of Bob and Lloyd, they need to fulfil the position required for performing the operation through recruitment and selection. Primarily they required to fulfil the positions of customer services, marketing, services etc.
  • Training and Development: To make a workforce as a source of competitive advantage for the organisation there is no alternative to train the employees properly. In the first food restaurant, the employees should well train to serve best the purpose of the organisation that is serving the customers well.
  • Compensation & Appraisal: Kotler & Keller (2006) pointed out that the compensation package should design in a way so that the employees do not feel deprived and it directly affects the morale of the employee. On the other hand, appraisal refers to the evaluation of the employee performance against the setting standard and if there is any deviation than, corrective action should be taken. Another objective of appraisal is to identify the star performer to awarding them. In fast food restaurant, Bob and Lloyd should offer competitive compensation package and award those performing above standard.
  • The role of Finance: Money is the lifeblood of any business organisation and the management of this financial matter lies upon the finance department of the organisation. The main duty of finance department of Hamburger Fast Food Restaurant is maintain the financial matters of the business and properly budget the cost required by other departments for business development. The others functions of the finance departments are as follows:
  • Supply Capital: The main duty of the finance department is to supply necessary capital for the business organisation. In case of ltd company, the capital can form through stock capital but in sole proprietorship or partnership, most of the time the capital is supplied by the owner or browed from the bank or both. In fast food restaurant, Bob and Lloyd supplied the one part of the capital and rest of the part supplied by the bank through the loan.
  • Budgeting: Straub & Attner (2004) added that the budgeting is an important function of finance which actually known as the financial plan for the company. At the end of every year, finance department sets the budget for the next year through assessing the financial resource requirement and its potential sources. In Bob and Lloyd’s fast food restaurant, the finance department primarily plans for allocating the acquired resources in various departments and then plans for future financial requirements and its potential sources.
  • Resource Allocation: Resource allocation refers to allocate the available resources among the various functional departments according to needs and importance. Resources are always scarce then the demand and that is why the proper allocation of these scarce resources is always a tough job for the organisation. Finance department done this through proper planning and implementation. In fast food restaurant, finance department plans and allocates the acquired capital to the various functional departments according to the importance.

Role of Marketing

Kotler and Armstrong (2006) argued that in service industry, marketing is the key for success in business and in current time, marketing is the most important function for any organisation irrespective of production or service. Marketing refers to the groups of activities that initiated to trace the need of the customers and take immediate actions to fulfil these demand at a profit. Here the main objective is to give the massage of the company to the right customers and marketing is actually a method of communication to customers regarding the product and service of the company (Straub & Attner 2004). There are some role and functions of the marketing department, which is different from the other functional departments.

  • Market Segmentation: Market segmentation is dividing the market according to some variables like the geographic, age, product etc. It is a method of segmenting the market for giving the attention on specific customers while ignoring the others. The Hamburger restaurant can concentrate on the customers of middle age for their food so that all the marketing efforts can address on this segment properly.
  • Pricing: Pricing refers to the setting of the price of product or service of the business and its importance because it affects directly the choice of the buyer. To be competitive in the market the price of product or service should be competitive that is not more then the price of the competitor. In Hamburger restaurant, the price of the food should set in a way that is not more than the competitor’s price.
  • Promotion: Sharma and Singh (2006) explained that the promotion is the program undertaken to promote the product or service of the organisation through direct contract, advertisement etc. It is a way to promote the product or services to the customers so that they can aware about it. The fast food restaurant can promote its food to the customer thorough physical contract or offering discount on various food items etc.
  • Advertisement: Advertisement is a way of communication with the customers and the difference between the promotion and advertisement is that where the promotion addressed directly to the specific set of customers, advertisement addressed to the customers in general (Sharma & Singh 2006). There are a number of means for advertisements such as digital media, print media, billboard etc. Initially, the fast food restaurant can use the billboard advertisement for attracting the customers.

Interdependency among HR, Finance, and Marketing

Kerr (1985) stated that, in every organisation there are various functional departments like HR, marketing, finance, production etc. that are performing their functions separately headed by different functional managers. The plans and actions of these functional departments are also distinct in nature. Nevertheless, all these departments set and run for achieving the broader organisational objectives like making profit.

Initially, broad organisational plans have developed and then within this framework of organisational plan functional plans have developed. Again, though the functions of the various departments are substantially different from one another, an expected level of coordination required among the functional departments for achieving the broader goal of the organisation. When the coordination among the various departments is poor then the whole organisation will suffer. Here the interdependency among the various functional departments is as follows.

HR departments closely linked with the marketing and finance departments in way that isolation from those will result in poor performance of this department. Suppose for training the employees of marketing, the expert from marketing department need to bring to the HR departments. Again, for appraisal of the performance of the marketing employees, HR requires the report of the marketing manager of the organisation and for HR planning, marketing must inform the employee and training requirement of the department. On the other hand, HR also depends on the finance in a way that for resource requirements it follows the finance departments.

Finance required the employee information regarding the bonus, promotion, salaries etc. so that they can assess the cash requirements for employee salaries. Marketing depends on finance for their budget and resources for smooth operation.

Interdependency of HR, Marketing, and Finance is Hamburger Restaurant

In Hamburger Fast Food Restaurant, there are HR, marketing and finance departments those have its won functions. Nevertheless, these three departments are closely linked with each other. Kotler and Armstrong (2006) argued that the main duty of the HR is to recruit selects and trains employees for marketing and finance department of Hamburger Fast Food Restaurant. To make this efforts finance and marketing departments must inform the HR departments about their employee requirements and the skill needed to perform the job.

HR department can hire required personnel from the labour market and trains them in way that best serve the demands of the finance and marketing. Again, for performance appraisal of the employees of marketing and finance of Hamburger Fast Food Restaurant, the HR manager requires the rating of the marketing and finance manager about their employee performance. Based on given information, HR designs the compensation and appraisal program for the employees. The HR manager of Hamburger Fast Food Restaurant also depends on the finance manager of the same organisation for compensating employees as well for the expenses of the HR departments.

On the other hand, the finance department of Hamburger Fast Food Restaurant also depends on the marketing department for preparing the budget of the organisation. The money required by the marketing departments for promotional program and advertisement supplied by the finance departments. If marketing department cannot promote the shop to the customers then the revenue will suffer so that the finance department does not have the cash for allocation. Again, the marketing manager cannot plan a marketing campaign, which will not support by the finance department as the required cash for the campaign need to acquire from the finance department.

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