Porcinis Pronto Great Italian Cuisine without the wait Harvard Case Solution & Analysis

Pros and Cons of Each Alternative:

The company has four alternatives for the future growth. The first alternative will be maintaining the status quo that is going with the same strategy and make no changes in it. The second alternative will be franchising the Pronto Restaurant. Third alternative will be based on syndication and the last alternative includes company fully owned restaurant.

Franchising:

First alternative is based on franchising the restaurant, which is a business strategy that a company uses to grow or to increase its share in the market. Further the franchising business is linked with the parent company in terms of each and every operation (Caves & Murphy II, 1976). Franchising will be one of the dominant strategies for the company as it will lead to low construction cost and site acquisition. Moreover, it will help the company to grow more with less capital. It will also help Pronto to reach in different market segments which in turn will increase the brand awareness. However, the company may face a risk of failure in franchising as maintaining quality of goods and services will be difficult to maintain. In addition to this, the new business may affect the Porcini already build reputation.

Financial analysis of the franchising alternative shows a positive NPV and ROI; which shows that it will be a viable option for a company to go with this strategy.

Syndication:

The second alternative is based on syndication, which (K, 2000) is defined as a complete shift of property ownership to the investors while giving full operational control to the parent company.  With the help of syndication growth strategy, the company will have a full access to the business operations and with a limited capital outlay; the company will be able to shift property ownership to investors. Moreover, it will also help the company to advance its business operations. However, the company has to bear several transactional costs related to investment bankers, lawyers, and closing costs. In addition to that, because of the weak brand image, the company will face difficulty in finding good investors.

Financial analysis that has been done in the spreadsheet shows calculation for Net Present Value and Return on Investment. NPV of the alternative is calculated $20.83 which is higher than the franchising option. However, the ROI of this option is less than the franchising growth strategy.

Company Owned:

If a company decides to pursue the third alternative then, the company will be able to get full control on company’s business and operations. It will help the company to maximize its vision statement along with the mission of the company. With the help of company owned restaurants, the company will be able to expand at its own pace.

However, to pursue this alternative the company will have to bear a large transactional and investment cost in order to buy land and build facilities. In addition to that, the company has to compete with already established giants in the restaurant and fast food industry.

Financial analysis of the company again shows a positive NPV but far less than the other two alternatives. The same case happened with ROI of the three alternatives as ROI for this alternative will be the lowest.

Conclusion and Recommendations:

Porcini's will confront a few difficulties with this new wander and will need to dissect a few elements before making a choice in order to continue. A standout amongst the most pivotal decisions will be the area of the Pronto restaurants; since this will characterize the restaurant's target customers. The choice to manufacture Pronto in high movement areas obliges the cooking services to meet the requests of the clients by being identical through its quality sustenance and being time effective..  This will represent a test as the two are tricky to attain together without bringing about critical expenses.Porcinis Pronto Great Italian cuisine without the wait Case Solution

At the beginning, Pronto ought not to be extended excessively with a rapid pace before it could discover and create a winning technique. The initial couple of restaurants were vital and steps must be moderate. Likewise, full control ought to be acquired as it could be taken without much of a stretch to go out of the track. Additionally, the disappointment rate of franchising was really huge. Porcini's couldn't afford to have restaurants shut down as it would influence its brand name. Syndication could give Porcini's full control on restaurant operations. It would likewise be simpler to get a great area; as prime undeveloped areas were generally.................................

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