Case study BY:

ACHYUTANAND
The Sonu’s restaurant.. M.B.A.
I.B.
ROLL NO. 02

There is a restaurant,'' The Sonu's" in the one of the most

buzzing places in Varanasi, at Sigra. It is one of most beloved
vegetarian restaurant by youngsters because of its location and
providing. It is surrounded by the garden and accessibility to
the place is really good. It is connected with almost all part of
the city with direct public transport, and its proximity to one of
the university is also notable feature in the success of this
classic restaurant. Mr. Ajay Singh the owner of the restaurant is
notable personality in many ways, a celebrated sports person,
a noted social activist and loved poet of the city. He started this
restaurant, after his retirement at the age of forty from the
active political life, in August 2000, with the purpose, apart
from obvious profit motives, to satisfy his obsession of cooking.
And he was very well satisfying the needs and wants of the
people and that of him as well by providing them the best
possible value for money.
In a very short span of time, Mr. Ajay has made the Sonu's
a well-known hang out and din-out
place for youngsters and for families by providing a variety of
foods along with a proper treatment and comfort. The work
force of Sonu's restaurant is consist of twelve permanent staffs
and three sub-staffs along with Mr. Ajay the head chef and two
helping chefs, there are five waiters, one cashier, one at ice-
cream parlor, two table cleaning staffs, and a gate man for
parking assistance. Three sub staffs are generally used for floor
and toilet cleaning for time to time they are also used logistics
and transportation of goods. The specialty of Sonu's is strong
dedication of Mr. Ajay to handpick all the vegetables and other
items for the restaurant.
Anjali daughter of Mr. Ajay was very talented and utilized
her god given talent in designing the interiors of the restaurant.
It is among the very few restaurant where you can see the
kitchen and the process of food making. Actually this was the
most important idea provided by Anjali to make the kitchen
partition transparent as an effort to win the customer's faith in
the quality preparation of the food. The customers are given
choice to choose the mode of the food preparing, like how
much oil they like, in which oil they want it to prepared,
whether they want to have less/more spicy food etc. apart
Case study BY:

ACHYUTANAND
The Sonu’s restaurant.. M.B.A.
I.B.
ROLL NO. 02
from these features Sonu's also keep a record for the
preferences of their regular customers. Recently Sonu's had
started the home delivery and tele booking.
Over the period of time, the Sonu's also induces sever
competition in the local area, it seems like the area is flooded
with restaurants suddenly. With most of the restaurants are
either replicating the products or providing the fresher cuisines
at very competitive rates, the recent sales graph of Sonu's has
gone down and so the profit margins for the restaurant. The
youngster of later generations doesn't fancy vegetarian food
that much. And not to mention about the road side fast food
restaurants, they are also attracting customers in big way.
These fast food vendors are providing food at almost two- third
price of that of Sonu's and they generally taste good, but the
quality is not exactly what it should be. Since most of the
people belong to low income group, and that’s make the pricing
factor one of the most important issue. Over the period of time
Mr. Ajay had saw many ups and downs but right now he is
worried about the shifting of the customers.
But the greatest worry for Mr. Ajay is recent continual
inflammatory trend in the market.

The table of common commodity

prices
Commodit Price in Price in %
ies 2005 2010 INCREAS
In rupees per kg. In rupees per kg.
(including E
carriage)

Potatoes 5 12 140%
Tomatoes 12 45 275
Onions 10 25 150
Flour 7 15 114
Rice 18 25 25
Sugar 17 35 105
Milk 14 25 107
Refined oil 50 80 60
Case study BY:

ACHYUTANAND
The Sonu’s restaurant.. M.B.A.
I.B.
ROLL NO. 02
Spices 500 1500 200
Desi ghee 150 250 67
L.P.G. 290 400 38
With this inflammatory trend he is force to take some decisions.
He has to decide the course of action. As an management
student Anjali decided to take a closure look into the situation,
she decided to take an economic look at the issue.
Case study BY:

ACHYUTANAND
The Sonu’s restaurant.. M.B.A.
I.B.
ROLL NO. 02
Question:
What are the micro and macro economic issues related to the
case, enlist them.
Answer:
There can be many issues regarding this particular situation.
A) Microeconomic issues:
I) The changing preference of the people in general, since they
are finding road-side vendors more suitable and appropriate.
II) Number of employees, depending on situation the number of
employees might be unnecessarily high.
III) Salaries given to employees, it can be reduced for some
period of time, but this might be demoralizing also.
IV) The competition provided by the competitors.

B) Macroeconomic issues:
Inflation: Inflation is protracted period of rising prices. As
inflation rises, the purchasing power of rupees goes down; the
inflation rate is rate of change in a given price index over a
specified period of time. An annual inflation rate can be
calculated as

Where, CPIT is consumer price index for the concerned period,

CPIT-1 is consumer price index for the previous period.