Business Idea Assignment On AI Based Restaurant
Task: You are required to prepare a business idea assignment discussing about implementing AI technology in restaurant?
Market problem that needs to be solved
According to the study ofNguyen,Nisar, Knox&Prabhakar(2018) considered in the business idea assignment, Restaurant industry is an industry where profits margins are slim and running a restaurant can sometimes feel like a fight for survival. Today, artificial intelligence is employed all across the industry to provide convenience and better experience to customers. Restaurant and fast-food business owners are heavily investing in automation and artificial intelligence technologies to become forward-thinking quick service restaurant. Nevertheless, restaurant industry also is not free of market problems. One of the identified problems is to solve the employment problems in quick-serve restaurants (Barrows, Vieira Jr & DiPietro, 2016). The difficulty of keeping employees employed has become a dire issue resulting in high employee turnover and bad customer service. With the introduction of AI-based solutions like robotics, restaurant businesses are using them from delivering food, food manufacturing process to even cooking. Although it saves money in the long run, employees perceive this as a threat to their jobs. Since staffing is one of the major issues, AI can help to help boost the business growth and profitability. Restaurants require people who can multitask, but this can be resolved by incorporating artificial intelligence such as with the use of AI-based assistant in the front desk and customer interaction related work. The primary motive of incorporating these ideas is to cut down the cost of skilled labor and reduce the non-productivity at work (Berezina, Ciftci&Cobanoglu,2019). However, AI can also help to retain such employees by educating them about digital customer service, use of technology to take orders, and serve customers in a better way.
Customer benefits to be generated by the idea
Digital tools are streamlining every aspect of the restaurant business starting from ordering food, delivery, staffing, and inventory management and simplifying work at all levels (Degtyaryova, Shcherbakova&Katerinich,2020). AI-based restaurant business has the potential to serve better to its customers. This business model will not only help to curb the issue of employee retention but also improve customer satisfaction. Today, restaurants are more concerned with their restaurant’s traffic and guest experience. There is no time to worry about inventory counts, making schedules and look at front desk operations. If back-end operations are managed using restaurant automation, it can ensure more time for employees to focus on serving their guests. Digital customer service assistants like voice ordering systems will help employees to take speedy and accurate orders allowing less wait time for customers. The use of cloud-based systems can allow employees to swap their shifts, manage their shifts and reduce time wastage resulting in satisfied employees and customers. The use of POS system can help restaurant owners to get real time information on inventory and purchasing capabilities. This helps employees to ensure right supply levels and remove unnecessary tasks.
Proposed business model
The proposed business model canvas for this AI-based restaurant is provided below within this business idea assignment.
- Key partners- The most important partners will be restaurant consultants, food suppliers, restaurant investors, restaurant designers, lawyers, food bloggers, notable chefs, AI-support consultants, and companies.
- Key revenue – Selling meal kit as well as branded merchandise will act as a key revenue.
- Key activities- The AI-based restaurant will serve as full-service restaurant, provide training resources on use of AI for employees, incorporate use of voice-controlled ordering systems and staff management.
- Key resources- The use of POS systems, cloud-based systems to manage staffing, skilled employees having basing knowledge on using computerized systems, brand, and equipment lease line.
- Value Proposition- The value to customers will be providing them with high quality restaurant experience, allow feedback platforms. The value to investors will be provided by way of highlighting the benefits of advanced AI systems that have higher likelihood of success.
- Customer Relationship- Co-creation of new AI-based restaurant, dedicated personal assistant, ability to co-create new and better restaurant concepts.
- Channels- Channel partners like food blogs, newspapers, magazines, social media platforms.
- Customer segments- Market vendors who wish to transform into AI-based concepts, entrepreneurs, culinary school graduates, customers ordering at drive-thru and picking up at kiosks.
- Cost Structure- POS system fees, employee salaries, rent, vendor expenses, marketing fees.
Key interrelationships in the BM to support the success of the idea
The use of the business model canvas allows a business to forecast its future possibilities and learn about the prevailing competition (Joyce & Paquin, 2016). This will help the AI-based restaurant to map the competitors and their business models. A clear picture of what customers expect, and need is identified in this business idea assignment. This business model will also help uncover information about how other businesses have created a position in the restaurant industry. The key partners for the business will help to generate profits out of the business. The key activities will allow restaurant owners to manage their staff better by training them on using AI-based systems. The value proposed will allow the business to attract the attention of investors. The channel partners will help to communicate the services to the world at large and manage the staff efficiently. The targeted customer segments will help understand the needs of the new customers.
What are the critical success factors discussed identified in this business idea assignment?
