Case study

ARTICLE 1
Mexican wave
Date: November 13, 2007
Reporter: Monique Butterworth
Source: https://web.archive.org/web/20151123182325/http://www.smh.com.au/entertainment/mexican-wave-20100223-owq6.html

Photo: Paul Jones

Sydney is in the midst of a mini Mexican revolution with a strong American influence behind the new
food outlets. Taqueria Mad Mex Fresh Mexican Grill is set to open its doors in Darlinghurst on
Monday with a Baja-Mexican menu and the established Guzman y Gomez taqueria franchise is
launching its third store.

They join long-established venues including Vera Cruz, which has been at the forefront of Mexican
food in Sydney since it opened a decade ago.

Alberto Hernandez, president of the Cultural and Academic Mexican Association, is buoyed by the
interest in Mexican food and the new openings but says Sydney still has a long way to go.

"For food to be authentic Mexican, the most important thing is the flavour, the ingredients, some of
which can only be found in Mexico, and the way it is cooked," says the 30-year-old from Mexico City.
"But to be as Mexican as possible, it needs to be cooked by Mexican people. All these elements are
important."

Hernandez says finding "authentic" Mexican is tough.

"I love Mexican food and one of the closest I've found here in terms of authenticity is Guzman y
Gomez. I go to the Bondi Junction store," he says.

But Hernandez doesn't just go to Guzman y Gomez for the food. "The food is good but one important
thing I love is to go there, listen to the Mexican music and speak Spanish with the guys who work
there."

Guzman y Gomez founder Steven Marks opened his first taqueria in King Street, Newtown, a year
ago and has since opened outlets in Bondi Junction and Kings Cross, with plans to open in the CBD.
He says many Australians don't understand Mexican cuisine.

"Mexican is simple, really flavourful food. Once we get people in and they realise the Mexican food
they're used to is nothing like how we serve it, they keep coming back," says the New Yorker with a
background in finance.

"Australians are used to Mexican being covered in refried beans, cheese and sour cream - that's bad
Tex Mex - and we're not that. We're Mexican. There is no sour cream in this store. Tex Mex is the
American version of Mexican - like hard-shell tacos, sour cream. Our tacos are homemade, fresh corn
tortillas. We import seven different types of chilli from Mexico.
"The reason Australia has a bad interpretation of authentic Mexican is because there are few
Mexican chefs here. The Mexican community itself isn't very big." About 3000 Mexicans live in
Australia; about one-third in Sydney.

Newcomer Mad Mex Fresh Mexican Grill in Crown Street, Darlinghurst, derives its inspiration from
the Baja Peninsula extending south of California into the Pacific Ocean.

The food from this region blends the traditional flavours and spices of Mexico with the health-
conscious cuisine of California. Owners Clovis and Angela Young have teamed with chef Rafael
Nazario, who came to Australia to launch Guzman y Gomez with Marks.

Clovis Young grew up in southern California around San Diego. "In my adolescence we moved from
California to Massachusetts - from the mecca of Mexican food to the vacuum of Mexican food - so the
last 20 years we made our own Mexican food. It's such a phenomenal cuisine, under-represented in
some states of the US and here."

Chef Nazario, from Puerto Rico, learned about Mexican food in California and Mexico, where he also
penned the cookbook Sand In Your Shoes.

"Mexican cuisine is fresh, healthy and light," he says. "People's perception here of Mexican food is it's
buried under a mound of refried beans, cheese and sauce but that's got nothing to do with it. It's
grilled and it's healthy."

Young agrees: "Mexican food in Australia underperforms in people's expectations. People who have
travelled to Mexico or southern California have an understanding of what Mexican food can be."

Annette Zubani, owner of Vera Cruz in Cremorne, says: "There has been a change in attitude to
Mexican food. There is more understanding. People realise it's not all about the heat factor. It's about
the complexity of the flavours. You've got market-place food, home-style cooking and the food you
get in better restaurants.

