How to Conduct a SWOT Analysis for a Restaurant

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  • SWOT analysis can help identify opportunities and potential threats for a restaurant business.
  • It can help restaurateurs make informed decisions about menu planning, marketing, and operations.
  • SWOT analysis can also help assess the competitive landscape and develop strategies to gain a competitive advantage.

Conducting a restaurant SWOT analysis is essential for all restaurant owners. It doesn’t matter whether you are a minor player in the restaurant business, a larger company looking to gain an even larger market share, or perhaps holding on to what you have.

Companies should regularly conduct a SWOT analysis, especially if a business is planning on entering a new market.

But what is a SWOT analysis? How does a restaurant carry one out? Let’s explain.

What is a Restaurant SWOT Analysis?

We understand that there may be many of those in the restaurant industry who aren’t quite sure what a SWOT analysis is. This is fine. However, it is essential that you become familiar with the concept. This is because it will be a part of your restaurant business plan.

A SWOT analysis is not just limited to restaurants. It is something that all businesses need to do, although we are focusing purely on restaurants here. it is also a good idea to review a SWOT analysis of any company you invest in. Here is a SWOT Analysis of Tesla.

A SWOT analysis is an acronym for Strengths, weaknesses, Opportunities, and Threats. Essentially, with a SWOT analysis, restaurants are going through what their business does right, what it gets wrong, and what may or may not impact their business in the long term.

Strengths

Strengths are the things that a business gets right. It is the things that make people flock to your business. It may be good food. It may be unique dishes. It may be the high pay that you give your staff.

Weaknesses

It is essential that restaurants look at their weaknesses of a restaurant. These are the things that a company may not get right and may need further improvement. For example, cleanliness can be an issue, as can not enough staff during the busier periods of the day.

Opportunities

Opportunities are new areas that may be open to restaurants in the future. For example, new ways to get foot traffic through the door and changes to the menu may help. Even the loss of other companies in the city may be an opportunity for a business since they can open up themselves to entering new markets.

Anything that could potentially benefit the business will be an opportunity. It doesn’t mean that a business needs to follow through on these opportunities, knows that it can enter them if it wished to do so.

Threats

These are external factors that may influence the business. Restaurants may not have much control over these threats, but they must be wary of them. For example:

  • New restaurants in the area could cause restaurant guests to fall.
  • Economic woes may result in people eating out less.
  • Rent increases.
  • Bill increases.

If a business can identify potential threats, it will find it far, far easier to combat them.

Why You Need To Do a SWOT Analysis

A restaurant SWOT analysis is essential. It is a simple exercise both for a new restaurant and an existing restaurant, but it is one of the best methods for getting a view of the overall health of the business.

If a new restaurant carries out a restaurant SWOT analysis, it will work out what they need to do right to enter the market. For example, they may not want to offer the same service as their competitors but change their business to get more footfall.

An existing restaurant carrying out a restaurant situation analysis will be able to work out what their business does right and what it gets wrong. By changing up their business, their business’s success could change. For example, by eliminating weaknesses, a local restaurant may easily bring in new customers.

Restaurants that can carry out a SWOT analysis have an inherent advantage in a tough market. Businesses that don’t are doomed to fail.

Look At Restaurant SWOT Analysis Examples

Now we know the basics of why you need to be doing a SWOT analysis for your restaurant, let’s talk about how you can carry one out.

Your first step is to look at examples of the SWOT analysis example at the bottom of this article. Get a feel for the format. Find out what you need to be thinking about. If this is your first time putting together a list of your strengths, weaknesses, opportunities, and threats, then this information can be important.

Why Reading a Restaurant SWOT Analysis Example Is Important

Many people doing their first SWOT analysis may not know what goes into creating one. This isn’t a surprise. There isn’t a wealth of information out there. You may be told that you need to do one, but not why you need to do one.

Examples will show you that you need to look at your business critically. You can have some pretty harsh criticism for your business. The harsher the criticism, the better. Many people never do this, and examples should set you on the right path.

Don’t Copy The Examples

This is important. Never copy anything you read. Produce something unique. The issues of another company are not like yours. Copying their information is futile. It benefits your company in no way whatsoever. We gave examples of the major chains and you want to do something unique and different.

Solicit Feedback From Staff and Customers

Once you have looked at some examples, the next step in a restaurant SWOT analysis is to start getting feedback.

Don’t make a SWOT analysis on the back of your business ideas. You won’t look at it critically enough. Relying on what other people say, and will benefit you in many ways.

Encourage Honesty

You must encourage honesty when you are soliciting feedback on your business. Don’t just go up to people and ask them for their opinions. That won’t give you the competitive edge as they will be positive.

Look at all sources of information. Get people to submit anonymous feedback cards (particularly your staff), and look at online reviews for your business. There are plenty of great resources that you can tap into on that front.

Gather as much information as you can. If the same issues keep coming up about the dining experience (or the same pros), then that can be worked into the SWOT analysis.

