Dairy Queen Restaurant Essay Example
Dairy Queen Restaurant Essay Example

Dairy Queen Restaurant Essay Example

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  • Pages: 7 (1700 words)
  • Published: August 5, 2016
  • Type: Case Study
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Located at Balajat Street inside the Kuwait Commercial Markets Complex of Salmiyyah, The Dairy Queen Restaurant in Kuwait City offers an upscale atmosphere that enhances the dining experience. Being conveniently situated within Kuwait City, it is easily accessible from any part of the city, making it a convenient option for individuals seeking a quick meal.

Located inside an aristocratic arena, the Dairy Queen Restaurant attracts both high-class and middle-class patrons for social functions. This location will likely increase restaurant sales as they offer highly satisfying food to the general public. Duncan (1972) states that external environment factors of a business include all relevant considerations that management must consider when making decisions.

In addition, the classification of external environmental factors depends on their complexity and liveliness. If these

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factors remain unchanged, the environment is considered stable, whereas if they constantly change, it is labeled as "unstable." When there are ongoing and relative changes, it is referred to as dynamic (Aguilar, 1976). However, it is ultimately the responsibility of each business organization to determine how to categorize these external environmental factors based on the complexity of their own operations.

It is crucial to consider the social factors, such as population, age groups, buying patterns, and other elements, when evaluating the success of the Dairy Queen store in Kuwait City. The United Nations reported a population estimate of 1.2 million for Kuwait City in 2003. This demographic information is essential for the management of Dairy Queen Restaurant in Kuwait City as they plan to establish their business.

The Dairy Queen Restaurant in Kuwait City has the potential to be profitable becaus

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of its large population, particularly with tourists. With 68.82% of the population falling between 15 and 64 years old, there is a substantial customer base for the restaurant.

The purchasing behavior in Kuwait City indicates a significant likelihood for Kuwaitis to purchase American food products due to their high disposable income. Welsch et al (1998) conducted a study affirming this tendency among Kuwaitis. The American products available in Kuwait City primarily consist of fast food items, such as those offered at the Dairy Queen Restaurant. As for technological factors, Kuwait City is now equipped with modern technologies.

The Dairy Queen Restaurant in Kuwait benefits both customers and management through its convenient services. Transactions are made effortless with the use of electronic equipment. The success of the restaurant is determined by economic factors such as customer demand, pricing strategies, and potential suppliers. As mentioned before, Kuwaitis have a significant disposable income and a preference for American products, which boosts the restaurant's economy.

In Kuwait City, there is competition among various fast food chains with different prices. American fast food chains have similar pricing for their products. It's important to note that while prices may vary for certain items, these fast food chains offer a wide selection of products and customer preference plays a crucial role in choosing them. In terms of the market, political factors do not pose a significant threat, especially in the fast food industry.

In order to avoid problems, the Dairy Queen Restaurant management should have fulfilled all the necessary compliance requirements. To operate in Kuwait, specific procedures need to be followed for obtaining a business permit. The government

of Kuwait City determines the fees associated with these procedures. The first step is submitting an application at the Department of Partnerships, located within the Ministry of Commerce, to establish a business in Kuwait City. The next step involves choosing a company name and submitting an application at the Commercial Register.

The Dairy Queen Restaurant is fortunate as the International Dairy Queen has already given them a name. Once approved by the Department of Partnership, they file an application and include three notes for the Bank, Municipality, and Criminal Investigation Department. The following step is to open a company account at the Bank, as directed by the Department of Partnership. It is essential to deposit the initial capital into this bank account.

To obtain the deposit evidence, the fifth step is to acquire the criminal records of the applicants through the Criminal Investigation department. According to a note from the DOP, a criminal investigation must be conducted for the company owners, and they will only be approved if no criminal records are found. Following this, the sixth step involves conducting a thorough inspection in the business's location area in order to be granted a certificate from the Community. Finally, the seventh step requires the company to obtain a Memorandum of Association form from the Department of Partnership.

After signing the required portions in the form, a public notary will notarize it. To start the operation of the business, an obtained license from the Department of Partnership is necessary. Additionally, registration at the Commercial Registry and at the Civil Data Department should be done after obtaining the license. Finally, the company's labor file

should be filed at the Ministry of Labor and Social Affairs (DoingBusiness. com, 2007). In the Dairy Queen Restaurant in Kuwait City, there are various factors affecting the pricing of goods in the markets.

