Perogies is a small family owned takeout restaurant, located right near the new IKEA. They pride themselves with the high quality and taste of the products. The wide variety of products offered in-store are mostly vegetarian and can be purchased frozen or cooked. Main competition of the store are other Eastern European stores in the Ottawa metropolitan as well as big chains like Loblaw and Metro. We believe that while Perogies is known for their high quality healthy foods and well established pricing model, they are lacking proper promotion and need an increased customer base. In order to attain the desired level of customer awareness we believe that Perogies will need to increase their online presence, by both social media and a complete redesign of their website. Moreover, flyer distribution in fitness centers, community centers and swimming pools will to further enhance Perogies as a onetime stop for proper healthy and nutritional food for people of all ages. A new sign will need to be purchased and installed, due to the need to attract IKEA customers more effectively. In long term, Pergoies will need to search for outside investment into the business and open a new location in the Chapel Hill area, as well as establish a delivery service. Strategy presented in this study is targeted on increasing brand awareness and customer base, while building on the current competitive advantages.
Situation analysis
Company Background
Perogies is a family own and operated start-up located at 1129 Baxter Road, Ottawa. Company was created back in 2008 and has been growing at a stable rate ever since. Perogies has started as a once a month volunteering job at a local church. On account of utmost commitment to exceptional quality and taste of the product, this start up has grown into a successful business. Presently, this business remains family operated, but it becomes more and more evident that it will need to acquire some workforce in near future.
Perogies is represented by a single location in Ottawa and is situated next to the newly opened IKEA store. They specialize in Ukrainian and Eastern European cuisine with wide variety of vegetarian products. Store mainly focuses on pick up type sales, but there is a table available for in store consumption. As such the majority of selection is available in frozen or pre-cooked state, in addition to heated cooked products available during lunch. Finally, business does not operate a delivery service, but some special requests are honored.
Competition
Perogies is the only store in Ottawa that specializes solely on perogies, as such they do not have any direct competitors. At the same time there is a huge number of indirect competitors represented by all Eastern European stores in town, in addition to bigger grocery stores like Loblaw and Metro. While those stores do not specialize in selling perogies, they do carry some variety of those products in many cases priced lower than Perogies. So overall, perogies market in Ottawa is quite competitive. Growing competition from other eastern European stores and supermarket selling perogies as well as growing popularity of eastern European suggests that competition will be even more fierce in the future. Perogies will have to fine better promotional strategy as well as increased production capacity to keep up with demand and competition.
Being located in a strip mall and providing pick up restaurant type services, Perogies is facing competition from the nearby located Eastern European store, Pizza place, Chinese restaurant and IKEA restaurant. Some of those places operate a delivery service and are priced substantially lower than Perogies. At the same time, none of those competitors are offering the same high quality of food and a variety of regular and vegetarian products. Therefore, there is an opportunity for Perogies to differentiate themselves from competition by enhancing and maintaining their image of healthy food destination for everyday life.
Challenges and Opportunities
Overall business performance has proven to be viable. However there is a number of points we would like to discuss in order to further analyze possibilities of growth.
Close proximity to IKEA represents a major opportunity to increase the number of customers. As it can be seen from Appendix 1 there are two ways IKEA (represented as a red circle) customers can reach the new IKEA store. The root colored in red is the historical way of getting to the store which was dictated by the previous location of the store entrance. With the new location being further to the right, IKEA customers would need to go through the entire (often congested) parking lot. This prompts many people to choose the alternative root (marked blue on the map attached), that brings them to the IKEA parking lot without the stop-and-go traffic of the parking lot. This certainly creates an advantage and opportunity for Perogies (Colored in Green) to bring some of those customers to their store. Being located in a strip mall and having a sign right at the intersection creates some visibility for Perogies, but the sign also displays name of other stores in the mall, which dilutes customer attention.
In terms of customer segmentation, nearly 90% of Perogies customers are Canadians. Although the store’s location was originally chosen to be close to Russian and Ukrainian communities and churches, it took only a few years to realize that Russian, Ukrainian and other eastern Europeans account only for 10 percent of the store’s clientele. This statistics suggest that proximity to eastern European communities doesn’t not affect overall business performance, and therefore, another store may be opened in Ottawa’s East End to cover broader geographical. Presently restricted only by one location in West End of Ottawa Perogies cannot fully explore the potential of Ottawa metropolitan area market.
Perogies is a 100% family operated business, while it allows for cost reduction, it hinders the growth of the business. Currently business is supported by the parents who have a full time commitment in the business and 4 daughters who work there outside of their university schedule. Being limited by time and resources business cannot grow until additional resources are found. It can benefit the business to have some part time staff and search for some outside investments.
Statistics data shared with us by the owners suggests that sales slow down by approximately 30% during the summer months. This significant reduction in sales calls for some strategic changes in order to bring more customers into the store as well as increasing customer loyalty.
From its inception, Perogies were employing a lot of business and marketing research in order to stay successful. Product positioning inside of the store, scent of freshly cooked meals and even the logo (designed with the use of colors that induce appetite) were used as tools to make Perogies’ customers to buy more products. Business has a good representation on face book and twitter. But our group believes that their website can be further improved to better represent today’s trends. While this website employs good presentation of the product by the use of good quality pictures, it leaves the feeling of an old, outdated website which creates negative thoughts about the store.
