The Dairy Queen Restaurant in Kuwait is found in Kuwait City. It is located in the Balajat Street. It is found exactly inside the Kuwait Commercial Markets Complex of Salmiyyah. Salmiyyah is believed to be an aristocratic arena found in Kuwait City. This is the reason why dining and eating out at the restaurant of Dairy Queen is such a pleasure. 59 The location of the Dairy Queen Restaurant in Kuwait City is so flexible to the people who are wishing to have a light meal since it can be reached easily even though where part of the city you are coming from.
Another advantage of the Dairy Queen Restaurant in terms of their location is that it is inside an aristocratic arena wherein high class and middle people are currently going there to have some social functions. It will be very helpful for the increase in sales of the restaurant given that they offer food which is very pleasing to the public. One of the definitions of business external environment factors is comprised of all the related factors that should be taken into consideration by the organization or by the management of the business to do its decision making (Duncan, 1972).
Moreover, the factors of the external environment should be able to depend on the involvedness and vitality of the environment. It is further explained that when the external environmental factors does not show any changes, it will be classified as stable while “unstable” if the reverse is happening. It is termed as dynamic if there are continuous and relative changes happening (Aguilar, 1976). But it is still the perception of the business organization to classify the external environment factors since this will be based on how complex is their business.
In terms of the social factor which is included in the external environment factors which are will distinguish the success of the Dairy Queen store in Kuwait City, it is therefore very essential to know the population of the city, the age groups, the buying patterns and other social factors of the city. According to the United Nations, the estimated population of Kuwait City as of 2003 is 1. 2 million. This population is a consideration for the management Dairy Queen Restaurant in Kuwait City for establishing the restaurant.
The population is just enough to cover the land area of Kuwait City which means that the population is sufficient for the Dairy Queen Restaurant to have a chance of gaining profit. Not to mention that there are a lot tourists who visits the city everyday. The age structure of the city is more concentrated of the 15-64 years old which comprises of 68. 82% of the total population. This indicates that within the age range of 15-64 years old, which comprise of more than half of the population might as well consume products of the Dairy Queen Restaurant.
The buying pattern in Kuwait City is that there is a large possibility of Kuwaitis to buy American food products because of their large disposable income. According to a study done by Welsch et al (1998) that it is more likely for the Kuwaitis to buy American products. American products that are available in Kuwait City are mostly fast food products and this includes the Dairy Queen Restaurant. In terms of the technological factors which include the technologies present in the place, Kuwait City is technologically equipped nowadays.
It is an opportunity for both the costumers and the management of the Dairy Queen Restaurant because of the convenience that it will bring them. Transactions will be made easy since electronic equipments are utilized. Economic factors include the costumer demand, pricing strategies, number of potential supplier and others are also determinant of the success of the Dairy Queen Restaurant in Kuwait. It was discussed earlier that Kuwaitis have large disposable income wherein they are likely to buy American products is a positive trait of the economy for the restaurant.
Competitors like other fast food chains are also present in Kuwait City, but prices vary. Pricing of the other American fast food competitors is as low as the pricing of the products being sold. Some food prices only vary but the thing to be considered is that the fast food chains don’t have similar products, so customer preference is still a factor to be considered. Political factor is not much to consider since politics is not a threat to the market specifically in the fast food industry.
If the management of the Dairy Queen Restaurant had submitted all the requirements for compliance to the policies, problems would likely to be avoided. There are several procedures in order to secure a business permit to operate in Kuwait. Corresponding charges are set by the government of Kuwait City. The first step is filing an application to establish a business in Kuwait City. This application should be filed in the Department of Partnerships. The DOP is located at the Ministry of Commerce. The second step is choosing the name of the company together with application filing at the Commercial Register.
In case of the Dairy Queen Restaurant, the name choosing is not also a big concern since the name is already given by the International Dairy Queen. The third step is the retrieving back of the filed application upon approval of the application at the Department of Partnership with three notes. The notes are addressed to the Bank, to the Municipality and to the Criminal Investigation Department. The fourth step is to open an account for the company in the Bank as the note from Department of Partnership had instructed. There should be a deposit of the initial capita in the bank.
This is to get the deposit evidence. The fifth step is to get the criminal records of the applicants for the set up of business in the Criminal Investigation. The note from the DOP states that there should be a criminal investigation for the owners of the company and will only be cleared if there are no criminal records existing. The sixth step is the issuance of the certificate from the Community after a rigid inspection in the area where the business is located. The seventh step is for the company to obtain a form of Memorandum of Association at the Department of Partnership.
A public notary will notarize the form after signing the required portions in the form. Then, a license from the Department of Partnership should be obtained in order to start the operation of the business. Registration at the Commercial Registry and at the Civil Data Department should also be done after obtaining the license. Finally, company’s labor file should be filed at the Ministry of Labor and Social Affairs (DoingBusiness. com, 2007) Markets There are many factors affecting the pricing of various goods in the Dairy Queen Restaurant in Kuwait City.
One important factor is the demand of the consumers for the products of the Dairy Queen Restaurant. When the demand for the food product of the restaurant is high, there is likely to be a lower price of the various products of the restaurant. The reason behind this is that higher demand will be the one to dictate the rate of pricing in the restaurant. Another factor that would influence the price of various goods is the income of the people in Kuwait City. Higher income for the Kuwaitis will also increase the demand for the food products, therefore, the price of the good will also be decreased.
