GROUP 2

DELACRUZ, GEMMAINE MIKAELA

LAYUG, JHAISTER ASHLEY
LAYUG, JOSHUA MARCO
MANUZON, MARGIE
OPO, YLLANE NICOLE
SICAT, JOVIELEN
TORRES, JOHN CHRISTTLE

a) What are at least two (2) of the challenges facing this industry? 
CHALLENGE NO. 1 - BUSINESS SURVIVAL – The goal of any businessman first
and foremost is to first survive, and profit is later. With Covid-19, we personally
witnessed in our very own community and the whole world a precedential closure of a
lot of businesses, be they big or small. And the restaurant business was not spared
even though it is providing one of the basic needs of a society which is food. We even
call them “essentials”. Now more than ever, survival through this pandemic has been
challenging all restaurant owners who has been operating on fewer customers, thin
margins and / or do not have a lot of money stored away for this tough times. Their
planning, marketing, business model, budgeting, human resource and policies,
operation and management were all put to a test and Covid-19 brought them to their
knees. As the restaurant business knows, No Customers + No Money = Business
Death which might be just a tick away. They need to survive this pandemic for their
employees and most especially for their families.

CHALLENGE NO. 2 – BUSINESS ADAPTION TO THE NEW NORMAL – Covid-

19 is here to stay, and we are all left with the uncertainty of knowing if Covid-19 is
the last (hopefully) or just the start of no end. This leaves restaurant owners, new and
challenging problems that were previously not known to them and which were being
thrown at them left and right. Worse, these new and challenging problems brought
about by Covid-19 are forces that are beyond their control like government health
protocols, the government social distancing requirements, the government operational
capacity requirements (30%, 50% or 100%), unpredictable government Covid-19 alert
level announcements, not to mention the new behavior of the customers resulting
from fear of Covid-19, fear of going out, fear of eating out, fear of the enclosed
structure of most restaurants because all people need to be comfortable, feel safe and
basically not die. All areas of the restaurant operation, be it on the side of the owners,
 the management, the employees and the customers have to adapt to this new normal
otherwise it might be too late, and it might mean death to their restaurant businesses.
b) What can they do to help increase their chance of success? 
Purchases can be made online, and a delivery-only menu can be created to match the
dine-in menu. The menu items should be easy to prepare and not easily spoil or melt
during shipping or delivery. Customers who have your services delivered to their homes
must also experience the presence of the restaurant's ambiance. Others who will be
unable to leave their houses due to employment or the pandemic may find the alternative
of having their meals delivered appealing. They need to generate more advertising
materials to spark people's attention. They must improve the taste of the products for
customers to return.
c) How can the deliberate management of fixed and variable costs increase the likelihood
of success, or at lease mitigate the effects of Covid19 for restaurants to continue
operating long enough until the end of this pandemic? 

The Covid-19 pandemic really had an impact not only to the whole world but to
businesses also, particularly the small ones because they are earning less than in prior
years. Just a few businesses will be able to maintain normal income levels at this time.
Regardless of whether a restaurant is open or not, considerable expenditures in space,
establishments, and kitchen facilities are made, even though industry revenues are often
low. The businesses are having difficulty controlling the fixed and variable costs of the
firm. Even if they have been given permission to launch their enterprises, it is still
insufficient to cover the expenses/costs. But there are ways for businesses to survive the
pandemic in the long run in this instance. Fixed costs include any number of expenses,
including rental lease payments, salaries, insurance, property taxes, interest expenses,
depreciation, and potentially some utilities. On the other hand, variable costs include
costs of goods sold (COGS), raw materials and inputs to production, packaging, wages,
and commissions, and certain utilities (for example, electricity or gas that increases with
production capacity). More than any time in the life of the restaurant business, Covid-19
required them to deliberate strategies which are out of the box and out of their comfort
zone to ensure survival through this pandemic. The numbers of customers are dwindling
and one way to survive or at least mitigate the effect of dwindling customers is to
deliberately manage fixed and variable costs. Through strategies like: - renegotiation of
rental terms, more particularly on the area of reduction of lease rentals during the
pandemic and no escalation of rental fees; - encouraging employees to understand the
management and support management measures on shifting of schedules, reduction of
working days or hours, possible reduction of wages; - conduct of study of menu being
offered to meet the demands of the customers to the extent of reduction of menu being
offered or new menu to offer; - addition of new business model to dine-in like delivery
and pick-up and presence (marketing) online; and - careful planning and consideration of
operational efficiency, customer activity, market trends, etc. management can design and
have some “CLEAR PLANS” that might work well with this new normal and give a
fighting chance to survive this pandemic. Without these deliberate management strategies
on fixed and variable costs, companies will surely lose and possibly die.