Hansen’s Restaurant Case Study

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CASE STUDY 1

Hansen’s Restaurant

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Executive Summary

I am Kathryn McGarry, chef and co-owner of Hansen’s Hideaway. Our restaurant is planning to expand the restaurant’s service from breakfast and lunch to also include dinner (including meat products). The main issue restaurant is facing is related to meat products i.e. whether to do in house fabrication or buy for meat products. After analyzing, market research and comparing the costs and quality, I strongly recommend the buy option for the meat.

Issues Identification

SWOT Analysis

Strengths: -

1. Well established family owned business.
2. Hospitality expertise
3. Year around vacationers.

Weakness: -

1. No previous experience in serving dinner.
2. Inaccurate forecasting for dinner.
3. Current limited menu.

Opportunities: -

1. To expand the business by introducing dinner in the menu with flexibility.
2. To introduce higher-end wine and liquor with better margins.

Threats: -

1. If dinner cannibalize the lunch service or attract new customers with different eating and spending habits.
2. Loss of customers if dinner served is not up to the expectations of customers.

• Short Term issues

1. Beef Quality: Cut and grade of beef largely determined quality. This also affects the cost of the beef as different cuts and grades are priced differently. It is important to place order and use it immediately in order to prevent loss of juiciness and tenderness of meat.
2. Food Safety: Meat is highly perishable and highly susceptible to pathogens with high risk of cross-contamination. So, its very important to store, fabricate, sanitize the food properly so that customers do not get ill by consuming it.
3. Meet Supplier: Three types of meat suppliers: general foodservice purveyors, meat purveyors and local cattle farmers. All suppliers have pros and cons and have different number of deliveries per week. The company need to choose right type of supplier.
4. The meat fabrication process: There is a make or buy option for the company. In make option, company can choose from whole carcass, sides of beef, forequarters and hindquarters, primal cuts, subprimal cuts or steak-Ready primal cuts. Each option has its own pros and cons and company have to choose best options by considering the cost and quality of beef.

• Long term issues

1. Risk of loosing customers: Currently the family owned business is well established and have good market share with breakfast and lunch in the menu. By introducing dinner and meat for the first time, the company can face its growth issue. There is a risk that customers might not like the dinner and meat which incudes threat of loosing previous customers. This will have long term affect on the company growth. This issue needs to be considered along with introducing new items.
2. Ordering and Receiving Process: Introducing dinner and particularly beef into the menu can cause disruptions to the already well-established process and procedures for receiving and storing. Flexibility with beef portion size would reduce the risk associated with demand uncertainty without adversely affecting customers. Ordering and receiving process will be in full efficiency some weeks/months after the change (after having the approximate idea of meat demand)
3. Strategy align: The parent’s strategy is different from the children’s strategy. So, the company is going ahead with two different strategy. This issue needs to be addressed as concentrating on one strategy would be beneficial for the company.
4. Total Cost of Ownership: The company is starting new menu in dinner and business need to make maximum profit with lowest cost possible. This issue is a long-term issue as future cost might be different from the current cost and additional costs are associated once the process get’s started.

Operating Environment

PESTLE Analysis

Porter’s Five Forces

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