Dear Sir
I need To know the classification of items in menu engineering (like cash cow)
but I don't know the others. Please send me the others and the explanations.
Cost Controller (major 4 star hotel)
Thanks for the question!
The four quadrants of the traditional Boston Consulting Group's Growth-Share Matrix are Stars, Cash Cows, Question Marks and Dogs. Our industry's Menu Engineering categories are Stars, Plowhorses, Puzzles and Dogs. Pretty similar names but much different analysis. The menu engineering model is constructed from POS data and standard recipe costs.
Two pieces of information are required to construct the curve. For a given period of time, you need to know the sales count for each entree. In addition, you need to know each item's gross margin (selling price less the standard recipe cost).
I just happen to be in Michigan today. The menu engineering concept was developed at Michigan State University. Dr. Kasavana's model puts the highest weight on menu popularity. Popular menu items will be either Stars or Plowhorses (depending on their gross margin). Unpopular menu items will be either Puzzles or Dogs.
The graph approach to the menu engineering model is excellent for strategic planning exercises. The y-axis shows relative popularity and the x-axis relative profitability. The reason I prefer the graph method for decision support is because there are Plowhorses close to becoming Stars and Puzzles which are Dogs in disguise.
If you find a Plowhorse near the y-axis, a small increase in the selling price or a small decrease in the standard recipe cost could help create the next Star. On the other hand, a Puzzle far below the x-axis is unlikely to achieve popularity even if the selling price is slashed. Your customers are drawn to your restaurant by your Stars and Plowhorses. These items deserve your attention.
There is a tendency to focus on problems. Rather than trying to fix these unpopular items, you should work hard to make more profit with logical accompaniments to your Stars.