Staff

Ask your staff about the strengths and weaknesses of working there. Again, try to get this feedback anonymously. Staff may not be looking to give their criticism to the business owner.

Your staff will be dealing with customers all day in the restaurant, so they will hear what the customers say. However, your staff may have other ideas about how the business is being run.

Customer Feedback

Customers can be harsh, and that is precisely what you want. You want them to be honest in what they say. Know whether they like the food. Whether the location is a good place for them, etc.

Not everything that your customer says will have value. Some restaurants hear some insane feedback from customers that aren’t rooted in truth. But, consider as much advice as possible. It will give you an advantage.

Come Up With Your Own Ideas

You will also need to have your ideas about the business. There are internal factors that your staff won’t be privy to, e.g., industry positioning, rising costs (including building rent, etc.)

You will also need to consider the surrounding restaurant market to build up your strengths and weaknesses. Honestly, a restaurant SWOT analysis is a pretty research-intensive exercise.

Preparing Your SWOT Analysis For a Restaurant

Once you have gathered some feedback, you can build your restaurant SWOT analysis. How you approach this is up to you, but we encourage you to include as much information as possible in your analysis. Although, we do understand that some businesses will bullet-point everything.

In this section, we will give you some ideas about the sorts of things you would need to think about. For each team on your SWOT, try to come up with 5-10 different points (at minimum) and, once again, don’t forget to be brutally honest.

Strengths

You can get off on a positive foot by looking at your restaurant’s strengths.

As we mentioned, your restaurant’s strengths are things your company gets right. For example, it may be the following:

  • Good food
  • Good selection of menu items
  • Clean location
  • Your staff are never run off their feet during busy periods so everybody is served quickly.
  • You are not over-staff during slow times.
  • You have a strong brand that people have heard of. We don’t expect you to have a McDonald’s strong brand, but something people know of.

Essentially, this is a list of all the pros of your business. Since a lot of business owners will tend to think way too highly of their company, you will need to look into feedback here.

Weaknesses

These are areas where your business may be suffering. For example, a restaurant may have the following problems:

  • Poor quality food
  • A bloated management team
  • Require better service
  • A bloated menu that pushes costs up
  • Slow delivery of items during rush hours.

Be critical of all of your service areas here. You will be improving on these aspects later on, but weaknesses will be one of the key ingredients for improving your restaurant so make sure that you get this right.

We like to think of this as thinking about what your restaurant lacks. What is your idea of a good restaurant? Look to your competitors here. You may look at competitors that have the same restaurant type. For example, if you were running a Michelin-Star restaurant, you wouldn’t compare yourself to a Denny’s.

 

Opportunities

Opportunities are areas that could lead to growth for your business. You do not have to follow through on all opportunities; know that they are there. For example:

  • A new residential area may be being built, leading to increased sales for your business.
  • Trends may be pushing your particular food a lot. Always look to social media for trends.
  • There may be a cheap way to expand your business.
  • Increased marketing campaigns may lead to better business.
  • Opportunities to increase menu items with better food.
  • Introduction of online ordering

Threats

For many, this may be the most challenging section to put together. However, it is easy. We promise. You need to consider all the external factors that could influence your business. For example:

  • If a new competitor is entering the arena
  • Rising supply costs
  • If the chef you own leaves, could you survive without them?
  • Adverse changes to the economy.
  • Rising operational costs

These are the things that are out of your control. However, you must be aware of them so you know how to deal with them.

Your opportunities and threats should be considered together because you may notice some opportunities as you go through the negative aspects. For example, a poorer economy can result in losing your competitors but can increase your opportunities to wrap up a market.

Conclusion – Restaurant SWOT Analysis

We have included a lot of information here, but we can assure you that putting together a SWOT analysis for your restaurant isn’t all that difficult. However, it is something that will benefit your company in a lot of ways.

Remember, try to review your SWOT analysis at least once a year. This way, you can see the progress that your company is making.

What is a SWOT analysis?

A SWOT analysis is a framework used to evaluate a company’s competitive position and to identify its strengths, weaknesses, opportunities, and threats.

How often should I review my restaurant’s SWOT analysis?

We recommend reviewing your restaurant’s SWOT analysis at least once per year. This way, you can track your progress and identify new opportunities or threats as they arise.

What are some examples of opportunities and threats?

Some examples of opportunities include introducing new menu items, expanding into new markets, or increasing marketing efforts. Some examples of threats include competitor expansion, rising costs of supplies, or unfavorable changes in the economy.

What should I do with my SWOT analysis?

Once you have completed your SWOT analysis, you can use it to help make informed decisions about your restaurant’s future. For example, if you identify a new opportunity, you can decide whether or not to pursue it. Or, if you specify a potential threat, you can develop a plan to mitigate its impact.

