CASE STUDY- 6

“SENOR SISIG: HUNGRY FOR GROWTH IN THE FOOD IN THE TRUCK INDUSTRY”

SUMMARY

Senor sisig Filipino fusion truck business in San Francisco Bay Area it was founded in the year
2010 and the company experienced a rapid growth and gain recognition for its cuisines and
uniqueness they are one multiple award 4 developing a strong customer base and people used
to wait in a long line to try their food. In 2013 the founder Evan kidera recognize the food truck
industry it was driving with 12.5% revenue growth per year the popularity of the gourmet,
budget friendly cuisines in cities like Los Angeles, Austin & Portland was driving the business
for the food truck segment however he was concerned about the potential competition from
restaurants like brick and motor which could imitate the concept of Evan.

He always thought there was an opportunity in buying a physical restaurant but the maintaining
the distinctiveness of the brand and retaining the control of the company would be difficult and
challenging. He explored various options including a restaurant and opening it and partnering
with commercial food Packers to sell their products in a retail shop. He was caution about
expanding too quickly and potentially diluting the brand to sort that he understood the factor
to consider and choosing among growth and opportunities internal changes required and they
were going to give an advantage Chauhan in the coming future.

Despite the challenge faced by operators of food truck such as regulations, increasing
competition and low profit margins he thought the industry was growing so he thought to
operate in this industry. Food trucks are popular due to their unique cuisines and exhibited
passion from the owners of the food trucks, owning a food truck is it like a venture profitability
could be made and it was a profitable business most of the truck owners could actually earn a
revenue between $250,000 and $500,000. Some of the top performing food trucks could
generate over a profit or revenue of $1,000,000.

In 2009 Evan partnered with Gil Payumo who was a chef and a long friend of Evan to start
senor sisig play distributed their work end skills, Evan was focusing on business side and Gil
was handling the kitchen and food decisions, they both owned the company with percentage
split of 70% of Evan and Gil 30% based on their capital contribution.

In 2010 they started the business after being inspired by the success of Taco truck called Kogi
in Los angles, the senor sisig was fusion concept of Filipino and Mexican food they used Gil’s
family recipe for sisig and traditional Philip parodies as the core ingredients for their menu the
goal was to introduce Filipino food to wider audience by presenting it in a familiar form like
Taco and burritos. During the early days they relied on partnership with food truck market like
off the grid service to sell their food in San Francisco. However, change in laws and regulation
like mobile food facility allowed them to apply their own permits and expand the operations
independently. The took the advantage of new opportunities and operated in profitable areas
by obtaining the permits enable to buy them a new food truck which was second in their
business and Sai growth in their business.

Their target market evolved overtime initially they focused on Filipino population but due to
their wider reach and popularity and expansion into different location increasing customer base
their target customer evolved eventually the customer base included working class individuals,
tourist, families and local residents who used to go for a walk or like to have a different type
of foods. There offering and brand image has helped them to set apart from other food trucks
in those areas. While senor sisig didn’t have any direct competitor indeed Filipino Mexican
fusion because it was a nice market but they faced high competition from other food trucks in
San Francisco and Los Angeles the main competitor was brick and mortar restaurant, Papalote
and this restaurant were testing Mexican fusion concepts in their business.

The marketing strategy of the company relied on social media platforms like Twitter Facebook
and other social sites which help them to build a brand awareness and engage with customers.
The leverage the power the social media gave them and created a full experience that the
customer would love from locating their trucks to sharing their brand story and give idea for
the menu and keep on updating them menu. In terms of operation the experience day rapid
growth in the first 3 years which as challenge them in updating then infrastructure and support
the upgoing growth. The 2 main departments of the company were kitchen and truck
department soma the kitchen was located in Daly city California and they were responsible for
the food preparation where the truck department was located in San Francisco which store the
food overnight. The main office was separated from both departments the kitchen department
at 3 full time employees sent to part time employees wild truck department at 2:00 managers 3
full time employees and 2 part time employees. The company faced shortage of employees and
was in a need of hiring more employees to meet their growing demand.

