The casual dining segment of the restaurant industry refersto a restaurant experience that provides the user with table service and dinersare guaranteed of high quality food than other casual restaurants.
They offerless frozen and processed ingredients, thus the customer is guaranteed of freshand healthy meals. The casual dining industry serves moderately priced food ina casual atmosphere. The concept of casual dining traces its roots to theunited states within the 1990s, although it was not until the 2000s when it waslargely adopted into the mainstream restaurants and dining industry (Young,Clark and McIntyre 87). The restaurant service providers wanted to offer atable service dining to the clients at the same time ensuring reasonably pricedmeals that resonated with the tastes and economic ability of different consumersegments. The casual dining experience targets the average American who isseeking good foot at a reasonable cost and within friendly setting.
At the time of the economic recession that began in the2000s, the casual dining segment recorded increased growth, especially amongthe young individuals. The recession was characterized will less consumerspending and has the financial reality bit hard, consumers were prompted toregulate their spending and this is when the idea of casual dining became veryrampant. Customers who have discretionary sending ted to choose the casualdining experience and since the inception of the idea, it has become verypopular and widely adopted across the United States and other places across theglobe.DardenRestaurants Subsidiary CompaniesThe Darden Restaurants is composedof subsidiary companies. The parent company of the Darden Restaurants isGeneral Mills and its key divisions include Longhorn steak house, Olive Garden,Yard house, Cheddar’s Scratch Kitchen, Season 52, Bahamas Breeze, The CapitalGrille and Eddie V’s Prime Seafood. Longhorn steakhouse is an American Casualdining restaurant chain under the ownership and operated by Darden Restaurantsand it is headquartered in Orlando, Florida and it operates in over 481locations. Olive Garden is also a casual dining restaurant that specializes inItalian cuisine and is headquartered in Orange County, Florida and Orlando andoperates in over 844 locations (Darden Restaurants n.p).
On the other hand, Eddie V’s Prime Seafoodoffers steaks and seafood and its services include fine dining. It isheadquartered in Texas. Another subsidiary, the Capital Grille offers finedining restaurant and is headquartered in Orlando Florida and has over 50outlets. The Bahamas Breeze capitalizes onCaribbean-inspired seafood, tropical drinks, steaks and chicken and it is alsoheadquartered in Orland and its outlets as the present is at 38. Most of itsoutlets are in suburban retail districts and tourists areas. Further, Season 52is an American fresh grill and wine bar that was established in 2003.
The brandconcept is based on the delivery of a casually sophisticated setting, seasonalmenu and fresh ingredients to deliver menus that are ordinarily lighter. Season52 has over 4 outlets spread across different state in the U.S. and it isheadquartered at Orlando, Florida (Darden Restaurants n.p). Yard House, another subsidiary of DardenRestaurants, Inc. is an American sportsbar chain that has over 66 locations spread across the United State, wherebymost of the outlets are located in the West of Mississippi river, therestaurant offers casual dining experience and it is headquartered in Irvine,in California (Darden Restaurants n.
p). The final Subsidiary of the DardenRestaurants is the Cheddar’s Scratch kitchen, which had been formally known asCheddar’s Casual Café. It is based in Irving Texas. The restaurant serves ablend of made-from scratch dishes and the dining establishment combinestraditional modern American settings.Corporate-levelstrategy currently being pursued by Darden Restaurants The corporate-level strategycurrently being pursued by Darden Restaurants is focused on band buildingthrough related diversification and concentration the company has numeroussubsidiaries that operate independently, offering a wide range of diningexperiences and models. Related diversification refers to a corporate levelstrategy whereby a company leverages on its brand name to expand the businessacross different regions.
In this regard, Darden restaurants have used itsshared market, skills and knowledge to launch the retail chain under differentsubsidiaries across the globe. Darden restaurant strong cash flow has enabledthe company to expand to different regions. Basically, the Darden restaurantexperience includes a common diversification along wide range of dining experiences.With regard to concentration, Darden Restaurants has been dedicated tolaunching its operations across different markets in the United States and thisexplains the huge network of the retail chain that operates under the network.
The company’s network has been growing and through its subsidiaries, thy have ahuge presence in the United States and elsewhere across the globe.CorporateLevel Structure “As companies grow and expand, theydiversify their business to multiple businesses.” The corporate level-structureof Darden Restaurants Inc. is Multidivisional.
