Haidilao Holdings Analysis Paper Example

Introduction

Haidilao is a Beijing based Chinese cuisine restaurant brand. It is one of the globally leading and fastest growing Chinese cuisine brand in the world. The restaurant focuses on hot pot dishes. The brand is a phenomenon in China and the rest of the world offering an unparalleled level of service and dining experience in all its outlets. The company was founded in 1994 by the CEO Zhang Yong in Sichuan Province China. The company name literally means "fortune" which was used to indicate the transformation of a small shop selling malatang to the multinational company it is today.

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Most of the restaurant's outlets are in its domestic market of China. However, the company operates other locations in Hong-Kong, Taiwan, Japan, Singapore, and South Korea. In 2013, Haidilao opened the first ever US outlet in Westfield Santa Anita, California. Currently, Haidilao is a privately-held company. It aims at changing this status to become a Public Listed Company as it filed to launch an IPO in Hong Kong this year. The company seeks to raise US$700 million to expand further in the North American market including Canada.

Business Model

Haidilao generates revenue from its restaurant operations by selling it hot pot dishes. On average, 98 percent of total revenues each year come from restaurant operations. Like many other companies in the restaurant industry, Haidilao also rolled a delivery business model which generates around 1.5 percent of its total revenue each year. The remaining percentage of revenue is earned from sales of condiment products and food ingredients. The delivery Business operations by the company were launched in 2010 making it the first hot pot restaurant brand to do deliveries.

Competitive Strategies

Haidilao is the leading company in a hot pot restaurant in the world. To achieve this position, the company has used various competitive strategies along the way. For instance, Haidilao always ensures that it sets the trends for the competitors as seen when it was the first hot pot restaurant to have delivery services. The dining experience at Haidilao continues to differentiate the company from others in the industry because of its high level of personalization, incentivization of the staff, and use of technology to continually improve the guest experience.

Uncompromised commitment to food quality and safety is another strategy used by Haidilao to attain competitive advantage. As a result, the company is a supplier to some of the competitors as it supplies them with food ingredients. Haidilao has industry-leading operational and financial performance. Innovativeness of the Founders, restaurant managers, and their staff is the reason for the remarkable operational and financial performance. Finally, the company ensures that it has the best talent to complement the visionary Founders.

Business Strategy

Haidilao's business strategy contains several key areas. First, the company seeks to strategically expand its restaurant network by opening new locations, especially in North America. This move will tap into new markets that are yet to have hot pot restaurants. Secondly, it aims to improve the dining experience of the already existing outlets continually. To achieve this, the company evaluates its restaurant managers through guest satisfaction and encouraging the staff to execute their ideas on how to satisfy the guests. Another strategy which is aligned with the improvement of the dining experience is increasing same-store sales. Additionally, the company continues to develop new sources of revenue. The latest source was the sales of food condiments and ingredients.