Senor Sussex marinating and preparation process was labor intensive the Man United the meat
for 48 hours in a blended soya sauce, vinegar, lemon juice and spices we added flavor to the
meet. The cook meat was and chopped with the buy table sizes and mix with more additional
seasonings as the business group the outsource the bulk production of their product us certified
food processing in packing company called Wycen foods, the outsourcing helps in reducing
the production responsibilities and ensured in consistent and quality product although they
considered purchasing a commercial marinating machine they decided against his due to the
associated costs and complexities.

Regarding the supply chain they believed in effective supply chain but the insufficiencies enter
the company’s growth the company decided centralized location everything could be located
and reduce the costs associated with the streamline operations the estimated that this location
could cost them between $300,000 and $500,000 because they are a separate location for
kitchen truck and main office. The company purchased the food trucks from AA Carter trucks
in Los Angeles they prefer this brand because they were across all the players they work and
ensuring a uniform experience for employees and customers parts and service of these trucks
were rapidly available and it was an advantage for them however the truck face mechanical
problem is required significant repairing which was the main problem.

In terms of infrastructure expansion, they are the opportunity Tulisa vacant Lord from vsn food
and create a centralized kitchen with storage parking and office and the cost app associated
with them was $5000 to $6000 monthly for 10 years, the opportunity was estimated and was
the need of loan but the progress was slow causing frustration and leading the company to
consider alternative options including securing a loan and building the kitchen themselves.

PROBLEM STATEMENTS

The main concern of the company was to expand into brick and motor restaurant along
partnering with commercial food Packers, and he was cautious about expanding too quickly
this could potentially dilute the brand name

1) Maintaining the distinctiveness of the brand since they were unique with their main menu
as Filipino Mexican fusion but there was a potential imitator of the products the 2 from a
main restaurant which wire testing their Filipino Mexican fusion foods in their physical
restaurants and this was a challenge to them to ensure the brand distinctiveness remain
intact to them.
2) They face several operational challenges due to their rapid growth, shortage in their staff
and when the company was a need of hiring a more skilled employees to meet their demand
there was no employee to be hired.
3) The infrastructure was not adequate and the cause was acquiring was too high for the
company it was estimated that monthly $5000 to $6000 was required to maintain the
kitchen which was centralized.
4) They had location separately for kitchen truck storage and main office just increase the
transportation cost and was a lack of coordination between them.

SWOT ANALYSIS

STRENGTHS

1) Unique and different type of cuisines, the company offered a distinctive Filipino Mexican
fusion cuisine that help them to set apart from their competitors
2) There is a strong brand image and gain recognition through many awards media exposure
and positive customer feedback in the social media apps
3) The main strength of the company was Evan spirit and passion for food which eventually
help them in success of growth of the business.
4) The customer base of the company was growing with positive feedback and their target
customers for working class individuals, families and tourists

WEAKNESS

1) The company added staffing storage which was reducing their accuracy meeting with a
demand and they are improper infrastructure where kitchen, food trucks and main office
was separated in different locations this under the ability of the company to meet the
demand efficiently.
2) Their main issue with the food trucks was its frequent repair impacting the reliability and
efficiency of operation.
3) The company target to rely on outsourcing and boss increasing the operations cost
4) Interfacial supply chain let them to increase the transportation cost and coordination efforts.

OPPORTUNITIES

1) The company’s opportunity of opening a physical restaurant and could attract large number
of customers and have a lawyer customer base,
2) Market growth the industry was expected to grow potentially due to their increasing
demand for budget friendly crisis in various cities.
3) The partnership with retailers and commercial food Packers could help them to sell the
product more efficiently and reach wider range of customers.
4) The company expanding into catering service could help them to tap corporate events Pvt
parties and other special occasions increase the revenue.