Out of the three most commonstructures; multidivisional, strategic business unit and corporate matrix, itfit best within the multidivisional structure. According to the PowerPoint in chapter8, a multidivisional structure includes few businesses compared to the othercorporate structures. It has moderate/low relatedness across divisions. Thereis a moderate/low need for coordination across divisions. Lastly, financialsynergy may be available across divisions and some operational synergy(although limited) only to the extent that the divisions are related to eachother. According to an online dictionary, a multidivisional firm is “a parentcompany that has divided the company into smaller operating divisions, allowingfor some decisions to be made at the divisional level and some decisions to bemade by the parent companies’ management” Darden Restaurant Inc. has nine diversifiedbrands. The nine are: Olive Garden, LongHorn Steakhouse, Cheddar’s ScratchKitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and EddieV’s.
There is moderate/low relatedness across divisions. Yes, they are allrestaurants but they differ in things such as cuisine, price range and target market.Moderate/low need for coordination is seen at Darden Restaurant Inc. because ofthe different markets described previously. The restaurants are not competingwith the same businesses so it is import for the brands to advertiseaccordingly to their primary customers. Operational synergy may be seen inthings such as a POS system or technology of sorts. Company culture that Dardenis well known for is also included in the operational synergy.
DardenRestaurant Inc. provides financial synergy to their restaurants such as OliveGarden or Seasons 52. This comes in the form of advertising, PR, etc. Thecompany’s executive leadership includes a president and CEO (Gene Lee) and alsohas a president of each restaurant such as Ian Baines, president of Cheddar’sScratch Kitchen. This allows for some decisions to be made by the divisionallevel (Cheddar’s Scratch Kitchen), or Darden’s management led by Gene Lee. Byusing this corporate level structure, it enables Darden Restaurant Inc. to besuccessful, meaning multidivisional was the most appropriate choice. There isquicker decision making in the company because of divisions being able to makedecisions by their leading management.
The restaurants are too different o haveone leader making decisions for all. BusinessLevel Organizational Structure The restaurant brand chosen ofDarden Restaurant Inc. was Seasons 52. This restaurant’s business-levelorganizational structure is the geographic/customer structure.
According to thechapter 8 PowerPoint, geographic organizational structure is used fororganizations that have offices or business units in different geographiclocations. A geographic organizational structure defines a reporting andfunctional system across multiple locations. This type of structure defines areporting and functional system across multiple locations. This type ofstructure allows an organization’s offices to operate individually whileadhering to company policies and values.
Office locations can be local,national or international. Also stated in the PowerPoint, this form oforganizing is common to the hospitality industry because companies in theindustry tend to expand/grow by adding more units and into multiple locations.This structure groups employees and managers from different functional areastogether to serve a specific customer market or region.
Seasons 52 is located across 19 states.There are corporate executives for the overall company of Darden RestaurantsInc. and then there are district and regional managers, franchise owners, andrestaurant managers. All of the locations have regional managers that areresponsible for the geographic duties of the company. Whether that is regionaladvertising, regional specials, different budgeting and accounting, etc.
thesemanagers are responsible for all doings. This allows the restaurants to have aneasier access to authority. The offices are operated individually while keepingthe Darden Restaurant Inc.
policies and values. Threats andOpportunities There arenumerous opportunities facing Darden Restaurants Inc. Olive Garden, a brandowned by Darden has been increasing market share with the focus on value andtake-out. According to a MarketWatch article in June, they were focusing onlarge-party delivery, large-party takeout and delivery are areas of”competitive advantage”. Also from the article, it states that Olive Garden isbenefitting from its strong everyday value, simplified menus, and takeoutsales. Another opportunity Darden faces is the acquirement of Cheddar’s Scratchkitchen which happened in April. Since there is a similar target demographicwith Olive Garden, the company and experts believe it will grow strongly withthe help of the operations from Olive Garden. Many restaurants are experiencing threats totheir business.
One threat is the push for higher minimum wages. With this inplace, the corporation will have to get rid of employees to make sure that theycan keep up with the pay. It will be very difficult for the restaurants to keepall their employees, because they won’t be able to afford them.
With that insight, employees will have to pick up the slack and work harder due to lesslaborers. This will make employees unhappy and stray away from thebusiness/culture. Government labor laws are also becoming a threat. Deportationand immigration policies have effected the restaurant industry as a whole notexcluding Darden.
Another threat Dardenfaces is the changing trends in the industry. The Top 10 Trends of 2018according to the NRA includes healthy, sustainable, and simple choices. Theyemphasize a lot about locality. Many of the brands products do not includesuch. The shift in dining cultures could really threaten the organization ifnot examined properly.