Company Case 1:Abou Shakra
freshness.
Restaurant: Creating Customer Value
the Old-Fashioned Way
Abou Shakra is a chain of restaurants in Egypt well
known for charcoal cooking—grilled 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 restaurant was 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 restaurant’s
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.
Succeeding 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 Shakra’s
competitors at the time also offered traditional oriental
Egyptian food, and due to a lack of other cuisines, he
was essentially competing with the whole market. It was
thus very challenging to start up a business in a 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.
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 has endured right
from Abou Shakra’s establishment. We will now take a
closer look at how Abou Shakra applies the philosophy
of offering 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 quality—only 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
The fruits and vegetables are also delivered
daily and are specially stored to maintain freshness up to
the time of serving. Abou Shakra’s 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 Shakra’s specialty.
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 every time they eat at Abou
Shakra. This has also 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 Shakra’s managers pay attention to every
small detail; they ensure that each restaurant is spotless
and that the kitchen is held to the highest cleanliness
standard. 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 to provide the guests with the best kind
of 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
recruiting and training them in order to maintain the
company’s reputation 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 Shakra’s solid customer base is not only due to the
quality of the food and the service offered, but also its
slow-growth expansion strategy. Abou Shakra
restaurants cannot be found on every corner; even after
65 years only 13 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 a 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
that could deliver fresh ingredients on a daily basis; this
was an important factor 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.
desirable employees are recruited and trained correctly
and provided with the appropriate working environment,
then success is inevitable. Ahmed Abou Shakra, the
company’s 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, so
long as the business objectives are met and customers
are continued to be placed first, is expected to last.
Questions for Discussion
1. Describe Abou Shakra in terms of the value it
provides for customers. (6 pts.)
2. Do you think Abou Shakra should develop a
high-growth strategy? Why or why not? (4 pts.)

Along with other aspects of its simple but 3. Should Abou Shakra spend more on advertising
focused strategy, Abou Shakra does not spend a great than what is currently expended? (5 pts.)
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 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 members 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. Instead of spending a large amount of money
on advertising, which may not generate profitable
returns, more money is spent on increasing the quality of
food and service provided.

Many have questioned whether Abou Shakra’s

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