The pricing of products at Dairy Queen Restaurant in Kuwait City is influenced by consumer demand and income levels. When demand is high, prices are lower as they are determined by the level of demand. Moreover, higher income among Kuwaiti residents leads to increased demand and reduced prices for food products.

Lower income, such as unemployment, can impact the pricing of goods in the Dairy Queen Restaurant. Before lowering prices, it is crucial to conduct an economic analysis to accurately assess market demand. Additionally, adjusting prices should consider management strategies. According to the law of demand (Refer to Figure 1), higher prices result in decreased product demand if all other factors remain constant.

Elevated prices at the Dairy Queen Restaurant result in a decrease in demand and lower profits, as higher prices discourage consumer purchases. Furthermore, customers are more likely to choose competitors' offerings over those of the Dairy Queen Restaurant when prices are high.

The demand schedule displays the quantity of goods and services that consumers are willing to purchase at various prices, assuming all other factors remain the same. The downward sloping demand curve signifies that as prices decrease, consumers will buy more goods. Thus, if food items' prices at the Dairy Queen Restaurant drop, the demand curve will also slope downwards. In contrast, the law of supply governs how much products and services will be sold at a specific price. Unlike the demand curve,

the supply curve always slopes upwards.

As the cost of goods and services rises, their supply also increases. Producers and businesses expand their supply to generate more revenue through selling at higher prices. Nevertheless, Dairy Queen Restaurant defies this pattern by keeping lower prices in order to safeguard its market position. The business model encompasses different models illustrating operational processes, organizational structures, and financial forecasts for businesses.

The business model consists of different elements, such as the value proposition and the target market (Arvertica 2005). The value proposition refers to the products or services offered by a company to its market. For example, in Kuwait City's Dairy Queen Restaurant, their value proposition revolves around food products and dining services. This is how they convey to consumers the reasons why they should buy their goods or use their services (Arvertica 2005).

The Dairy Queen Restaurant in Kuwait City relies on its target market, which consists of local residents and tourists who want to try the restaurant's offerings. Distribution channels are crucial as they determine how the restaurant connects with its target market (Arvertica 2005).

The Dairy Queen Restaurant in Kuwait has the chance to advertise and promote their products and services using various strategies. The business model emphasizes marketing, distribution, and the relationship between employees and consumers. Maintaining customer relationships is crucial for overall business management (Arvertica, 2005).

The Dairy Queen Restaurant in Kuwait highly regards and acknowledges the significance of its customers in achieving success. Ensuring that the restaurant staff interacts politely with customers is essential to encourage them to return. The business model's fundamental capabilities are also considered vital,

as The Dairy Queen Restaurant in Kuwait possesses the required abilities and competencies necessary to thrive in the industry.

The management staff plays a crucial role in the abilities and key competencies of Dairy Queen Restaurant. The success of the business depends on its employees' capabilities. Evaluating Dairy Queen Restaurant's abilities and capabilities reveals their positive impact on the market status of the business. Additionally, these abilities and key competencies have positively influenced customers, leading them to adopt promotional strategies that encourage support for Dairy Queen Restaurant's products and services in Kuwait City.

According to Arvertica (2005), the organization and implementation of activities play a crucial role in the business model by providing benefits to customers. In Kuwait City's Dairy Queen, the restaurant's management ensures that consumers directly benefit from their food products and services. The restaurant staff and crew efficiently carry out the activities associated with their offerings.

Through this approach, customers can experience satisfaction during their visit and dining at the Dairy Queen Restaurant. The business model of Dairy Queen also encompasses partner networks. These networks consist of business alliances that can enhance the offerings of the Dairy Queen Restaurant in Kuwait (Arvertica 2005). As International Dairy Queen engages in franchising, their partner network comprises the franchisees of their restaurants. The mutual objective is to deliver high-quality services and affordable food items.

The financial structure of the business model includes two main components: the cost structure and the revenue streams. Revenue streams are how a company generates income, which ultimately determines its profit (Arvertica 2005). The Dairy Queen Restaurant also applies this concept to generate profit. On the other

hand, the cost structure outlines the expenses that the company incurs to sustain its operations (Arvertica 2005).

The Dairy Queen Restaurant incurs costs on various transactions for purchasing raw materials and serving food and products. The employees' payment is also considered a part of the restaurant's cost structure. Understanding the business model and concept is crucial for conducting an analysis of the engaged business. The Dairy Queen Restaurant in Kuwait successfully utilized this model as a vital tool for analyzing their business venture.

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