Abou Shakra Restaurant: Creating Customer D Company Case Value The Old-Fashioned Way Abou Shakra is a chain of restaurants in Egypt well known for Abou Shakra owns its own factory, which supplies all branches charcoal cooking-grilled meat, kebabs, and kofta. In 1947 and outlets with their daily requirements of fresh meat and poultry. Ahmed Abou Shakra opened his first Abou Shakra restaurant in The meat is of high quality-only the best beef and lamb. Meat El Kasr El Einy, a famous central district in Cairo. The first restau is delivered to the factory daily, and a governmental veterinary rant was not in a consumer-attractive neighborhood, but that did inspection is performed to ensure that the meat is fresh and of not stop Abou Shakra, who believed that offering healthy, tasty. good quality. The factory is equipped with the latest technology and well-marinated food was more important than location in at to guarantee that the meat is stored at the correct temperature to tracting customers and having them return time and again if ensure its freshness. they received a good meal, the location of the restaurant would The fruits and vegetables are also delivered daily and are not have much bearing on their future dining decisions. specially stored to maintain freshness up to the time of serving. Initially the restaurant's menu was very simple, it mainly con Abou Shakra's quality control department ensures that all finished sisted of basic traditional Egyptian dishes, which was the stan products are of outstanding quality, and oversees practices that dard menu offered in similar establishments at the time. Abou prevent any of the ingredients from being contaminated. The Shakra decided to keep his menu simple and traditional to avoid company has signed a contract with SGS Egypt to supervise its the risks associated with offering unfamiliar dishes to consumers. health, safety, and hygiene practices, ensuring that they are of the As a result, he focused on providing well-known traditional dishes highest standard. of exceptional quality. The Abou Shakra menu has changed very little over the past 60 years, maintaining the simple offering of traditional Egyptian Successing in a Competitive Market dishes with a particular focus on grilled dishes, which is now When the first Abou Shakra restaurant was established, there was Abou Shakra's speciality. not a wide variety of cuisines featured at restaurants, such as Indian, The primary aim of Abou Shakra is to keep the menu simple so Chinese, and Italian, which are widely available today. As noted, as to wholly master the dishes offered. This has encouraged cus- Abou Shakra's competitors at the time also offered traditional oriental tomer loyalty, as customers often choose their favorite dishes for Egyptian food, and due to the lack of other cuisines, he was essen which they have come especially for. This has led to Abou Shakra tially competing with the whole market. It was thus very challenging being one of the most popular places for oriental food in Egypt. to start up a business in this highly competitive market, and it was Keeping the menu simple also limits the costs of purchasing necessary for Abou Shakra to ensure that he could offer something different ingredients from several suppliers. If this was not the that would give him an advantage over his competitors. This ad case, the recruitment of more managers would be required to vantage turned out to be the great customer value offered by Abou contact the suppliers and follow up on the orders. There would Shakra, which was not offered by the majority of his competitors. also be more supervisors nooded to ensure that the delivery and The Abou Shakra restaurants have maintained the persistent storage processes take place smoothly and that each outlet re- focus on customer well-being and satisfaction that originally gave ceives its supplies on time. In addition, more chels who are spe- them an advantage over their competitors, and this is one of the cialized in the new dishes added to the menu would be necessary reasons for their success. The importance that the company places as well. on elegant dishes, prepared with passion, and providing a memo Abou Shakra's managers pay attention to every small detail; rable experience to their guests had endured right from the Abou they ensure that each restaurant is spotless and that the kitchen Shakra's establishment. Since it was established, Abou Shakra res is held to the highest cleanliness standards. All utensils and cut- taurants have been following that philosophy, and this is another lery go through a sterilization process to ensure their sanitation reason for their success. We will now take a closer look at how and safety. The tables are wiped with a special detergent so that Abou Shakra applies this philosophy and offers customer value. customers feel they are eating in a hygienic environment. 