Name: Thomas Anderson
Title: Head of Research and Planning Department
Company: Diner Obese, Inc.
Address: 311 South Chestnut Drive, Silverton, OR 97381
The purpose of this report is to examine possible business threats and benefits that Diner Obese, Inc. may encounter in the case of its business expansion and opening of a new restaurant in the nearby town of Eddyville, 10 miles from headquarters. The necessity of business expansion was dictated by the realization of the company’s strategic goal, which is creating a fast-food restaurant chain statewide. In order to contribute to the decision-making process, the research team has analyzed possible risks of starting an establishment in Eddyville, together with expected profits.
- The town of Eddyville is among the smallest settlements in Oregon state. Its population is 965 townsmen, most of which are employed in agriculture and foresting (23% of males), and informational services (11% of females).
- Average household size is 2.5 people; percentage of family households is 57.1%.
- Average household income per year is about $42,140 (in 2009).
- Residents with incomes lower than the poverty level were 17% in 2009; residents with an income below 50% of the poverty level were 12.2% in 2009.
- The number of grocery stores is 21; the number of full-service restaurants is 111.
- Only about 20% of the population have a B.A. or higher; 83.6% of the population have a high school education or higher.
Eddyville, Oregon, is a small town with a population less than 1000 people. The fast-food industry is undeveloped, but a significant amount of full-service restaurants and grocery stores satisfy the needs of local population. No or low competition is expected in case of establishing a fast-food restaurant in the region, and the company can receive benefits due to being a pioneer in this market sector in Eddyville. However, threats that the business will encounter, such as unprofitability, lack of demand, low level of awareness, and the loyalty of local population to already existing places of public catering seem to outweigh benefits.
Risks posed by establishing one of the Diner Obese, Inc. restaurants in Eddyville, Oregon, seem to overlap the expected benefits. Therefore, Eddyville is not recommended as a place for Diner Obese, Inc. to create business expansion.
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