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Chapter 1

Case Study:
Abou Shakra Restaurant: Creating Customer
Value The Old-Fashioned Way
Abou Shakra is a chain of restaurants in Egypt well known for charcoal cookinggrilled meat, kebabs, and
kofta. In 1947 Ahmed Abou Shakra opened his first Abou Shakra restaurant in El Kasr El Einy, a famous central
district in Cairo. The first restaurantwas not in a consumer-attractive neighborhood, but that did not stop Abou
Shakra, who believed that offering healthy, tasty, and well- marinated food was more important than location in
attracting customers and having them return time and again if they received a good meal, the location of the
restaurant would not have much bearing on their future dining decisions. Initially the restaurants menu was very
simple; it mainly consisted of basic traditional Egyptian dishes, which was the standard menu offered in similar
establishments at the time. Abou Shakra decided to keep his menu simple and traditional to avoid the risks
associated with offering unfamiliar dishes to consumers. As a result, he focused on providing well-known
traditional dishes of exceptional quality.

Successing in a Competitive Market


When the first Abou Shakra restaurant was established, there was not a wide variety of cuisines featured at
restaurants, such as Indian, Chinese, and Italian, which are widely available today. As noted, Abou Shakras
competitors at the time also offered traditional oriental Egyptian food, and due to the lack of other cuisines, he
was essentially competing with the whole market. It was thus very challenging to start up a business in this
highly competitive market, and it was necessary for Abou Shakra to ensure that he could offer something that
would give him an advantage over his competitors. This advantage turned out to be the great customer value
offered by Abou Shakra, which was not offered by the majority of his competitors. The Abou Shakra restaurants
have maintained the persistent focus on customer well-being and satisfaction that originally gave them an
advantage over their competitors, and this is one of the reasons for their success. The importance that the
company places on elegant dishes, prepared with passion, and providing a memorable experience to their guests
had endured right from the Abou Shakras establishment. Since it was established, Abou Shakra restaurants have
been following that philosophy, and this is another reason for their success. We will now take a closer look at
how Abou Shakra applies this philosophy and offers customer value.
Abou Shakra owns its own factory, which supplies all branches and outlets with their daily requirements of fresh
meat and poultry. The meat is of high qualityonly the best beef and lamb. Meat is delivered to the factory
daily, and a governmental veterinary inspection is performed to ensure that the meat is fresh and of good quality.
The factory is equipped with the latest technology to guarantee that the meat is stored at the correct temperature
to ensure its freshness. The fruits and vegetables are also delivered daily and are specially stored to maintain
freshness up to the time of serving. Abou Shakras quality control department ensures that all finished products
are of outstanding quality, and oversees practices that prevent any of the ingredients from being contaminated.
The company has signed a contract with SGS Egypt to supervise its health, safety, and hygiene practices,
ensuring that they are of the highest standard. The Abou Shakra menu has changed very little over the past 60
years, maintaining the simple offering of traditional Egyptian dishes with a particular focus on grilled dishes,
which is now Abou Shakras speciality. The primary aim of Abou Shakra is to keep the menu simple so as to

wholly master the dishes offered. This has encouraged customer loyalty, as customers often choose their favorite
dishes for which they have come especially for. This has led to Abou Shakra being one of the most popular
places for oriental food in Egypt. Keeping the menu simple also limits the costs of purchasing different
ingredients from several suppliers. If this was not the case, the recruitment of more managers would be required
to contact the suppliers and follow up on the orders. There would also be more supervisors needed to ensure that
the delivery and storage processes take place smoothly and that each outlet receives its supplies on time. In
addition, more chefs who are specialized in the new dishes added to the menu would be necessary as well. Abou
Shakras managers pay attention to every small detail; they ensure that each restaurant is spotless and that the
kitchen is held to the highest cleanliness standards. All utensils and cutlery go through a sterilization process to
ensure their sanitation and safety. The tables are wiped with a special detergent so that customers feel they are
eating in a hygienic environment.

