The document analyzes the key factors for the successful operations of cafes and lounges in Delhi. It conducted a survey of 118 customers to identify the most important factors. The top factors identified are layout and ambience, pricing, location, music preferences, and cuisine. The document provides examples of how some cafes have strategized around these factors, such as dynamic pricing based on demand, offering a unique ambience and rotating view, and live music performances. It concludes that while balancing multiple success factors is challenging, cafes that excel in one or two factors through new concepts or reasonable prices have been able to earn profits.

1. 1
OPERATIONS MANAGEMENT PROJECT
Operation Strategies of Cafes and
Lounges in NCR
Submitted by:
Name Roll No
DIVYA GUPTA WMP14018
SUBHAL KUMAR WMP14055
SWATI LAL WMP14058
NEHA TRIPATHI WMP14066
SIDDHARTHA PATEL WMP14070

2. Introduction
Strong economic growth, increased disposable income and the impact of various factors have
fuelled a strong demand for dining places in India’s capital city. The restaurant business
being a comparatively low entry barrier industry is also being perceived as an attractive
option for those bitten by the entrepreneurial bug. Accordingly, we see a new cafés opening
up in Delhi NCR. These cafes provide a whole lot of experiences like Location, Ambience,
Live Music, Dance Floors, Delicious and Changing menus etc.
However, it can be observed that in this market, not all the cafes are blessed with consistent
success. Why are some cafes consistently successful, while others are not? Is there a
strategy, early entry edge or just sheer luck?
Methodology
In this analysis for determining how a café or lounge stands out in the market giving a tough
competition, we have analysed how operation managers achieve low cost, differentiation
(uniqueness) and good response. These are strategies of achieving competitive advantage in
operation management.
• Survey was shared amongst the regular and potential visitors of that specific market to
get insights about the customer preferences and choices.
• An interaction was made with the management of the most visited/successful café of
that market. This interaction was used as the foundation to study the strategy about
how the café is keeping up to maintain the consistency and is it aligned to the
customer’s needs and preferences.
• A comparative study was done to analyse that what makes the other cafes in the same
market, with the same potential customers, lag.
Basis of analysis are the following 3 fundamental criteria:
• Cost
• Differentiation [Seasonality/Innovation]
• Responsiveness [Service]

3. 3
Data and Analysis
For analysing the various parameters which affects a café’s success, we conducted a survey
and got 118 responses which includes different categories of customers visiting the café namely
– Students, people doing private jobs, people doing government jobs so that we can identify
the prominent factor based on the purchasing power of customers. We will be using this data
to comprehend our observations with data in this report.
The graph shown above represents what are the influencing parameters while selecting a café
according to visitors.
• LAYOUT & AMBIENCE
The customer’s perspective of importance for layout and ambience has been surveyed
and analysed. As per the survey it has been found that while choosing a cafe or a lounge,
44.4% of the NCR visitors prefers ambience and layout as their 1st
priority and 47.8%
of the NCR visitors gives it a second priority. It has also been analysed that ambience
and layout is the first criteria that comes to the mind of 39.7% of the NCR visitors while
choosing a cafe or a lounge to visit.
However, on visiting the cafes of SDA and South Delhi on a random basis, it has been
found that entry and exit are not appropriate, the seating layout is very clumsy, kitchen
layout is not efficient and interior decoration part is dull. Cleanliness plays a major role
as well for some of the customers- they are ready to spend more for a hygienic place.
As per our survey 69.8% people prefers cleanliness in a café.

4. • PRICING STRATEGY
The operations of Café and lounge mainly depends on pricing of food being served
along with the other services being provided. It is one of the most attracting point
from customer point of view. We can even segregate the crowd visiting the café or
lounge into three categories based on money spent during their visit and they are as
follows: High Money Spenders (Business men, Rich people), Medium money
spenders (middle class families), and Low money spenders (Students). A café or
lounge must take care of all these three categories to sustain and be in the top list
while doing the pricing of menu and services. For analysing this factor, we did a
customer satisfaction survey to find out which is the most influencing factor from
customer point of view while selecting a café for his/her visit. We figured out that for
52.4% people, price of the food and services being provided matters a lot.
From this graphical representation, we can clearly see that 51.8% people are average
spenders and spend about 2000-5000 in a café or lounge. Price along with
differentiation in the form of innovation in cuisine, services being provided along
with a popular location makes a café stand out in the market. This only increases the
sales and attracts customers.
• LOCATION, CROWD & PARKING
One of the major factors that attract consumers to a café/lounge is where it is located.
Good experiences can be created for the consumers if prime locations are offered to
them. Prime locations progressively attract good crowd and hence a good experience
for the consumers like Connaught Place, Hauz Khas Village.
Aspects that affect the decision-making pertaining to location include transportation,
commercial area, economic, competition and environment. The criteria are rent cost,
transportation cost, convenience to mass transportation system, size of parking space,
pedestrian volume, number of competitors, the intensity of competition, size of the
commercial area where the restaurant is located, extent of public facilities, convenience

5. 5
of garbage disposal, and sewage capacity. While many factors determine the strategy
to increase profitability, we have focussed on the factors that attract customers the most.
The customer’s perspective of importance for location has been surveyed and analysed.
As per the survey it has been found that while choosing a cafe or a lounge, 49.1% of
the NCR visitors prefers a good location.
30% of the NCR visitors prefer parking space availability. Although visiting the cafes
of SDA and South Delhi provides a good option for location and crowd, parking is a
big challenge.
MUSIC PREFERENCES
Many Cafes and Lounges choose to play chill-out tracks in the daytime, giving
customers the opportunity to relax and enjoy a drink of their favourite brand. Other
popular choices include rock music, which is often played later in the day and into the
evening. Some of the cafés have come out with the concept of live band which is more
in trend now. They provide soothing music from popular bands generally on weekends
in night time to increase their sales.
According to our survey 37.9% of the visitors considers type of music as a factor in
order to choose a café to visit.
And around 54.8% of the population prefers visiting café having live band performance.

