To discuss: the issues related to hiring third-party services and the way these issues can affect the financial viability.
Explanation of Solution
When a restaurant uses third-party services, it may face some operational issues. Some of these issues have been discussed below:
1)Misuse of confidential information: When a restaurant uses third-party services, it puts on the confidential information on risk, that can be used by the third-party for making personal gains.
2)Lack of flexibility: The restaurant may face difficulties in performing its operations. There is a possibility that third-party services might not be performed by skilled workers. Such a scenario may lead to poor quality of restaurant operations and can harm the firm in the long run.
3)Instability: The third party can go out of business at any time which can lead to difficulties in the management.
4)Unsatisfied services: The third-party service may fall behind the expectations of the restaurant. Also, customers might blame the restaurant for a mistake made by third party services.
The way in which these issues affect the financial viability of the restaurant are as discussed below:
1). Risk of uncertainties: When vital functions are outsourced, the restaurant might be dependent on the service provider and risks such as bankruptcy and financial loss cannot be controlled.
2)Market consequences: When the market price changes so frequently, the restaurant can take advantage of this by purchasing at the right time.
3)Extra-market consequences: These are the items that are not directly priced in the market, but in indirect ways, a price may be assigned to these items called shadow price by economists such as injuries and other uncertainties at the workplace.
Third-party services: It refers to the services that are rendered by a third party (party other than the company providing services and the client) and third-party service providers can be any agent, consultant, advisor or any independent contractor who is providing services to the main firm.
Want to see more full solutions like this?
Chapter 1 Solutions
ENGINEERING ECO ALANYSIS W/STUDY GUIDE
- What are marketing, operations, finance, and human resource of Alibaba Group: The Rise of a Platform Giant based on efficiency?arrow_forwardWhat are the typical orientation of the markets and audiences for new online media producers?arrow_forwardKA Please answer all questions with complete solutions ASAP!arrow_forward
- Self-interest and things that benefit companies in a business sense do not always align. That is to say, I can have a completely different view of an ethical dilemma from a personal standpoint but still manage to reach an agreement from a business perspective. A large part of this has to do with the simple fact that I am not at the center of everyone's world. More than I, or even a small few, will be affected. At the same time, people aren't the only ones at play. I would have to be aware of not just the consumers and the workers, but also things like the company's reputation and what we may gain as a result of the action taking place. I am a huge supporter of the utilitarian approach to most things but that isn't always an option. Sometimes what is good for the majority does far too much damage to the minority to be overlooked. So even though I support such a theory there is a good chance that I would go with the theory surrounding consequences. This means that if the act is good, the…arrow_forwardEconomicBoth the subpartsarrow_forwardCritically evaluate the Market/Marketing Research methodologies of Netflix through the extensive use of Big Data analytics to gather insights about their customers/ stakeholdersarrow_forward
- What is the role of strategic management changing in the context of current economic processes and the development of new information technologies typical of the current fourth technological revolution, known as Industry 4.0?arrow_forwardHow does Nokia's wrong strategic response to changing market conditions cope with economic decision's concepts, such as rational-actor paradigm, fail to create value, sunk cost/hidden cost fallacy, adverse selection, extent decision, elasticity, etc.?arrow_forwardWhat are the weaknesses of Alibaba Group: The Rise of a Platform Giant?arrow_forward
- TC=400+35Q-6Q2+0.1Q3 Draw TC, TFC, MC, and TVC schedule with graphs from Q=10 to Q=50arrow_forwarddo not use a google answer Economies of scope are _________________________________________________arrow_forwardWhy does the strategic management process take into consideration the challenging issues ofglobalization, innovation, and sustainability? Discussarrow_forward
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning