Case Presentation :Global Customer Value

Porcinis Pronto : Great Italian cuisine without the wait

Presented By:
Kristoffer, Subash, Georg & Mehadi

Index
Overview
Situation and Problem analysis
Prontos Value drivers analysis
Growth Alternatives and their Pros/Cons
Financial analysis
Recommendation

Overview
Company Name : Pochini Inc.,
- Family owned restaurants based in Boston
- 23 location and 954 employees
- Revenue generated : $94.53 million
Segment : Fastfood ,Full Service Chain Restaurant .
Success factor- High Quality food and service at each location
Performance : Despite rescission and saturated fast food market its profit
margin has increased .

Situation and Problem

Unlike Big chains ,Porcini neither have enough resources nor brand
power to pursue growth option in Overseas .
So, it decided to avenue domestically for the growth .
Problem Identification
Should Porcini expand their business to Porcini
Pronto ?How should they do it without damaging
their brand/image with the resources they have?
Will it be profitable ?

Will the Pronto Concept be a success?

The four different options

1 No expansion, keep a status quo.
2 Company own-and-operate approach:
-

Purchase real estate locations, borrow capital and operate each new location.

Slow growth.

3 Franchising:
-

A franchise is a business relationship in which an individual franchisee pays a fee to the franchisor and, in return,
has use of a trade name.

Risk and limitation of risk

4 Syndication:
-

Properties owned by investors and operated by Porcini.

Full control, but a lot of transactions costs.

Comparison of Alternatives
Comp
any
owned
-andoperat
e
Brandi
ng

Franc
hising

Syndi
cation

Pros:
Pros:
Same
- T
- O as
o
v compa
t
e ny
a
r owned
l
a -andc
ll operat
o
p e
n
r
tr
o
o
s
l
o
- E
f

Financial Analysis

NPV @ 2,5% GR

Company owned

$ 6 714 535

Assumptions:
Financing cost included in 94% margin
Pronto grow rate = Industry rate = 2,5%
Hurdle rate = 6%
All values pre-tax

Recommendation
Greatest prospects with
Company Own and Operate
Com
pany
Owne
d

Syndi
catio
n

Franc
hise

Gener
ating
Profit

Good

Avera
ge

Poor

Brand
Image

Good

Good

Averag
e

Custo
mer
Satisfa

Good

Avera
ge

Poor

We recommend Company
own-and-operate approach
because it will enhance the
pace
of
growth
and
profitability as well as create
customer value.

Risk Assessment
Risks

Mitigation

Failure of
the
Pontos
concept

Effective strategic
plan.

Damage
to
porcinis
reputatio
n

Maintain strict quality

control of food and
service.

Improper
Pontos

Traffic Study.

Complying with all the

necessary laws and
regulations.

Direct management
involvement.

Conclusion
Launch Porcini's Pronto concept.

Grow via company owned and operated approach.

Ensure the long run potential of Pronto concept.

THANK YOU!