Business Feasibility Study: Hot Pot Restaurants Markets Term Paper

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Business Feasibility Study: Hot Pot Restaurants Markets
Hot Pot restaurant, located in Flushing, New York, is an Asian restaurant with variant Chinese cuisines an exotic experience. The restaurant has a seating capacity of 70 people and also offers different staples and snacks in addition to beverages to diversify customer choice which is a major element in attracting and maintaining customers. The restaurant also uses different ingredients combining seafood, vegetable, meats, and mushrooms to the signature Hot Pot dish to address the tastes and preferences of the growing customer base. It also has an established customer-oriented service through a team of well-trained staff- Chefs, assistant chefs, waiters, and a financial officer- who are dedicated to ensuring quality delivery. The restaurant operates under an open management system observant of consumer trends as a way to maintain and expand its customer base. The break-down aspects the restaurant uses for market analysis and factors include orienting its products and services to its target group(s), market trends, sales forecast, swot analysis, pricing, and promotion.
Target Market
Although the restaurant targets customers from various social demographics, the main focus is the growing Chinese student population in New York. The locational concentration is Flushing and its localities to enable the timely delivery of the takeaway service that the restaurant incorporates in its catalog. Flushing is one of the New York with a large Chinese population which concentrates the main target market among the Asian immigrant population. Areavibes.com records Flushing Asian population at 70.54% of the total population compared to 13.71% in the entire New York. The area is also a hot spot for Chinese Americans who pool into the vibrant epicenter of Queens creating a thriving Asian culture who are a great potential market for the Hot Pot Restaurant (Haller). The New York metropolitan area is also proximate to several colleges and universities that provide a steady customer base. Some of the main learning institutions near Flushing that are accessible through both in-house dining and take-outs include the Nassau Community College, SUNY Maritime College, CUNY Queens College, New York University, St. Jones University, and Columba University (Study.com). These demographics are indicative of a vibrant customer base that covers the adult Asian population. The college population also presents a cultural convergence giving the restaurant an extension of the customer base beyond the Chinese. Although Hot Pot requires adult supervision in the preparation thus limiting the younger population, the communal aspect of the dish expands the age bracket to include children (who are accompanied by the parents or supervision) by offering extra provisions like snacks and board games during the wait.
Market Trends
Transparencymarketresearch.com noted that one of the notable trends that concern the Hot Pot restaurant business is the concerns about health practices and food safety increasing the scrutiny in the choice of ingredients. The US market is usually mindful of the ingredients used in the cooking especially since the Hot Pot prepares the meals in the customer presence. One of the trends in Hot Pot preparation by restaurants to assure customers of safety and health concerns is the use of kitchen surveillance that transmits the process to customers (Liu). Health concerns have led to the abolition of manicures and pedicures which is a popular attraction to Chinese products as an extra service necessitating a switch to other value-addition services. It also necessitates the variation in the condiments offered to customer dipping sauce leaving the customers to choose their spices instead of providing an already cooked meal. The Chinese population surge in the US has led to its cultural assimilation in the US which has popularized the Hotpot Cuisines not only in New but also in other metropolitans with significant Chinese population (Chau). This cultural embrace from the Chinese population is a great trend that expands the hotpot tradition thus providing the restaurant with great growth potential. The student population also embraces the take-out and ordering culture moving from the traditional sit-ins meaning that the restaurant should have reliable ordering and takeaway services. The Covid-19 pandemic also reinforces the reliance on takeout and ordering.
Sales Forecast/Market share
The business will rely on the buildup approach of sales forecasting as it helps in identifying any over/under-estimations giving a more feasible and empirical forecast of the market. Due to the geographic and line specialization, a customer forecasting survey would be more appropriate. The survey would focus on the Flushing Asian population and Chinese restaurants' consumption habits for a while to establish the quantities that a Hotpot outlet would sell with the same customer base. Noting the customer trends, types of food, and restaurants, and quantities in the Flushing area. The area’s population- 81,947- is not too extensive for consumption-based research and also offers enough customer reach for a restaurant (Areavibes.com). This is an example of the sales forecast for the restaurant based on the population.
Asian population- 70.54100×81947=57, 805
According to bls.gov, the average American household 13.3% of their income ($73,806) on food 45.6% of which is spent on food away from home.
This means that the amount spent on restaurant food by the Asian population would be 13.3100×73806 =$9816
The amount spent on restaurants
45.6100×9816=$4476 which is approximately $12 per day
According to fortune.com every one in six restaurants in New York is Chinese
Usatoday.com report showed 78 full-service restaurants per every 100,000 people making it 13 Chinese restaurants per every 100,000 in Flushing which has 57,805 people of Asian origin
This shows that approximately seven Chinese restaurants are serving the population.
Assuming 2% of the 8257 people per hotel decide to order per day the restaurant would have 165 per with a daily expenditure of $12 making the forecasted sales to be $1,981 per day.
Considering that the area has a larger student population who eat out than the average American, the projections are definitely to be higher but a leveled prediction ensures realistic results during the initial stages.
Competition and Swot Analysis
Some of the characteristics that make Flushing attractive for establishing a hot point restaurant like the vast Chinese population lead to the competitiveness for the market as other restaurants target the same population. The area is famous for Chinese restaurants and other stores diversified by subway No. 7 and Roosevelt avenue offering a competitive environment for both space and market (Haller, 2014). One of the main factors to consider when investing in a Hotspot in Flushing is the increasing number of Hotpot restaurants representative of different parts of China (Trapasso). Another source of competition comes from the already established Chinese food chains expanding their business to new markets which may drown start-ups (Dutton). The significant Korean population in Flushing also presents a significant competition as they also promote their cultural food which has created a collaborative approach to combine both in one restaurant (Moskin).
* Strengths
The greatest strength of setting the Hot Pot restaurant is the vibrant Chinese population in Flushing providing a steady customer flow through the year. In addition to the Asian population, the area also has several colleges and universities which constitute the main target market of the restaurant. The use of varied ingredients and hot pot meals combined with different condiments...