10 Analyse the potential risk of a restaurant trying to increase its profit by using cheaper ingredients

[Sir Afzal Shad]

10 Analyse the potential risk of a restaurant trying to increase its profit by using cheaper ingredients [3]

[Shaliza khawaja]

using cheaper ingredients might increase profit in the shot run but your quality falls
for example resturant might use frozen meat instead of freshly cut meat
this would make the business lose customers as customers are not satisfied as there quality has detoriated, also resulting in negative reviews which would spread bad word of mouth leading to less customers day by day and hence lower revenue for the business

[shamaim shakeel]

Knowledge Point:
Using cheaper ingredients can help a restaurant lower its costs, but it also creates the risk of poor quality and unhappy customers.

Application:
For example, if McDonald’s started using lower quality meat or oil to save money, customers would quickly notice the difference in taste and freshness.

Analysis:
At first, McDonald’s might spend less on supplies and see a small rise in profit. But when customers start complaining about the food, some may stop visiting. As customer trust and sales fall, the brand’s image could be damaged, leading to bigger losses in the long term showing that saving money this way can backfire badly.

[Subhan Zafar]

{KN}Using cheaper ingredients can help a restaurant reduce its production costs and temporarily increase short-term profits. However, this cost-cutting strategy can lower food quality and customer satisfaction, creating a long-term risk to the restaurant’s reputation and repeat sales.
{APP}For example, a restaurant in Lahore might switch from using fresh local chicken to cheaper frozen imports to save costs and increase profits in the short term. While this may improve margins initially, customers could notice the difference in taste and freshness, leading to negative reviews and a drop in customer loyalty.
{AN}As a result, the restaurant’s sales and reputation could decline, outweighing the short-term financial gains. This shows that focusing only on cutting costs can harm long-term profitability and brand image, making it harder for the business to survive in a competitive market.

[Fatima ibtehaj]

[KN] Quality of products hampered.
[APP]For example, if a local Italian restaurant switches from using fresh cheese and vegetables to lower-quality, cheaper alternatives to save money, customers may notice the drop in taste and stop eating there
[AN]This could cause the restaurant’s reputation to fall and its sales to decline, outweighing the short-term savings and it could also lead to health or hygiene complaints, which might damage trust and even result in fines or closure which can harm consumer loyalty and negatively effect brand image

[Naveen fatima]

[KN] A potential risk of using cheaper ingredients is that it can reduce the quality of the food served to customers.
[APP] For example, if a restaurant switches to low cost meat and vegetables, customers might notice a change in taste or freshness.
[AN] This can lead to customer dissatisfaction, it may also damage the restaurant’s reputation, making it harder to attract new customers. In long term, sales could fall instead of rising, meaning profit would decrease rather than increase.

[Muaz Aamir]

KN: If a restaurant starts using cheaper ingredients to increase profit, it risks lowering the quality of its food.

AP: For example, if a pizza shop switches from fresh cheese to a cheaper processed one, regular customers might notice the difference and stop coming.

AN: This can hurt the restaurant’s reputation, leading to fewer sales and unhappy customers. It might also get bad reviews online, which can spread quickly and scare new customers away.Thus in the long run cheaper materials will lead to a decrease in revenue because of the restuarant’s bad reputation.

[Abdul Hadi]

KN: The restaurant may suffer with reduced demands die to using cheaper costs.
APP: for example a restaurant might start using cheaper quality oil, or spices for cooking it's dishes.
AN: this might result in the decline of the brands reputation, decrease competitiveness in the local and international market, and result in decreased profit in the long term.

[Uqbah hadeed kayani]

[kn]it will indefinitely have an impact on the quality of food that the business produces[APP]as the cheaper quality ingredients may not be as up to the mark as the higher priced ones for example if a five star resturaunt (which has a usp of high quality food/ingredients) uses local meats rather than high priced ones the quality will be affected[an]furthermore loyal customers who developed a taste for the high priced ingredients would stop buying from the business , decreasing customer loyalty affecting sales and the revenue generated by the business indefinitely

[M huzaifa jillani]

(KN)
Businesses often try increase profit by reducing costs but this can affect the quality of their products or services.
(APP)
For example a restaurant in Islamabad might start using cheaper meat or low quality oil to save money and increase profit margins.
(AN)
This could be risky because customers may notice the drop in food quality and stop coming to the restaurant. In the long term this can lead to loss of reputation, fewer sales and lower profits which is the opposite of what the business wanted.

[sikander ali]

[KN]losing consumer base as low quality products will lead to low quality food at the end.
[APP]for instance subway in 2014-17 they faced a lot of backlash as their was a chemical discovered in their bread which is used in the making yoga mats as well as their meat and vegetables where accused low quality by many customers from different branches .
[AN]thus due to this their slogan "eat fresh "was now questioned as well as their sales drastically decreased leading to closure of may branches through out the world leading to heavy losses.

[Shuraim Arif]

(KN) It puts the quality of its food to great risk.
(APP) For example, if a restaurant wants to increase profits and aims to do this by cutting down costs, it would try to do this by using cheaper ingredients, putting quality at risk.
(AN) This is because cheaper ingredient usually means bad quality and this would lead to a huge setback for the business as it would lose loyal customers that used to enjoy their meals at the restaurant because of its good quality. This would lead to the business finding it harder to keep a large market share and may be forced to switch objectives to survival to avoid going bankrupt.

[Wahaj Ashraf]

[KN] Using cheaper ingredients will result in cheaper quality.
[APP] e.g. If a business decides to use cheaper ingredients this will lead business to a setback and to the customers as the products quality is not the same which which result in customers being dissatisfied.
[AN] Thus due to poor quality the customers will leave the business and will move to competitors giving a boost in sales of the competitors which will result in the business suffering in competitive market which will eventually lead to loss of market share.

[Aarib Saad]

(KN)It will hamper with the quality of the products.
(APP)Since, a restaurant's success is dependent on the taste of it's dishes, any change in it can cause disappointment of customers.
(AN)Thus, leading towards bad word-of-mouth due to inconsistent taste, worsening brand image, causing customers to switch to competitors, which in turn will lead to decrease in market share of the business.

[Ayaan Fayaaz]

[Kn] Using cheaper ingredients is a cost-cutting strategy aimed at increasing profit margins.

[App] For example, a restaurant may switch to lower-quality meat or vegetables to reduce expenses.

[An] This could lead to a drop in food quality, causing customer dissatisfaction damage the restaurant’s reputation and reduce repeat business and ultimately lower sales and profits in the long term making the strategy risky despite short-term savings.