6. CUISINE
The customer’s perspective of importance for cuisine has been surveyed and analysed.
As per the survey it has been found that while choosing a cafe or a lounge, 47% of the
NCR visitors prefers cuisine and as there preferred priority and if we see for the specific
cuisine Italian is the best preferred cuisine for the visitors according to the survey 50 %
of the NCR visitors is choosing Italian as a cuisine
It has also been analysed that cuisine is the one of criteria that comes to the mind of
17% of the NCR visitors while choosing a cafe or a lounge to visit.
However, on visiting the cafes of NCR on a random basis, it has been found that people
are not having that wide knowledge on the kind of cuisine that the cafes are offering
therefore they are not able to understand the dish and finding it as a biggest challenge.
Also innovation and presentation of the food being served matters a lot. 31.9% of the
visitors prefers café providing innovation
Moreover, many café and lounges have come up with exclusive ideas of food combos
and multi cuisine dishes so as to cater almost all customer choices. For example –
Sizzlers is an innovative idea of presenting hot roasted or grilled veg or non-veg options
on a smoky hot plate served on a wooden base.

7. 7
Managerial insights
As ambience and layout of a cafe or a lounge plays a major role in getting selected by the
NCR visitors, one should give them more importance while designing or redesigning it. Some
of the solution layouts are mentioned as below:
• The entry and exit gates should be separated, so that the customers coming in and the
customers going out do not come in each other’s way.
• The seating layout should be like a tree that if you stand at one end i.e. stem then you
can see each and every seat like a leaf that it is occupied or not; keeping in view that
the seating layout should also maintain the privacy of the occupiers.
• The interior decoration and lighting inside cafes and lounges should not be dull; rather
it should be appealing and warm. The first impression while entering a cafe or lounge
makes a permanent impression on the mind of a visitor. Hence, the entrance, interior
decoration and lighting should be appealing rather than a dull welcome.
• The kitchen layout should be constructed as efficient as it can be. For example, the last
part of the kitchen should start from the vegetable washing tap, followed by cutting
table, utensils racks, cooking burners and finally the plate dressing table so that
afterwards it can be taken out to be served. This would be like a production line flow
and it will increase the efficiency of kitchen and decrease the waiting time of customers.
Introducing changes in the price, without disconcerting the customer is a humongous task to
achieve. Let’s have a look how operation managers have employed price and differentiation
strategies to stand out in the market with the help of few examples:
• Café Dalal Street in Delhi among others have been offering drinks at dynamic prices.
The prices of their drinks fluctuate, based on the supply and demand of the drinks,
much like an actual stock exchange. While this is a great way to earn profits, it also
works wonderfully well to attract customers.
• Chef Aman Puri, Executive Chef at Imly and Too Indian says “While designing the
menu for Imly and Too Indian we made sure that we are not just delivering taste and
presentation but gifting comfort to people by providing them with everything under
one roof. If Menu designing is considered to be difficult, deciding on the pricing of
the menu is all the more difficult. No matter how different your food look or taste, if
your pricing is not in line with your competitors’, survival surely becomes a little
difficult. You can go levels up in your presentation but not in pricing.”
• If your restaurant serves exclusive or specialty menu items or offers a different
ambience (for instance, the revolving restaurant/café in Connaught Place - offers a
360° view of the city in its upscale restaurant), you can charge more for the food and
the experience and earn huge profits.
Operation managers must keep in mind these things that Price along with differentiation in the
form of innovation in cuisine, services being provided along with a popular location makes a
café stand out in the market. This only increases the sales and attracts customers.

8. Talking about music preferences, Café plays DJ during morning and early evening hours to
cater to all the visiting customers followed by live band, Sufi night during the night hours which
is mostly preferred by the customers.
For example: Flyp in Connaught Place is famous for its live band. They call various top bands
which is the main point of attraction for the customers. You can sit and enjoy the smoothening
music with drinks and dishes.
Providing similar cuisine in innovative and unique way is one of the biggest challenge for an
operation manager in a café.
For example: Molecule bar in Connaught Place – they say that “Science comes to life on a
plate “. For example, they serve molecule Dragon Smoke Popcorn which resembles a grenade.
It is infused with liquid nitrogen which a unique factor.
Conclusion
Majorly five factors are really essential ingredients for success of a café: Layout and ambience,
price, cuisine, music services and location. Balancing these five factors at one point of time is
a difficult job for an operation manager. But still several café excel in one or two factors and
earn huge profits in this competitive market.
One of the biggest example to sight is Flying Dutchman Café in Ghaziabad – It is one of a
kind of café comparable to top cafés of Connaught Place and Hauz Khas Village and its earning
huge profits.
This café is having Pirates ambience and having live band with drinks and dishes in Ghaziabad.
It’s flourishing like anything in this place because of its choice of location, layout, music
preferences, reasonable prices and offers and amazing cuisine. It’s a new concept in Ghaziabad
so people are getting attracted towards it in huge numbers.