HIDALGO RESTURANT, INC: SUCCEEDING AS AN ENTREPRENEUR

I. VISION

A. Vision Statement

“For everyone who works with us to discover in themselves their talent and their potential and to build
relationship with each other”

B. Comments

Vision statements should answer the question “What do we want to become.” But Hidalgo’s vision
statement does not answer that question. It doesn’t even mention what kind of business they are into.

C. Proposed Vision Statement

To be the preferred restaurant of Filipinos and expatriates, providing total customer satisfaction through
quality, service, cleanliness, and value.

II. MISSION

A. Mission Statement
Hidalgo Restaurant, Inc. doesn’t have specific mission statement

B. Comments
A Mission Statement reflects the company’s core purpose, identity, values and principle business aims. A
Mission is defined as 'Purpose, reason for being'. Defined simply "Who we are and what we do."

Mission statements should possess nine (9) components which are (1) customers, (2) products or
services (3) markets, (4) technology, (5) Concern for survival, growth, and profitability, (6) philosophy, (7)
self - concept, (8) concern for public image, and (9) concern for employees.

C. Proposed Mission Statement

We are committed to provide total customer satisfaction and exceed customer’s expectations through
setting the trend in raising the bar, to be the change agents contributing directly to the country’s
development, creating standards of excellence which every Filipino may aspire, to be in the business of
building relationships and partnerships, among which one partner is the customer, in order to maximize
earnings that will benefit our supplier, employees, and investors.

III. EXTERNAL ENVIRONMENT ANALYSIS

The restaurant sub-sector includes places that serve food and drinks, be it self-service or full-service.
This covers a range of services including fine dining specialty restaurants, fast food outlets, canteens, and
food courts. In terms of its contribution to the national economy, the hotel and restaurant industry
accounted for 1.35% of Philippines’ 1998 gross domestic product (PHP12 billion in GVA compared to the
Philippine’s PHP889 billion GDP during the period) and 1.28% of its national product (PHP12 billion in
GVA compared to the PHP931 billion GNP). Moreover, the hotel and restaurant industry employed about
1% (282,142) of the country’s 31,278,000 labor force during the same period. Meanwhile, the National
Statistics Office (NSO) in 1994, classified 46,930 firms as belonging to the hotel and restaurant industry,
employing a total of 221,954 people. At the time, each peso investment in labor contributed PHP4.40 to
the industry’s total output while each peso investment yielded a PHP1.27 contribution to the same.

A. Economic Forces

Restaurant patrons cross all economic groups. Fast foods and food courts cater to all income classes.
Specialty fine dining restaurants, generally target the A, B, and C crowd. The proliferation of one-stop
shopping malls that offer various recreational facilities and amenities is also an important growth factor.
The heavy pedestrian traffic that the malls attract means big business for the restaurant industry,
particularly the fast food sub-sector. Moreover, these malls spare the restaurant industry from spending
extensive business development studies for their outlets; mall magnates Henry Sy and John Gokongwei
Jr. have established formidable track records in building malls. Finally, Filipino communities abroad are
strong basis for the export of local restaurants and fast food technology. The presence of Goldilocks,
Jollibee, Max, Red Ribbon, and Barrio Fiesta, among others, in the US, for example, is a result of demand
from Filipino migrants longing for a taste for home.

B. Social, Cultural, and Demographic Forces

The urban population to which restaurants cater is largely made up of young people who have higher
disposable incomes and who are more likely to experiment with different cuisine. Brand loyalty is
particularly strong in the fast food sub-sector of the restaurant industry. Jollibee patrons, for example,
generally stay loyal to the franchise regardless of price increases. Demand for dining out is associated
with both the ever-expanding options available, and also with the number one reason most consumers
use restaurants: they provide a convenient, reasonably priced experience that offers better flavors and
taste sensations than consumers can get at home. This has become particularly critical at a time when
more and more women are entering the workforce and consequently have less time to prepare meals at
home. Moreover, the Philippine population is youth-oriented. Almost half of the estimated 75 million
Filipinos are below 18. And since a large proportion of fast food consumers is between the ages of 16-24,
the annual 2.3% population growth rate guarantees market growth for the sub-sector.

C. Political, Legal, and Governmental Forces

Strong support of industry associations and trade unions (i.e., Hotel and Restaurant Association of the
Philippines and the NWHUAI) enable the hotel industry, among other things, to undertake programs and
projects that upgrade and professionalize the sector and to influence government regulatory
policies/laws/rules affecting the industry.

D. Technological Forces

International food chains and franchises facilitate transfer of technology in the local restaurant sub-
sector. They provide training of potential employees and employ strict quality control systems.
In terms of availability of technology, the Philippine market is highly competitive with numerous
products and brands offered at reasonable prices, and, therefore, allowing restaurant owners the luxury
of choosing the type of technology that best suit their operations. Equipment purchasing decisions
depend on the type of end-user. For instance, local single-unit restaurants need inexpensive equipment,
so price is the main guiding factor. On the other hand, fine dining restaurants are willing to pay a
premium for high quality, durability, after-sales service, cost effectiveness, reputable supplier and fast
delivery. Restaurant owners regularly participate in local and international equipment trade fairs,
allowing them access to the latest hotel equipment technology.

E. Competitive Forces

There are about 45,220 restaurant establishments in the domestic economy and about 80% of them
belong to the fast food sub-sector. Food franchising is extremely popular. There are 1,057 franchised
quick serve restaurants, 14 casual dining and theme restaurants, and 507 coffee shops, bakeries, and
confectioneries.

The industry in which the restaurant and fast food firms operate has increasing consumer demand for
every improving product. The growth is proven by the rapid expansion of food outlets in key areas in
Metro Manila and the provinces. The popularity of fast food establishments came in the 1980’s, and over
the last years, the industry has consistently posted double-digit growth rates.
Competition is fierce in the restaurant industry, particularly the fast food sub-sector. The market is large
but consumers are price conscious and exhibit brand loyalty. With a wide range of restaurants and fast
food establishments to choose from, pricing schemes and marketing strategies determine market shares.
Market strategies of industry players, therefore, aim to achieve two primary objectives: 1) hammer in
“value-for-money” concepts; and 2) create brand consciousness and loyalty.

Market shares in the restaurants are won or lost in pricing. Industry players regularly offer price cuts and
discounts to lure in new customers. Moreover, major players invest heavily in advertising to create brand
consciousness and loyalty. Marketing strategies include raffle draws, free gift items and specially prized
meal combinations, discounted toys and school items for every certain minimum food purchase.
Celebrity endorsements are used in the hopes that the market will identify with the endorser. Likewise,
intense competition urges players to come up with new products to capture bigger market shares.
Restauranteurs have to be keen at finding the latest food and wine concoctions here and abroad and
adapting them to local taste. Targeting the Filipino’s tastebuds, several fastfood chains that usually serve
only western food have introduced items that appeal to the local market’s palate.

Raising quality standards and improving service have also been focal points of competition, particularly
in the fast food sub-sector. Players give incentives and compensations to motivate employees to be
efficient on their jobs and thus help maintain the fast food outlet’s high standards of quality service and
cleanliness. Also, a major importance in a fast food and restaurant is courteous and friendly personnel.
Not surprisingly, speedy service is among the more salient attributes people would highly expect from a
fast food restaurant.

F. Company’s Opportunities and Threats

1. Opportunities
 Innovating the best Filipino and European Cuisine
 Increasing demand of dining or eating out
 Department of Tourism’s projects and programs to attract tourists will expand the
hotel and restaurant industry
 Restaurant patrons cross all economic groups
 Strong support of industry associations and trade unions (i.e., Hotel and Restaurant
Association of the Philippines and the NWHUAI)
 2. Threats
 Restaurant patronage/sales are dependent on the levels of economic activity and real
income of local residents and tourists
 Increased competition in restaurant sectors and consumers exhibit brand loyalty
 Competition with fast-food chains
 Restaurant business involves perishable goods which have to be disposed of at the
earliest possible time
 Political instability, resulting in economic slowdown, reduces real income as well as the
demand for restaurant services.

G. External Factor Evaluation Matrix

Weighted
Key External Factors Weight Rating
Score
Opportunities
1. Innovating the best Filipino and European Cuisine 0.10 4 0.40
2. Increasing demand of dining or eating out 0.08 4 0.32
3. Department of Tourism’s projects and programs to
attract tourists will expand the hotel and restaurant
industry 0.12 4 0.48
4. Restaurant patrons cross all economic groups 0.08 3 0.24
5. Strong support of industry associations and trade unions
(i.e., Hotel and Restaurant Association of the Philippines
and the NWHUAI) 0.12 4 0.48

Threats
6. Restaurant patronage/sales are dependent on the levels
of economic activity and real income of local residents and
tourists 0.12 4 0.48
7. Increased competition in restaurant sectors and
consumers exhibit brand loyalty 0.10 4 0.40
8. Competition with fast-food chains 0.10 4 0.40
9. Restaurant business involves perishable goods which
have to be disposed of at the earliest possible time 0.08 3 0.24
10. Political instability, resulting in economic slowdown,
reduces real income as well as the demand for restaurant
services. 0.10 3 0.30
1.00 3.74

IV. INTERNAL ENVIRONMENT ANALYSIS

 A. Company Strengths and Weaknesses

1. Strengths
 Founder’s management skills, capabilities, and interest
 High quality of products in affordable price
 Restaurant’s ambiance, portion size, and consistency
 Establishment of Hidalgo was preceded by intensified study of the target market

2. Weaknesses
 Constant turnover of kitchen personnel
 Filipino market doesn’t understand well the French cuisine

B. Internal Factor Evaluation Matrix

Weighted
Key External Factors Weight Rating
Score
Strengths

1. Founder’s management skills, capabilities, and interest 0.20 4 0.80

2. High quality of products in affordable price 0.20 4 0.80
3. Restaurant’s ambiance, portion size, and consistency 0.20 4 0.80
4. Establishment of Hidalgo was preceded by intensified study of
the target market 0.10 3 0.30

Weaknesses
5. Constant turnover of kitchen personnel 0.20 4 0.80

6. Filipino market doesn’t understand well the French cuisine 0.10 4 0.40
1.00 3.90

V. OBJECTIVES, STRATEGIES AND ACTION PLAN

A. Objectives
 To bring foreign visitors to dine on Filipino cuisine
 To reduce employee turnover rate
 To compete well in Makati to prove the ability to compete in other locations

B. Strategies
 Support sustainable tourism programs in the Philippines
 Develop new recipe and food variants that could suit the taste of foreign visitors (e.g., mixing
and matching Filipino and European cuisine)
 Create company policy on hiring, provide training and development, career advancement
 Create intensive marketing strategy
 C. Action Plan

Activity Responsibility Time Element

Coordination with the Department of Tourism Corporate Planning &
in the involvement and support on tourism Marketing
programs Department regular/continuous
Research and market study on food R & D and Marketing
preference of foreign visitors Department 3 months
Top Management
Creation, preparation of policy manual and HRM 3 months