Lower income due to some problems like unemployment will also determine the pricing of various goods in the Dairy Queen Restaurant. But before decreasing the price of the product, economic analysis should be first done in order to determine the real demand of the market. Management strategies should also be considered in lowering and increasing the prices. The law of demand states that when there is a higher price of good, there will be less demand for the product supposing all factors remain constant (Refer to Figure 1).
When the price of the food products sold by the Dairy Queen Restaurant is very high, there will be a very low demand for the products of the restaurant, therefore, there would be a lower profit for the restaurant. The amount of good consumed or bought by the consumers when prices are higher will be less because as the price goes up, the demand will in return increase. When the prices of the food products in the Dairy Queen Restaurant, the tendency for the consumers is to avoid buying their products and the consumers will resort to buying other products from other competitors.
The demand schedule is the one which represents the amount of goods and services that are willing to buy at varied prices supposing all factors are held constant. The demand curve is downward sloping. This is because when there is decrease in price, consumers will tend to buy more goods. When the prices of the food products in the Dairy Queen Restaurant are lowered, the demand curve will be seen in the downward sloping position. The law of supply shows the products and services that will be sold at a certain price. The supply curve is always in upward slope not like the demand curve.
This means that when the prices of the goods and services, the higher will be the supply. It is expected that many producers or businesses will supply more because there is an increase in revenue when the goods and services are sold in higher prices. But the Dairy Queen Restaurant still offers a lower price so that their status in the market will remain the same. Processes The business model is defined as the range of informal and formal models that are used by businesses to symbolize various aspects of business such as the operational processes, organizational structures and financial forecast.
The business model consists of several business model building blocks. The value proposition is one of the building blocks wherein it is the term that explains what the market or what the business is offering (Arvertica 2005). It maybe in forms of products and services. For the Dairy Queen Restaurant in Kuwait City, their value propositions are food products and dining services. The value proposition is the one which dictates to a consumer why he should buy the product or why he should use the service. Another building block of the business model is the target market (Arvertica 2005).
The target market is what dictates the success of the business. For the Dairy Queen Restaurant, the target market are the people living in Kuwait City and the all the tourist who are visiting the place and who would like to have a taste of the Dairy Queen Restaurant products and who are eager to try their services. Another building block of the business model is the distribution channels of the business (Arvertica 2005). This explains the way of hoe the business deliver their products and services to the target market.
The business could use advertisements and several promotion strategies. For the Dairy Queen Restaurant in Kuwait, the business could use advertisements in order to promote their products and services. The marketing and distribution strategy of the Dairy Queen Restaurant is being explained in these building blocks of the business model. Relationship of the employees of the business and the consumers is also very essential building block of the business model (Arvertica 2005). Management of the customer relationship is being carried in the management of the business.
There should be a very pleasant relationship towards the customers because the customers are one of the essential factors that could determine the success of the business. In the Dairy Queen Restaurant located in Kuwait, the staff or the crew of the restaurant should be able to properly and politely deal with their customers so that customers should be able to return in their restaurant some other time. The core capabilities is also included in the building block of the business model. The Dairy Queen Restaurant in Kuwait had the required abilities and the competencies needed in the business industry in order to be successful.
Some of the abilities and key competencies lie in the management staff of the restaurant. Capabilities of the employees is very essential for the business to prosper. In analysis of the capabilities and abilities of the Dairy Queen Restaurant, there is a positive effect since the capabilities of the employees was able to determine the status of the business in the market. Capabilities and the key competencies of the Dairy Queen Restaurant had determined the positive effect through the costumers and through the promotion strategies in order for the products and services of the restaurant to be patronized by the people living in Kuwait City.
The configuration of activities is another building block of the business model (Arvertica 2005). This building block is to execute and employ benefits to the customer or consumers in the business industry. For the Dairy Queen in Kuwait City, the management of the restaurant had made sure and always making sure that benefits for the consumers by consuming their food products and by using their service is being given directly to the costumers. The staff and crew of the restaurant are able to do the activities regarding their offered services and products properly.
By doing that costumers will be able to be satisfied in their visit and dining to the Dairy Queen Restaurant. Partner network is also included in the building blocks of the business model. Partner networks are the business alliance that could complement the Dairy Queen Restaurant in Kuwait (Arvertica 2005). Since the International Dairy Queen is engaged in the franchising business, their partner network is within the franchisee of the restaurants. Their goal is the same, which is to provide a quality service with quality and affordable food.
In the financial structure of the business model there are two building blocks of the model. These are the cost structure and the revenue streams. Revenue stream is the way the company or the business is generating revenues in order to make moneys (Arvertica 2005). Revenues will be the one to determine the profit of the company. The Dairy Queen Restaurant is also using the concept of the revenue stream in generating money for the profit of the company. Cost structure is the one which explains the costs that the company is spending in order to make run the business (Arvertica 2005).
Cost structures of the Dairy Queen Restaurant are being spent in the different transactions of buying the different raw material for the food and products they serve. The money being given to the employees as payment for the services they do in for the restaurant are also included in the cost structure of the Dairy Queen Restaurant. Knowledge of the business model and concept is very essential in order to make an analysis in the business wherein you are engaged. The Dairy Queen Restaurant located in Kuwait was being able to make use of the model where they have used it as an important tool in making analysis of their business venture.