Strategic Management
Introduction
Zorba’s is a restaurant in Corfu, one of the Greek islands. It’s owned and managed by the
owners, Derek Jones, originally from England and his wife Greek wife Maria. The restaurant
serves Greek and British food. For the last six years the profits have taken a decreasing trend.
Zorba’s Performance for the last Six years. (Profits-€)
2005200620072008200920102011201220132014
-1000
-500
0
500
1000
1500
2000
2500
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The misfortunes of Zorba’s restaurant stem from harsh economic conditions facing the Greek
economy. The inflation levels have been rising and the unemployment rates have sored very
high. The number of tourists who have been visiting the small Greek island have reduced and the
income levels for the local citizens have also dropped. The management of Zorba’s restaurant
cannot be exempted from blame.
The management of the operations of the hotel is inadequate and the decisions of most critical
operations are done arbitrarily and without any consultations. The breaking of plates during the
Greek national festivities is old fashioned and unprofitable besides it creates an atmosphere of
violence and inconveniences other clients who would like a peaceful environment.
The management of Zorba’s restaurant needs to restrategize and include professionals in
its top management positions. The old systems of management by the threatening workers are no
longer applicable in modern management styles as motivation and creation of incentives for
workers to improve their general performance is the order of the day. Maria and her husband
Derek needs to hire a professional manager to supervise the restaurants and also to provide
leadership in its current financial crisis. (Holloway, 2004)
Derek and Maria also need to hire an auditor to carry out an audit of all its operations
and financial records in order to report the true position of the restaurant. These will make it
possible for the owners to handover the properties to a new manager and with all its assets and
financial position recorded in the books. (Kaplan and Bruns, 1987)
The trend portrayed by the profits of Zorba’s, is highly discouraging and it may lead to the
closure of the business. The chances of closing down the restaurant are very high if the
management of Derek and Maria continue to operate and manage the restaurant in the same way.
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Zorba’s restaurant has been operating in the same manner ever since it was launched. The food
they serve is and has been the same ever since it commenced trading and the menus never
change. The emergence of other new and very competitive restaurants in the locality has led to a
lot of pressure for Zorbas to change or perish.
The problem of staff turnover is also another big issue that needs to be tackled. This is as a result
of mismanagement. Poor treatment of staff and lack of motivation normally leads to high staff
turnovers. Because of high staff turnover, Maria has been overworking at the restaurant which
has resulted in erratic business decisions which are mostly out of frustration and stress instead of
pure competency when making them. To improve sales and the reputation of the restaurant:
Zorba’s requires some kind of advertising, and it’s essential that whether yellow pages are used
or bill boards, the most important and basic requirement is the strategic thinking, the references
behind the advertising and the needs of the targeted audience. Informative advertising is an
approach that builds and creates the initial demand for the product or service during the
introductory process of the life cycle of the product. (Blythe, 2008) Persuasive advertising is
used in the later stages of the product to improve its competitiveness among its competitors.
Other forms of advertising that can be used are comparative advertising and reminder oriented.
For instance the adverts of the restaurants are often comparable due to the nature of their
industry. The efficiency of the product positioning is very critical to the success of the
promotional strategy. (Smith & Taylor, 2004)
Positioning involves the development of brands as the images of Zorba’s products or services.
The combination of all the required elements of marketing mix is needed to achieve the required
strategy. Positioning explains the uniqueness of the services in the market place and also its
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advantages against the other restaurants in Corfu in the Greek island. Branding is a tool that is
often utilized to position the product by designing its image and the presentation of the
uniqueness of the services being offered and the price they are willingly or a ready to pay for the
product. Brand equity occurs where customers are willing to pay much more for a product
because of its position. (Kotler, Keller, Brady, Goodman & Hansen, 2012)
Promotional strategy is a function that involves informing, persuading or influencing the
decisions of the customer. Its major objective is to develop and promote a products primary
demand. Different companies have varied promotional strategies. Some use these strategies to
expand in their different markets while others use them to reach selected and particular markets.
Most promotional strategies goals are to provide the basic necessary information about the
product and to differentiate in order to increase its sales, its value and to stabilize its overall
market. (Kotler & Armstrong, 2010)
To provide the basic information of the existence and expansion the Zorba’s, the
company must come up with a marketing communication strategy that will involve making key
decisions about who the customer is, how they will be contacted and what kind of message
should be conveyed. For instance, Zorba’s should target different distinct groups depending on
the message and taste of the potential customers. (Wood, 2003)
This process, known as market segmentation divides the market into groups which are
very distinct from each other. In one of the messages, Zorba’s should target the working class
with such messages referring to good life, endless entertainment, security and secure parking and
good music. While in other messages it would target parties or other ceremonies involving the
Strategic Management 5
general public. The other messages should target the tourists and other foreigners. (Pfister,
Robert, Tierney & Patrick, 2009)
The importance of market segmentation is that it increases the efficiency in marketing
operations by narrowing the market specifically toward a designated and defined segment in a
way that is consistent with the characteristics of the segment. Market segmentation leads to
product differentiation from each segment while tangibly or intangibly differentiating it from the
rival products from the competitors.
To conclude, for Zorba’s restaurant to popularize itself, it can announce free entry to an
organized event or to a particular entertainment spot by bringing tokens or certain identifiers that
can promote particular cocktails by offering free drinks to certain clients at the restaurant. These
will motivate other patrons to start visiting the restaurant once more. The management of Derek
and Maria also need to change hands to allow for other young and professional managers to take
over.
Strategic Management 6
References
Blythe, J. (2008) Essentials of Marketing. 4th edition. Essex: Pearson Education Limited.
Holloway, J. C. (2004) Marketing for Tourism. 4th edition. Essex: Pearson Education Limited.
Kotler, P. & Armstrong, G. (2010) Principles of Marketing. 13th edition. London: Pearson Education
Ltd.
Kaplan, R. S. and Bruns (1987) Accounting and Management: A Field Study Perspective
Harvard Business School Press.
Kotler, P., Keller, K. L., Brady, M., Goodman, M. & Hansen, T. (2012) Marketing Management. 2nd
edition. Essex: Pearson Education Limited.
Smith, P.R. & Taylor, J. (2004) Marketing communications. An integrated approach. 4th edition.
London: Kogan Page Limited.
Pfister, Robert E., Tierney & Patrick T. (2009) Recreation, Event and Tourism Businesses. Human
Kinetics
Wood, M. (2003) The Marketing Plan: A Handbook. New Jersey: Pearson Education Inc.