Example SWOT Analysis of Fast Food Chains

SWOT Analysis of McDonald’s

Mcdonald’s is one of the world’s largest and most popular fast-food chains. The company started as a small burger restaurant in 1940 and has grown to over 36,000 locations in over 100 countries. Mcdonald’s serves millions of customers every day and has become one of the most recognizable brands in the world.

Despite its massive size and popularity, Mcdonald’s has weaknesses. The company has come under criticism in recent years for serving unhealthy food and has been accused of exploiting children with its marketing campaigns. Mcdonald’s has also been criticized for its environmental impact, as the company produces a large amount of waste yearly.

Despite these weaknesses, Mcdonald’s remains a powerful force in the fast food industry. The company has a strong brand identity and can generate high customer loyalty. Mcdonald’s also has a significant financial reserve, which it can use to invest in new products and technologies.

Looking forward, Mcdonald’s will continue to face competition from other fast food chains and healthier food options. The company must find ways to appeal to customers concerned about their health and reduce its environmental impact. However, with its strong brand identity and financial resources, Mcdonald’s is well-positioned to continue being a leading player in the fast food industry.

SWOT Analysis of KFC

KFC is one of the largest fast-food chains in the world, with over 18,000 locations in 120 countries. The company is best known for its fried chicken, sold in buckets and as individual pieces. KFC also sells a variety of side dishes, including mashed potatoes, coleslaw, and biscuits.

Despite its large size, KFC faces several challenges. The company has been criticized for using genetically modified chickens and its food’s high fat and sodium levels. KFC has also been accused of animal cruelty due to how its chickens are raised and slaughtered.

Despite these challenges, KFC remains a popular choice for fast food, particularly in the US. The company has a strong brand identity and can generate high customer loyalty. KFC also has a significant financial reserve, which it can use to invest in new products and technologies.

KFC will continue to face competition from other fast food chains and healthier food options. The company will need to find ways to appeal to customers concerned about their health and reduce its use of genetically modified ingredients. However, with its strong brand identity and financial resources, KFC is well-positioned to continue being a leading player in the fast food industry.

SWOT Analysis of Burger King

Burger King is one of the largest fast-food chains in the world, with over 15,000 locations in 100 countries. The company is best known for its burgers, which are made with beef that is flame-grilled to order. Burger King also sells a variety of side dishes, including fries, onion rings, and milkshakes.

Despite its large size, Burger King faces several challenges. The company has been criticized for using genetically modified beef and high fat and sodium levels in its food. Burger King has also been accused of animal cruelty due to the way that its cattle are raised and slaughtered.

Despite these challenges, Burger King remains a popular choice for fast food, particularly in the US. The company has a strong brand identity and can generate high customer loyalty. Burger King also has a significant financial reserve, which it can use to invest in new products and technologies.

Looking forward, Burger King will continue to face competition from other fast food chains and healthier options. The company will need to find ways to appeal to customers concerned about their health and reduce its use of genetically modified beef. However, with its strong brand identity and financial resources, Burger King is well-positioned to continue being a leading player in the fast food industry.

SWOT Analysis of Wendy’s

Wendy’s is one of the largest fast-food chains in the world, with over 6,500 locations in 30 countries. The company is best known for its hamburgers, made with fresh beef cooked to order. Wendy’s also sells a variety of side dishes, including fries, salads, and soups.

Despite its large size, Wendy’s faces several challenges. The company has been criticized for using genetically modified beef and high fat and sodium levels in its food. Wendy’s has also been accused of animal cruelty due to the way that its cattle are raised and slaughtered.

Despite these challenges, Wendy’s remains a popular choice for fast food, particularly in the US. The company has a strong brand identity and can generate high customer loyalty. Wendy’s also has a significant financial reserve, which it can use to invest in new products and technologies.

Wendy’s will continue to face competition from other fast food chains and healthier food options. The company will need to find ways to appeal to customers concerned about their health and reduce its use of genetically modified beef. However, with its strong brand identity and financial resources, Wendy’s is well-positioned to continue being a leading player in the fast food industry.

SWOT Analysis of Taco Bell

Taco Bell is one of the largest fast-food chains in the world, with over 7,000 locations in 27 countries. The company is best known for its tacos, which are made with fresh beef cooked to order. Taco Bell also sells various Mexican-inspired dishes, including burritos, quesadillas, and nachos.

Despite its large size, Taco Bell faces several challenges. The company has been criticized for using genetically modified beef and high fat and sodium levels in its food. Taco Bell has also been accused of animal cruelty due to the way that its cattle are raised and slaughtered.

Despite these challenges, Taco Bell remains a popular choice for fast food, particularly in the US. The company has a strong brand identity and can generate high customer loyalty. Taco Bell also has a significant financial reserve, which it can use to invest in new products and technologies.

Taco Bell will continue to face competition from other fast food chains and healthier food options. The company will need to find ways to appeal to customers concerned about their health and reduce its use of genetically modified beef. However, with its strong brand identity and financial resources, Taco Bell is well-positioned to continue being a leading player in the fast food industry.

 

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