"We pick the best dishes from all different regions. It makes it more interesting," she says. "One thing
we do that everyone loves is a chilli salt rub made from dry chillies, roasted garlic and sea salt. We
coat lamb cutlets with it and it gives them a smoky, salty crust."

She opened the restaurant after travelling to Mexico and trying "amazing food" not available in
Sydney.

"Australians love spicy food but our proximity to Asia meant Asian food was dominant. I thought it
was something a bit different, because of the flavours, chillies and spice. We were trailblazing. There
were hardly any Mexican restaurants in Sydney when we opened and there still aren't very many.

"We get a lot of Americans coming in. Some of them don't get it, they're expecting Tex Mex. It's not
about that."

Zubani says new taquerias such as Guzman y Gomez and Mad Mex are a good thing. "The food is
perfect for our climate. Which is also why I opened a Mexican restaurant. Sydneysiders like a varied
table - not just one big meal - all those little, light dishes is the perfect way to dine."

Emmanuel Trinidad Hernandez, from the Mexican Embassy in Canberra, says it is easier to buy
Mexican ingredients here than people might expect.

"You can find a lot at the supermarket or online at Fireworks Foods."

ACTIVITIES FOR ARTICLE 1

1. Identify what type of business Guzman y Gomez is.

2. What is the role of the business?

3. What industry doses Guzman y Gomez represent?

4. Outline the influences in establishing the business that founder Steven Marks would have
considered.

5. Identify the external influences that would impact on the business.

6. Outline the factors that contribute to Guzman y Gomez’s competitive advantage.

ARTICLE 2
From Wall Street, he rode in on a Mexican wave
Date: April 9, 2012
Reporter: Max Mason
Source: https://web.archive.org/web/20140724042533/http://www.smh.com.au/business/from-wall-street-he-rode-in-on-a-mexican-
wave-20120408-1wjfd.html

Steven Marks says he saw a gap in the Australian dining market for reasonably priced, quality Mexican food. Photo: Peter
Braig

ON HIS 40th birthday, instead of celebrating with his family back home in New York, Steven Marks
was in Queensland giving away 3744 burritos at the opening of his newest restaurant.

"You lead by example, whether it's walking head office or one of our restaurants, it's the same
passion," said the former hedge fund manager turned founder of Mexican restaurant chain Guzman
Y Gomez (GYG).

"To us real Mexican is really urban, street and hot. Latin people are so full of energy and full of life,
we wanted to bring that to Australia.

"Never compromise on quality, whatever you sell has to be the best."

It has been almost six years since Mr Marks turned his dream into reality with the opening of the
first GYG in Sydney.

Mr Marks, who moved to Australia 10 years ago, founded GYG in 2006 on the premise of filling a hole
in the market.

"My wife said, 'I'll take you to Mexican' and the place was horrendous and I realised at the time in
Australia, you had fast food places like McDonald's and you had restaurants, but there wasn't that
much high quality food in between at really reasonable prices. That's what Mexican was like in the
States," he said.

When friends of the former Wall Street man found out he was going to open his own Mexican
restaurant, he said they were a little puzzled, but he believed in what he was building despite the
initial struggles.

"The first three years were extremely painful — there were a lot of doubts, money was really tight,"
said Mr Marks, who provided the only capital for the first few years of the business.

"It took a while for people to understand the flavours of our food, so the first two years, that
education was very costly."

Mr Marks maintains the key to his success was the lack of compromise on the quality and
authenticity of his food, as well as simple hard work.
He brought in chefs from Mexico to work and teach others to create the flavours that he believed
were lacking in Australian attempts at Mexican.

He often worked 100-hour weeks before he could afford more help with the business.

But within five years he had taken GYG from one restaurant to 12 and Mr Marks, who is now backed
by a team of experienced food executives led by former McDonald's Australia chairman Peter
Ritchie, expects growth to increase exponentially.

Mr Marks said he expects sales to increase by 100 per cent as GYG expands from 12 restaurants to
23 by the end of this year, with expansion into Victoria and Western Australia.