56 Part 1 Defining Marketing and the Marketing Process Focusing on Customer Service Abou Shakra restaurants do not rely solely on their food to please their customers, but also on well-trained employees who deliver extraordinary customer service. They hire energetic, friendly, and passionate employees. Abou Shakra restaurants realized the significance of educating their workers as to the importance of customer satisfaction, and this led to the establishment of their own training center. The center has a proficient team of trainers who ensure that employees will have the necessary skills so that guests will be provided with the best service. Abou Shakra relies on continuous training to provide employees with the necessary confidence and skills to provide the utmost customer satisfaction. The company believes that its greatest asset is its employees, and Abou Shakra thus invests heavily in appropriately recruiting and training them in order to maintain the company's standards in the competitive market. One of the core principles of the company is that by taking good care of the employees, the employees will take good care of the customers. tool. They will tell their friends and family about their positive experiences at Abou Shakra, and consumers are more likely to follow the advice of people close to them than promotional ads. This is also a strategy the company uses to reduce expenses, as instead of spending a large amount of money on advertising. which may not generate profitable returns, that money is instead spent on increasing the quality of the food and service provided. Many have questioned whether or not Abou Shakra's 65-year legacy can be sustained. Its restaurants are run by co-founders and owners Ahmed and Hussein Abou Shakra, who have drawn up an efficient blueprint for all of their employees to follow. They believe that if desirable employees are recruited and trained cor- rectly and provided with the appropriate working environment, then the success of the business is inevitable. Ahmed Abou Shakra, the company's chairman, played a criti- cal role in the formation of the strategy that the company would follow. He detailed the long- and short-term goals in a manner that is easy for all involved to comprehend. The daily operations are organized and controlled by him, and he has developed an efficient system to ensure that managers report to him. This sys- tem was developed when the business began to grow, as one person could not manage the daily operations of every restaurant efficiently Hussein Abou Shakra is the vice chairman of the company. and he ensures that the financial goals and objectives of the com- pany are being met. He supervises the preparation of the financial statements and the budgets of the company. In the same manner as the chairman, he has set up a structure by which all the finance managers report to him with daily updates. The legacy of Abou Shakra is expected to continue with or without its founders. This is because Abou Shakra has become a corporation that was established with strategies and objectives that, if managed correctly, will lead to a successful business. This business legacy is much bigger than its founders, and so long as the business objectives are being met and the customers con- tinue to be placed first, it is expected to last. International Expansion Abou Shakra's solid customer base is not only due to the quality of the food and the service offered, but also to its slow-growth expansion strategy. Abou Shakra restaurants cannot be found on every corner; after 65 years, only 12 outlets are operating throughout Egypt. Abou Shakra decided to stay small and focus on having a few outlets that provide outstanding service rather than have many outlets with average service. A new outlet is only opened when the required employees have been trained and are prepared to offer the outstanding service that is associated with Abou Shakra. It took the company 56 years to open its first branch outside Cairo, which debuted in Alexandria in 2003. The popularity of Abou Shakra has extended far beyond Egypt, with the company receiving many requests to open international branches from customers living abroad who had tasted Abou Shakra while on holiday. The opening of a branch in Saudi Arabia in 2005 and another in Kuwait in 2007 are great milestones in the history of Abou Shakra. This expansion was not an easy step for the company, and a great deal of research was undertaken beforehand to find the cor- rect locations for the restaurants. First, Abou Shakra needed to find suppliers who could deliver fresh ingredients on a daily basis; this was an important factor, because for Abou Shakra to suc- ceed, it had to be ensured that the quality of food provided in any new outlets would equal that of the Egyptian branches. Employ- ees also needed to be recruited and trained in the same manner as the employees in Egypt, to make sure that they provide their customers with the same outstanding service. Along with other aspects of its simple but focused strategy. Abou Shakra does not spend a great deal on advertising. Only a small proportion of its budget is set aside for advertising in newspapers and on television, as the company relies heavily on word-of-mouth recommendations between customers and their friends and families. Abou Shakra believes that the main objec- tive is to take care of customers, and that to provide them with high-quality food and service is better than spending money on advertising, as satisfied customers will be the best advertising Questions for Discussion 1. Describe Abou Shakra in terms of the value it provides for customers. 2. Do you think Abou Shakra should develop a high-growth strategy? Why or why not? 3. Should Abou Shakra spend more on advertising than is cur- rently expended? 4. Do you think that the legacy of Abou Shakra will continue, with consumer tastes changing and moving toward nontraditional cuisine? Why or why not? 5. Suggest other methods by which Abou Shakra can provide value to its customers, Sources: "Abou Shakra, Cairo-Restaurant Review, Reviews of Hotels Flights and Vacation Rentals, Trio Advisor, www.tripadvisor.com/Restau- rant_Review-g294201-d1201482-Reviews-Abou_Shakra-Cairo.html, ac- cessed November 5, 2012; and "Abou Shakra," www.aboushakra.net main.htm, accessed November 5, 2012