Who Are We?
Phantom is a consultancy firm that could help Wakame in regards to management optimization and marketing changes. The role of a consultant is primarily focused on (but not limited to) collecting internal business intelligence, interviewing the team and customers, as well as creating a recommended course of action for Wakame. The initial tasks would include analyzing the local F&B industry, identifying Wakame’s resources and capabilities, as well as prioritizing the restaurant’s issues.
Mission, Vission, and Structure
Saleh Al Braik and his brother Alawi, Wakame’s co-founders, envision that the restaurant will grow into an international franchise and attract a global community. Expanding into new markets, however, can be extremely challenging. Wakame operates a small team of 38 employees, including Al Braik brothers, Tracey Meskin (marketing and operations facilitator), Blackwell Chadzamakono (general manager), Hanan Karin (brand manager), and Shane Silva (head chef). In fact, Wakame has a strict organizational hierarchy since Saleh and Alawi concentrate the majority of operational power in their hands. Therefore, the restaurant functions using a centralized model, where all the issues are resolved at the top.
SMART Goal
Specific: A global franchise taking over new markets and making more profit.
Measurable: Can be measured through its cost-efficiency by calculating the return on investment (ROI) of new diners’ operations.
Achievable: Numerous examples of successful franchising in the food and beverage (F&B) industry.
Realistic: The example of Panda Express and other Asian QSR show that expansion and franchising is realistic.
Time-Bound: Needs to be achieved in a 2 to 3 year timeline.
History of the Owner
- Saleh Albraik. Is a graduate student from the University Of Essex in 2009(UK). 2006-2009
- He is majored in Bachelor of Science in Accounting and Finance.
- He is an Entrepreneur.
- He began with few companies such as the PR company called Think Up(Founder&President).
- He is the Owner of Wakame Restaurant
- He is also DXB first Calisthenics and parkour gyms, gravity.(Co-owner)
- Al Braik Investment LLC(Managing Director)
- Head of Volunteer Mission( Dubai Cares) in 2010-2016
- Project Manager(DU) in 2013-2015
WAKAME Background
Wakame had their grand opening in year 2015. Their Marketing was mainly through social media to inform customers about their new updates, events, dishes, etc. It’s a fine dining restaurant that provides the most exclusive dishes and has the most skilled chefs. Wakame Lounge became known through their customer interaction through media about their satisfaction when visiting Sofitel hotel in Dubai. They offer cooking classes (a private cooking course in form of 2 pack or company pack during quiet time at the restaurant). They also offer catering. Wakame always tries to innovate by creating something special but limited to small menus.
Problem Statement
- Issue: No insights on international expansion
- Issue: No marketing strategy that would work for global markets
- Issue: Wakame Lounge’s profitability declines
- Issue: Popularization of quick-service restaurants
- Problem: How can Wakame expand internationally and market itself in new business environments?
Company’s Past Challenges
As for the issues the restaurant faced at the start-up phase, there were quite a few. First of all, Wakame had wrong cash flow projections, which affected budget, salary, and tax planning. There was no extensive financial and market analysis, which led to setbacks, misunderstandings, and eventual financial losses. However, the lack of an evidence-based financial report was a symptom of a larger problem. The main issue was that Wakame’s key stakeholders did not have enough data in order to make feasible projections and make decisions based on such insights. Therefore, the underlying problem was the lack of necessary data. Data collection has also been detrimental to the restaurant’s franchising. Kawai by Wakame serves as a fast-food alternative to the luxury menus at Wakame Lounge in downtown Dubai. The restaurant’s owners admitted that their main concern with Kawai’s expansion is the lack of information regarding the economic and cultural backgrounds of prospective markets. As a result, without much business intelligence, franchising Wakame Lounge has turned out to be not as profitable. Alawi and Saleh decided to postpone franchising Kawai due to a disappointing experience with Wakame Lounge. It is apparent that both major issues the restaurant faced in the past can be viewed as symptoms of a larger problem – insufficient data collection. Wakame has hired an operational facilitator and a financial advisor in order to battle the first issue, which has manifested into the restaurant’s success and adequate profits. However, the issues related to franchising remains unresolved.
Analyzing Wakame’s Business Environment: PESTEL
- Political: Fluctuating oil prices, strict government regulations, international markets are much more politically lenient
- Economic: High operating costs, new business models, the massive increase in competition
- Social: High average income (Dubai), popularization of QSR, the massive increase in tourists
- Technological: The most important role in promotion is now allocated to social media marketing (SMM)
- Environmental: The global pandemic leads to numerous concerns
- Legal: VAT taxes in Dubai, international markets present a set of new legal challenges
Porter’s Six Forces
In order to analyze the strategic position of Wakame on the market, Phantom Consultancy could introduce the Porter’s six forces model. The six forces model could be used as an effective tool to assess the prospects of Wakame individually as well as the attractiveness of the F&B market overall. The model includes new entrants, end users and buyers, competition, suppliers, substitutes, and complementary products.