Such rapid success and expansion has meant Mr Marks has had to learn quickly how to manage his
time between being a family man and a boss. "My wife knows how important GYG is to me, I have a
responsibility to the people that become part of the GYG family," he says.

"I am always home in the morning and at night to see my kids and I'm always with them on the
weekends."

Mr Marks has brought in more people to help, although he says he is the person to lead GYG forward.
"We're still in the really early days, I think when you build your own business it's very hard and you
want to be the best and you can't be the best never being there," he said.
ACTIVITIES FOR ARTICLE 2

1. Identify the factors that would make Steven Marks, the founder of Guzman y Gomez, a
good entrepreneur.

2. Identify one example of forecasting mentioned in the article.

3. Outline where in the Business Life Cycle Guzman y Gomez is at the time of the article.

4. Describe Steven Marks’s vision and business goals.

5. Outline some factors that contribute to GyG’s competitive advantage.

ARTICLE 3
Mexican revolution as GYG goes global
Date: MAY 26, 2015
Reporter: DAMON KITNEY
Source: The Australian Online: https://www.theaustralian.com.au/business/companies/mexican-revolution-as-gyg-goes-global/news-
story/c65e8e1199bb7b40ef90c6a3b39c8b03

The Mexican restaurant business backed by private equity king Simon Moore and three pioneers of
McDonald’s in Australia has appointed its first chief executive for its local business, freeing up
founder Steven Marks to pursue the group’s global plans, including a major partnership in China.

Guzman Y Gomez has hired Mark Hawthorne, who until earlier this year was managing director of
McDonald’s UK before returning to Australia for family reasons.

He formerly headed up McDonald’s Asia Pacific, Middle East and Africa (APMEA) and prior to that
was managing director of McDonald’s New Zealand after holding various positions in McDonald’s
Australia.

“He is a gun. I think he is the best operator out there,’’ Mr Marks said, noting Mr Hawthorne’s
services had also been sought by a number of competitors in recent months.

His appointment GYG’s chief executive for Australia and New Zealand will free up Mr Marks to drive
the group’s overseas expansion plans, which are expected to include a partnership in China in the
coming months.

The group now has 62 restaurants in Australia and just opened its first store in Tokyo as part of its
Asian expansion plans.

Over the next 12 months the group wants to open up to 25 new restaurants in Australia, an -
expansion to be spearheaded by Mr Hawthorne.

After initially building a strong footprint in Queensland and NSW, Mr Marks said the number of
stores in Victoria would double from four to eight over the next four months, while GYG’s stores in
Western Australia would grow from three to six over the next six months.

The first GYG stores are also set to be opened in Darwin and Adelaide, coinciding with the rollout of
the group’s first big marketing campaign.

“Now we are going to start to market. We don’t get enough credit for the quality of the product we
sell,’’ he said.

He added that the group’s newest restaurants were generating much larger revenues than its first-
generation stores, although he claimed its flagship World Square store in the Sydney CBD was at
present delivering 20 per cent revenue growth. GYG’s annual turnover is now more than $100
million.

GYG is backed by the former chairman of McDonald’s Australia Peter Ritchie as well as Carlyle Group
managing director Simon Moore, Kmart chief executive and former McDonald’s Australia chief
executive Guy Russo and the former deputy managing director of McDonald’s Australia Stephen
Jermyn.

Together they own about 45 per cent, with the remainder split between Mr Marks, his business
partner Robert Hazan and some of their family.

Mr Marks worked as a hedge fund manager in London and New York before moving to Australia in
2005 and established the GYG concept, which is to sell healthier, fresher Mexican food.

The first restaurant opened in Sydney’s inner-west suburb Newtown in 2006.

ACTIVITIES FOR ARTICLE 3

1. Outline GyG’s plan for expansion over the next 12 months.

2. What measure have GyG taken in order to drive the global expansion?

3. Predict the success of GyG, based on the information you know so far.