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Romacoral Foods

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RomaCorral Foods Ltd. (RCFL) - Strategic and Operational Recommendations

To: Senior Management Team at RCFL

From: Alicia King, CMA

Date: August 1, 2012

Executive Summary

The purpose of this report to is address strategic and operational issues currently experienced by RCFL in order to achieve target of 5% growth in net profit margin as well as a dividend payout of $2 per share. The report includes a current situational assessment, quantitative and qualitative analysis of the strategic alternatives as well as recommendations on best course of actions. An implementation plan is also provided to guide RCFL for their next steps.

Strategic alternatives considered are the expansion of Roma/Corral resturants, investing in a coffee shop chain and outsourcing bread products. It is recommended that RCFL pursues the launch of coffee shops as it provides more than 10% return on investment and allows RCFL net profit margin to grow by 5% for the next two years. Operational issues such as ethical and internal control issues are looked into for the best interests of RCFL. For instance, selection of contractors should be based on best quotes. RCFL will also attempt to improve their consistency in customer service as well as have higher retention rate for their high quality servers.

With the introduction of 30 Roco coffee shops in Canada, RCFL will be well-positioned to mitigate risks of the current economic downturn. It will be diversifying in the market that is relatively unaffected by the downtown and at the same time growing its net profit margin. By outsourcing its bread products, RCFL will be making better use of their resources and as well avoid the high investment cost and risk of opening further restaurants. In addition, this will allow a continued dividend payout of $2 per share, thus satisfying the board's requirement and providing a good return

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