The right use of technology can either make a restaurant business successful or become a reason for its failure. The use of critical success factors is not a new idea as it is a way to improve restaurant operations. The critical success factors for any restaurant business are its core competencies, economic climate, competitors, and present market conditions which directly influence the likelihood of success of the business. In this case, the critical success factors for this AI-based restaurant business can be staff training, staff recruitment and selection, maintaining hygiene and cleanliness, customer feedback, staff empowerment, loyal local patrons, effective communication, use of AI-based systems, cloud-based systems, maintaining managerial flexibility, following industry trends and generous food portion size. Today, over 90% of the restaurant owners have agreed to improve their restaurant operations through the implementation of technology. This is an important critical success factor as no business can remain technophobe in this era. The critical success factors also include enhancement of customer experience as the tasks are managed with the use of technology. When employees are well-trained and aware of the latest technologies used in the restaurant business such as payment systems, guest feedback portals, voice-controlled ordering systems and use of robots to serve at front-desks, they tend to serve better to the customers. The use of artificial intelligence will allow making fewer manual errors in the system thereby reducing the chances of miscommunication and dissatisfied customer.
Critical risks and assumptions
While starting a new business, the element of risk always needs to measure. There are plenty of risk factors and solutions available to protect from the risks (Park, 2017). The primary concern for any new business is to protect its operations from cyber-attacks, phishing, and other AI related risks. This is a serious matter of concern for any restaurant business allowing them to take significant measures to protect themselves better. The risk of inadequate marketing is a critical risk factor as promotional efforts are required for any business. As there are numerous competitors, the risk of losing the grip from the market can be easy. However, effective promotional campaigns and marketing the AI capabilities can help to reduce the risk of losing the business standing. The risk of cyber security is high which is often overlooked by business owners. The risk is high in terms of inconvenience caused to the restaurant owners. The computer systems need to be more secured, the payment gateways will require additional security, and online transactions will require better management.
Overall feasibility of the idea
The overall feasibility of the idea presented in the segments of business idea assignmentcan be understood from the advancements in the restaurant industry. The use of digital tools and cloud-based systems are among the most useful tools that may contribute to the success of the AI-based restaurant. However, to address the abovementioned issue of retaining employees, the idea will be to educate and train them to accurately use the online systems. Voice assistant enabled ordering system can be applied in the restaurants, which can also be installed in drive-thru restaurants and kiosks. A voice assistant technology can take orders from customers and since it will be a voice assistant ordering system, it will learn and continually improve. The idea will be feasible as better scheduling capabilities will be essential to create and communicate work schedules in advance to employees. The use of AI will allow restaurant owners to forecast labor demand, allow managing shift hours of employees and handle on-call shifts. Artificial Intelligence will also help to provide real time information and receive customer feedback to incorporate any new ideas. This will also eliminate guesswork and reduce any manual errors that require immediate attention.
Barrows, C. W., Vieira Jr, E. T., & DiPietro, R. B. (2016). Increasing the effectiveness of benchmarking in the restaurant industry. International Journal of Process Management and Benchmarking, 6(1), 79-111.
Berezina, K., Ciftci, O., &Cobanoglu, C. (2019). Robots, artificial intelligence, and service automation in restaurants. In Robots, Artificial Intelligence, and Service Automation in Travel, Tourism and Hospitality. Emerald Publishing Limited.
Degtyaryova, T. V., Shcherbakova, N. V., &Katerinich, O. A. (2020). Loyalty Management as the Basis for Ensuring the Competitiveness of the Restaurant Business.Business idea assignmentIn Growth Poles of the Global Economy: Emergence, Changes and Future Perspectives (pp. 985-991). Springer, Cham. Joyce, A., & Paquin, R. L. (2016). The triple layered business model canvas: A tool to design more sustainable business models. Journal of cleaner production, 135, 1474-1486.
Nguyen, Q., Nisar, T. M., Knox, D., & Prabhakar, G. P. (2018). Understanding customer satisfaction in the UK quick service restaurant industry. British Food Journal.
Park, A. (2017). The motivations and the risks of real estate strategies of firms in the restaurant industry. The Business & Management Review, 9(1), 19. ?
The most important partners will be restaurant consultants, food suppliers, restaurant investors, restaurant designers, lawyers, food bloggers, notable chefs, AI-support consultants, and companies.
The AI-based restaurant will serve as full-service restaurant, provide training resources on use of AI for employees, incorporate use of voice-controlled ordering systems and staff management.
The value to customers will be providing them with high quality restaurant experience, allow feedback platforms.
The value to investors will be provided by way of highlighting the benefits of advanced AI systems that have higher likelihood of success.
Co-creation of new AI-based restaurant, dedicated personal assistant, ability to co-create new and better restaurant concepts.
Market vendors who wish to transform into AI-based concepts, entrepreneurs, culinary school graduates, customers ordering at drive-thru and picking up at kiosks.
The use of POS systems, cloud-based systems to manage staffing, skilled employees having basing knowledge on using computerized systems, brand, and equipment lease line.
Channel partners like food blogs, newspapers, magazines, social media platforms.
POS system fees, employee salaries, rent, vendor expenses, marketing fees.
Selling meal kit as well as branded merchandise will act as a key revenue.