THREATS

1) Increasing competition from other physical restaurants and food truck competitors, there
were other substitutes for their product and new entrance post a serious challenge for Senor
sisig concept.
2) Any change in the customer preference or trend can impact the business and demand for
their product.
3) Regulatory challenges like municipal regulation and safety measures can increase the
operational cost for the food truck industry.
4) Any economic downturn like inflation and recession can reduce the people spendings and
increase the purchasing cost for materials required for food preparation.

SOLUTION

Based on the spot analysis the company as some solution which can address to strengthen the
strength and strengthen their weakness and grab the opportunities by reducing the problems
and challenges caused by threats.

OPERATIONAL EFFICIENCY

Hiring employees and investing in training program and teach them cross training and enhance
their skills for a smooth operation. Considering buying a technological solution to maintain
their inventory management and point of sale system to streamline their process and increase
efficiency. They could explorer centralized option by acquiring a centralized kitchen facility
which could reduce the cost

FOOD TRUCK UPGRADES

Replacing the aging food trucks with a newer model could reduce the repair time and improve
the reliability. They should diversify the fleet with different foot trucks and should hire from a
different vendor and cater to different location. They should have a regular maintenance and
service of food truck to prevent mechanical problem.

BRICK AND MORTAR EXPANSION

They could have a physical restaurant in different locations to meet the market demand by
analyzing the cost associated with them, and having a partnership or joint venture with
established restaurant or hiring chefs us expertise in different process this could leverage their
problem and minimize the risk of losing the distinctiveness of the brand.

ALTERNATIVE SOLUTION

Collaborating with a retail food Packers and distribute their products to different retail shops
increasing the band exploring this should try catering service to tap into different corporate
events and private parties, they should strengthen their social media marketing strategy and try
to engage with their customers and promote no offering and build royalty They could explorer
centralized option by acquiring a centralized kitchen facility which could reduce the cost.
Replacing the aging food trucks with a newer model could reduce the repair time and improve
the reliability. They should diversify the fleet with different foot trucks and should hire from a
different vendor and cater to different location. They should have a regular maintenance and
service of food truck to prevent mechanical problem.

RECOMMENDATION

Based on the general trends in the industry and the strengthen of the business some of the
recommendations that could be made are,

Adding more food trucks which could reach the different locations and target a broader
customer base, sister business is growing as well as the industry adding more tracks could help
them in capturing the opportunity of growing demand but the problem is the increasing overall
operation cost and could reduce the profit. The company could open physical restaurant, or
have a centralized main office which food control kitchen transportation from a single place
instead of having a separate location for them. Collaborating with a retail food Packers and
distribute their products to different retail shops increasing the band exploring this should try
catering service to tap into different corporate events and private parties.

CASE QUESTIONS

1 The 3 opportunities the Evan kidera should pursue based on the growing opportunity
various factors that requires careful evaluation and demand in the market are,
1) Opening a physical restaurant which allows attract wider customer and give a dine in
experience and could help in potential expansion in different locations however it requires
I initial investment and increasing operational cost.
2) Partnering with commercial food Packers and retail distributions could help them to enter
in the retail industry and make their product accessible to wider audience.
3) expanding of food Truck business since they have a strong presence in this industry, they
could explain new location and different type of cuisines to attract wider range of
customers.

2 The factors should be considered while choosing the above 3 opportunities are
1) Financial feasibility, investment ratio such as debt equity ratio.
2) Competition in the market
3) Brand image and differentiation of their product
4) Market demand
5) Risk associated with the expansion or partnering.

3 The internal changes data required to be addressed to take advantage in the growing
opportunity some of the internal changes that required are,
1) Talent management additional hiring of employees including skill chef, managers and
support staff.
2) Supply chain logistic since they supply chain is not efficient due to their cost associated
with transportation and having a separate location for different operations could affect the
coordination with them.
3) Marketing and branding should focus on building a brand awareness and axis different
platforms and channels de invest in social media apps but they could use other marketing
campaigns our TV commercials to attract customers.
4) Financial management should be done based on the forecasting and budgeting process to
ensure the support the path the company is going to choose. Because if the financial
management is not done correctly it could reduce the profitability and the future cash inflow
to the company.