Panntea Business Analysis Essay

In the past few years, Canada and the world have been affected by the Coronavirus pandemic in nearly every aspect of daily life. Given the uncertain economy, many businesses were forced to modify their business models to adapt to the hostile environment. Such a state of affairs made me wonder if there could be ways to help the affected local businesses. Even though my desire to assist them was genuine, I still had a lot of hesitations since it was a challenging task and failure would adversely affect the business. During my deliberation, I came across Richard Farson and Ralph Keyes' article, "The Failure-Tolerant Leader". Having read their article, I was enlightened by how I ought to move beyond success and failure, and follow my intuition to help local restaurants survive and thrive in difficult times.

Panntea: a bubble tea restaurant that nearly went bankrupt

Panntea, a bubble tea restaurant, suffered substantial losses in 2020 following the onset of the pandemic. Furthermore, a competitor entered their plaza at the beginning of 2021, causing revenue to decline by 80%. While they were on the verge of giving up, I offered to help them turn the business around.

During the process of developing a strategic plan, I spoke with the owner about their current position, market environment, and other factors that might impact their operation. I also explained to him the importance of having a differentiator, especially when they're in a low foot traffic area and a competitor is moving in. Consequently, we established three measurable goals for finance, marketing, and innovation to improve productivity and success of their business.

Marketing goal: to raise brand awareness

With a traditional mindset, Panntea struggled to recognize the value of marketing. I explained patiently to the owner how an effective advertising channel would help them raise brand awareness and increase their market share. Moreover, I have a strong social media network through which I can recruit influencers to help promote Panntea with little remuneration. This would alleviate some of the financial stress from the marketing campaign. Having cleared their concerns, they agreed to give it a shot and we recruited 15 quality influencers to help build the brand. The marketing campaign was a great success, and reached over 130,000 audiences in Canada. This resulted in a 200% growth in Panntea's customer base.

Financial Goal: improve financial performance through cost management

As I carefully examined Panntea's financial statement, I noticed a drastic increase in inventory costs. I learned from the owner that shipping costs have nearly tripled due to disruptions in the supply chain. To mitigate financial risk, I suggested they simplify the menu, which would lower inventory costs. Initially, the owner was reluctant about the changes as he deemed diversity essential and believed the change would upset customers. After discussing the pros and cons of a slimmer menu, we finally agreed that the benefits outweighed the cost. Having a slimmer menu and optimising costs had allowed them to focus on the profitability of the units, not just revenue. The change has led to a 6% increase in profit for the fiscal year.

Innovation Goal: create products that are unique and authentic to Panntea

Customers tend to focus only on prices when every bubble tea shop offers similar products. Many bubble tea chains had failed to recognize the importance of innovation, and were steadily losing their market share in the bubble tea space. For Panntea to stay competitive and meet customers' expectations, I suggested they innovate and develop unique items not offered by their competitors. By offering innovative products, Panntea was able to differentiate itself from price competition, develop customer loyalty, and better connect with the target audience. After much encouragement, Panntea managed to develop 3 innovative items including White Rabbit Milk Tea, Durian Soft-Serve, and Ramen Pudding. Panntea’s innovative products were subsequently featured by four of Toronto’s most influential Instagram accounts, reaching over a million views. Over time, they have built a solid reputation as being unique, trendy, and authentic. This has also served as a stepping stone to their later success.