Focusing on Customer Service


Abou Shakra restaurants do not rely solely on their food to please their customers, but also on well-trained
employees who deliver extraordinary customer service. They hire energetic, friendly, and passionate employees.
Abou Shakra restaurants realized the significance of educating their workers as to the importance of customer
satisfaction, and this led to the establishment of their own training center. The center has a proficient team of
trainers who ensure that employees will have the necessary skills so that guests will be provided with the best
service. Abou Shakra relies on continuous training to provide employees with the necessary confidence and skills
to provide the utmost customer satisfaction. The company believes that its greatest asset is its employees, and
Abou Shakra thus invests heavily in appropriately recruiting and training them in order to maintain the
companys standards in the competitive market. One of the core principles of the company is that by taking good
care of the employees, the employees will take good care of the customers.

International Expansion
Abou Shakras solid customer base is not only due to the quality of the food and the service offered, but also to
its slow-growth expansion strategy. Abou Shakra restaurants cannot be found on every corner; after 65 years,
only 12 outlets are operating throughout Egypt. Abou Shakra decided to stay small and focus on having a few
outlets that provide outstanding service rather than have many outlets with average service. A new outlet is only
opened when the required employees have been trained and are prepared to offer the outstanding service that is
associated with Abou Shakra. It took the company 56 years to open its first branch outside Cairo, which debuted
in Alexandria in 2003. The popularity of Abou Shakra has extended far beyond Egypt, with the company
receiving many requests to open international branches from customers living abroad who had tasted Abou
Shakra while on holiday. The opening of a branch in Saudi Arabia in 2005 and another in Kuwait in 2007 are
great milestones in the history of Abou Shakra. This expansion was not an easy step for the company, and a
great deal of research was undertaken beforehand to find the correct locations for the restaurants. First, Abou
Shakra needed to find suppliers who could deliver fresh ingredients on a daily basis; this was an important factor,
because for Abou Shakra to succeed, it had to be ensured that the quality of food provided in any new outlets
would equal that of the Egyptian branches. Employees also needed to be recruited and trained in the same
manner as the employees in Egypt, to make sure that they provide their customers with the same outstanding
service. Along with other aspects of its simple but focused strategy, Abou Shakra does not spend a great deal on
advertising. Only a small proportion of its budget is set aside for advertising in newspapers and on television, as
the company relies heavily on word-of-mouth recommendations between customers and their friends and
families. Abou Shakra believes that the main objective is to take care of customers, and that to provide them with
high-quality food and service is better than spending money on advertising, as satisfied customers will be the
best advertising tool. They will tell their friends and family about their positive experiences at Abou Shakra, and
consumers are more likely to follow the advice of people close to them than promotional ads. This is also a
strategy the company uses to reduce expenses, as instead of spending a large amount of money on advertising,

which may not generate profitable returns, that money is instead spent on increasing the quality of the food and
service provided. Many have questioned whether or not Abou Shakras 65-year legacy can be sustained. Its
restaurants are run by co-founders and owners Ahmed and Hussein Abou Shakra, who have drawn up an
efficient blueprint for all of their employees to follow. They believe that if desirable employees are recruited and
trained correctly
and provided with the appropriate working environment, then the success of the business is inevitable. Ahmed
Abou Shakra, the companys chairman, played a critical role in the formation of the strategy that the company
would follow. He detailed the long- and short-term goals in a manner that is easy for all involved to comprehend.
The daily operations are organized and controlled by him, and he has developed an efficient system to ensure that
managers report to him. This system was developed when the business began to grow, as one person could not
manage the daily operations of every restaurant efficiently. Hussein Abou Shakra is the vice chairman of the
company, and he ensures that the financial goals and objectives of the company are being met. He supervises the
preparation of the financial statements and the budgets of the company. In the same manner as the chairman, he
has set up a structure by which all the finance managers report to him with daily updates. The legacy of Abou
Shakra is expected to continue with or without its founders. This is because Abou Shakra has become a
corporation that was established with strategies and objectives that, if managed correctly, will lead to a
successful business. This business legacy is much bigger than its founders, and so long as the business objectives
are being met and the customers continue to be placed first, it is expected to last.

Questions for Discussion


1. Describe Abou Shakra in terms of the value it provides for customers.
2. Do you think Abou Shakra should develop a high-growth strategy? Why or why not?
3. Should Abou Shakra spend more on advertising than is currently expended?
4. Do you think that the legacy of Abou Shakra will continue, with consumer tastes changing and moving toward
nontraditional cuisine? Why or why not?
5. Suggest other methods by which Abou Shakra can provide value to its customers.