The purpose of this report is to analyze the repercussions and difficulties faced by Darden Restaurants Inc. after experiencing a financial loss in Q4 2007. It also aims to provide a strategic analysis for addressing this problem. This situation has negatively affected both the shareholders and customers of Darden Restaurants Inc., impacting their external environment. Furthermore, there has been a decline in sales across Darden Restaurants Inc.'s various restaurant chains including Red Lobster, Olive Garden, and SteakHouse.
The decline in the company's profit can be attributed to the underperformance of The Capital Grille, Bahama Breeze, and Seasons 52 restaurants. As a result, Darden Restaurants Inc. suffered a loss of $55.1 million due to expenses exceeding income. To address this issue, the company conducted a strategic analysis aiming to increase sales and reduce costs. Both planning and control
...ling functions were utilized to find a solution for this overall problem. A recommendation to improve sales at Darden Restaurants Inc. is to prioritize providing high-quality services to ensure customer satisfaction.
By enhancing the quality of food and customer services, restaurants can increase customer visits. One way to attract health conscious consumers is by introducing a new menu with healthy options. It is crucial to provide excellent service throughout the ordering, serving, and food delivery process, while also maintaining a budget to avoid excessive expenses. The company's annual report will be prepared to assess its operations, and it suggests that retaining existing customers is essential for solving the main issues.
In order to achieve its objectives, it is crucial for an organization to monitor its activities and control the process (Robbins et al., 2006). Darden Restaurants Inc. ha
a primary focus on "nourishing and delighting everyone we serve" and aims to enhance the quality of its food and customer services. This study gathered and examined corporate information, articles, and media coverage about Darden Restaurants Inc. from the internet.
The Darden Restaurant website offers extensive information about the organization, including past challenges and issues. The report incorporates concepts and theories from a textbook to analyze the functions used by the restaurant. References in the report are based on journal articles found in Monash University's reading lists. One significant problem discussed is Darden Restaurant Inc.'s failure to meet analyst forecasts, resulting in a loss in the fourth quarter. This issue has had a major impact on the company and has also affected its relationships with pressure groups and customers in a significant way.
According to Polonsky (1996), every stakeholder has the ability to impact the firm. Darden Restaurants Inc. is influenced by the pressure group of shareholders who are solely concerned with the company's profit, while customers prioritize the quality of services. Darden Restaurant Inc.'s philosophy is to "nourish and delight everyone we serve," which means that their restaurant chains should prioritize food quality and customer service. Competitor AppleBee's® is surpassing Darden Restaurant Inc. in both service delivery and profit generation, posing a significant threat to Darden Restaurants Inc.'s share of the global food services market. In response to this situation, effective planning becomes crucial as it outlines the necessary activities to achieve organizational goals and establish a clear direction for the organization.
There are two types of planning: strategic planning and operational planning. Strategic plans focus on setting overall goals to position the organization
within its environment. Darden Restaurants Inc. should adopt a long-term plan of providing the best services to people in order to accomplish its service principles. This organizing goal should be consistently applied.
Setting goals for organizing is a type of flexible directional plan that provides general guidelines (Robbins et al., 2006). Currently, there is a growing trend towards healthier lifestyles, so it is important for Darden Restaurants Inc. to address these concerns and attract more customers by introducing a new menu for their restaurant chains. Creating a new menu involves operational planning, which focuses on the specific details of achieving overall goals. This type of planning is short-term and includes monthly, weekly, and daily plans (Robbins, 2006).
The new menu for Darden Restaurant Inc. focuses on promoting healthy food options. This involves using 0 grams trans fat cooking oil to grill seafood at Red Lobster, as trans fat is considered the most unhealthy type of fat. KFC has already adopted this practice, which not only makes the food delicious but also attracts more customers (KFC, 2006). Additionally, Darden Restaurant Inc. is introducing whole "vege" meals for vegetarians and individuals on a diet. These meals offer low-calorie options like roast beef sandwiches and grilled seafood, which are healthier alternatives to deep-fried fish fillets. To cater to children, the restaurant is also incorporating healthy concepts into kiddie meals by substituting oily steak with smash potatoes or low-calorie burgers. Salad options with raisins and croutons, which are popular among kids, can be included in these meals as well. As for desserts, Darden Restaurant Inc. plans to offer less sweet and high-fiber cakes to attract both children and
their parents. This comprehensive approach to promoting healthy eating is expected to increase customer loyalty.
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