Case Study: What type of outlet?

Derek dreamed about opening his own restaurant but he had no idea about how to run one let
alone where to begin. When he won the lottery he decided that this was the time to start his little
dream and he decided to go back to the village where his parents lived.
The village has about 5,000 inhabitants and is only 20 minutes by car from a large city. It already
has two takeaways and three small restaurants that are doing ok. All three restaurants are midranged. A fine dining restaurant opened 3 years ago but it closed after 1 year. There is also a pub
in the village that offers a limited menu at lunchtime.
Derek is unsure as to what type of restaurant he should open. Money is no object to him now that
he has won the lottery but he also does not want to invest in an enterprise that is going to lose
money for certain.
What would you advise Derek to do next?
If you were Derek, what type of operation would you most likely attempt to open? Why?

Case Study: Restaurant downsizing

Sally Smith is a manager at the Butcher Block Restaurant. Due to her extensive background in
the restaurant business, she has great influence on the executive management and often makes
significant recommendations for changes that are supported. The restaurant was closed two
months ago after a news release issued by the regional Health Department claimed that at least
twenty people had become ill apparently with the listeriosis infection after eating at the Butcher
Block the month before. Listeriosis has been isolated in the feces of healthy humans, sheep,
cattle and poultry, and the spread of this disease has been linked to the consumption of
contaminated food production. Five of the sickened people had to be hospitalized. Although a
thorough restaurant health inspection failed to prove the restaurant was responsible, the negative
press intensified low attendance problems.
This downturn in the business has made it necessary to prepare for a reduction in the workforce.
The terminations will be permanent and there are no termination benefits. Executive
management has identified five employees as the first ones to be considered for termination. All
five employees are at the same organizational level, but from different areas of the establishment.
Bridgett is a server; Marc is a bartender; Neil is a cook; Jennifer is an expediter; and Stephen is a
baker. One must be terminated and the rest ranked for future termination. Sally has a friendly
working relationship with all of these employees and regrets having to let any of them go.
If you were Sally, determine who will be the first to go and rank order the remaining employees.
Assume there are no union contracts, company policies, legal requirements or traditional
business practices that constrain your decision making. Base your decision about an employees
position on the termination list purely on your own judgment of fairness to the employees and
benefit for the Butcher Block. Provide justification for your ranking and strategy for covering
with one less position each time someone needs to be terminated.
Sally hopes to use her leadership skills to rejuvenate the restaurant and increase business. She
has always been one to persevere in the face of adversity. Her employees are loyal to her because
of her ethics, skill in running a restaurant and support and consideration in her relationships with
them. At present, the negative press is coupled with a severe economic downturn that is
impacting business even further. The prediction is that economic recovery may not happen for
two years into the future, Sally is thinking about recommending to executive management that
they downgrade the service level in the entire establishment, which would result in a change to
their concept, in order to save labor costs. What ramifications might this idea have on:

the concept

marketing

costs

customer perception

customer visitation

and so on?

Do you think this is a good idea? Why or why not?

Identify the short-range (within two months), mid-range (within six months), and longterm (within two years) aspects of which Sally must be aware.