Strategic Analysis: Porter’s approach to Industry Analysis
The threat of new entrants is high for Wakame Lounge and Kawai. Firstly, the restaurant is not well-established and does not have a brand built over multiple decades. Wakame is relatively new and, despite the strong social media presence, remains not very well-known locally. Secondly, there is an increasing amount of competitors in Dubai’s foodservice industry, according to multiple reports and expert projections (KPMG International, 2018). Both of these factors make it apparent that while the competition continues to grow, Wakame does not have enough brand recognition to remain relevant on the market. Consequentially, Wakame has a relatively high threat of new entrants. As for end users and buyers, Wakame manages to attract an emerging consumer segment of Asian tourists. However, with the decline of fine dining, the restaurant’s prices may not be the most acceptable, even among the upper-class guests. Therefore, the bargaining power of customers is moderate. When it comes to suppliers, their bargaining power is moderate as well since Wakame has numerous long-term suppliers that value the restaurant’s contribution. However, the increasing competition in the UAE foodservice industry makes it easier for suppliers to find new clients.
Due to the rise of lower-budget, takeaway competition within Dubai’s F&B industry, there is a high threat of new substitutes emerging for Wakame. As for complimentary products, Wakame manages to provide cooking classes and exclusive chef appearances in order to enrich the customer experience. However, there are still various opportunities for Wakame to expand the range of its services. Lastly, when it comes to competition, Wakame has a number of strong rivals in terms of Asian restaurants of a premium segment. Some of them include Zuma and Buddha Bar. However, the majority of them does not utilize social media at a large scale, which puts Wakame’s online campaigns at a significant advantage. Still, the amount of competition in Dubai has increased tremendously, which means that Wakame does not have a high competitive advantage.
Marketing Mix 4P’s Strategy for Kawai
Product
- Approachable brand that keeps Wakame lounge’s values regarding family, high quality, and simplicity
- Providing a range of services, but focusing on experimental Asian cuisine
- Simple and sleek design with ethnic motives in order to differentiate among other QSR
Promotion
- Social media as the main promotion device
- Using different content for different audiences
- Influencer marketing and TikTok as the main trends
Price
- Democratic prices, maybe a bit higher than average fast food due to the image of exclusivity
- Special offers to generate customer loyalty
Place
- Regional markets, including Saudi Arabia
- Franchising as the main channel of distribution
Competitive Environment
When it comes to competition, Wakame has a number of strong rivals in terms of Asian restaurants of a premium segment. Some of them include Zuma and Buddha Bar. However, the majority of them does not utilize social media at a large scale, which puts Wakame’s online campaigns at a significant advantage. Still, the amount of competition in Dubai has increased tremendously, which means that Wakame does not have a high competitive advantage.
SWOT Analysis
Internal Factors Analysis
Strength
The incorporation of cooking classes is a major strength since there is only a small amount of Dubai-based restaurant providing such services. Wakame’s executives have put a lot of effort in social media promotion and targeted online communication, which has manifested itself into a major strength. Such online initiatives do not only have immediate positive effects of attracting customers, but also establishing the brand of Wakame. Brand recognition impacts the profits and helps companies expand due to the consumers’ favoritism of well-known establishments.
One of the most crucial strengths of Wakame is the small size of its team. All the operational decisions go through Saleh and his brother, which affects the discipline among the team members.
Weaknesses
Centralized decision making can also be a major weakness, depending on the circumstances and the executives’ approach to management. For example, the fact that there are only two key leaders within Wakame limits the restaurant’s opportunity to make innovative decisions. Since all the operational competence lays with the Al Braik brothers, there is little to no room for significant change and experiments. As far as communication goes, employees at Wakame rarely voice their ideas and suggestions. Saleh and his brother need to look at the business’ current trajectory from a different perspective from time to time. They cannot be the only ones who contribute to the discussion and make all the decisions.
Opportunities
Even though increased competition presents a concern to local restaurants, new opportunities emerge in the UAE F&B sector. Firstly, Dubai residents have high disposable incomes, which is why they tend to favor premium-priced products and services (KPMG International, 2018). Secondly, rising tourist arrivals serve as an excellent opportunity for small-scale, family-run businesses to collect more profits and eventually expand (KPMG International, 2018). Riyadh can be a viable option for regional expansion due to relative familiarity with the culture and societal trends. Increasing urban lifestyles in the UAE present an opportunity for Dubai-based restaurants to expand locally and stabilize themselves in a familiar market.
Threats
On the other hand, shifting customer preferences, economic setbacks, and market diversification lead to numerous challenges restaurants and cafes have to face in order to remain profitable. High operational costs are the main challenge that businesses in the United Arab Emirates are facing nowadays due to increasing rental and labor prices. Despite the optimization efforts, the cost of running a foodservice company in the UAE has increased significantly over the course of a few years.
TOWS Matrix
Alternatives (Solutions)
There are multiple strategies for new market entry that are suitable for Wakame.
- Option 1: Franchising Globally
- Option 2: Franchising Regionally
- Option 3: Partnering Up
All the options relate to Kawai by Wakame since it has more potential for continuous expansion. The best option for the restaurant, based on the strategies’ advantages and disadvantages, is regional expansion.
Recommendations
Regional franchising implies rigorous promotion since consumers from new markets do not know about the brand. Social media marketing has proven to be effective for Wakame in the past. Moreover, SMM continues to provide the most opportunities for companies to enter new markets and attract targeted customers. Wakame’s social media strategy should focus on the restaurant’s values and mission. Marketers at Kawai need to target Asian tourists since they compose the biggest market for the diner. Lastly, Wakame could integrate a number of innovative strategies into online promotion. For instance, the restaurant could set up a TikTok account, which would include content from the restaurant’s employees and customers.