& PUB Crystal Lake, Illinois
Your start in the pizza business
came in the eighth grade, when your father opened the Village Pizza restaurant.
After graduation, you entered the construction business, building homes for
more than a decade. But, then, something drew you back. So, you took the family
recipes and started your own restaurant, Nick’s Pizza & Pub (far enough
away to avoid competing with Dad).
Your goal was
simple: to build a fun, family restaurant. Nick’s Pizza & Pubs—there are now two—have 26-foot
high, floor-to-ceiling stone fireplaces, stuffed bears and moose, “antler
chandeliers,” huge aquariums separating the bar and the restaurant, and wood
everywhere—oak floors and huge beams recycled from century-old barns. And
they’re huge, each seating 320 guests. On a Friday night, 1,500 customers will
eat at Nick’s, most waiting an hour for their tables, while having a drink and
eating free peanuts at the bar. Those 1,500 customers will eat 600 pizzas, and
carryout customers order another 200. Why do they come? Beyond the great pizza,
they come for the value. A medium cheese pizza is $11; soft drinks are $1.75,
with free refills; and the popular Italian beef sandwich is under $6.00. Nick’s
is really affordable, especially for a sit-down restaurant.
With things going
so well, you decided to open three more restaurants in the next five years.
Unfortunately, the recession changed your plans. Guest counts dropped by 20
percent, or 100,000 people per year, decreasing revenues by nearly $1 million.
On top of that, your managers were having difficulty controlling costs. Each
week, they conducted a physical count, comparing food inventories (tomato
sauce, flour, cheese, beef, liquor, etc.) to the previous week, and then
adjusted for this week’s sales. But beverage and food costs were still above
goal, 22 percent of revenues for beverages and 20 percent of revenues for food.
The problem, as you discovered, was your management, all hired externally
because of their extensive experience at established well-known restaurant
chains. Their idea of leadership, learned in the “command and control” cultures
of other restaurants, was telling people what to do. So, they had someone else
put in the inventory numbers, and when the numbers came out wrong, they didn’t
dig deeper or ask questions to discover why.
In the end, with
costs up, revenues down, and lending standards tightening, the bank didn’t
approve the new construction loans. So rather than expanding, your immediate
challenge is to fix and grow the two Nick’s restaurants that you’ve got.
Frustrated with your managers, you gave responsibility for reducing costs to a
24-year-old who had worked for you since she was 16. She fixed the problem in
four weeks by discussing the problem with the kitchen, wait, and bar staffs,
who suggested immediate solutions to reduce costs.
Sensing that she
was onto something, you pulled together the staffs in both restaurants to make
a financial presentation that showed in detail how and where Nick’s was earning
revenue and incurring expenses. After answering their questions, you asked for
their help on three key issues: pay, hiring, and training.
Of course, everyone wants to be paid more, but with costs being an issue, are
there ways to pay people more but link those increases to the company’s
profitability and workers doing their jobs better and staying with the company
longer? If so, how? Next, because hiring talented workers is key in the
restaurant business, how should Nick’s redesign its interview and selection
process to do a better job of finding and keeping the best kitchen, wait, and
bar staff? What is it about interviews that doesn’t work and should be
abandoned? If so, what should be done instead, and why? Finally, at most
restaurants, training is simply shadowing experienced workers to see what they
do. So, what could be done at Nick’s to improve training that would help them
do their jobs better and to continue learning and improving over time?
Prepare a case
analysis covering the following points:
Purpose-briefly state the purpose of the
paper, what will be covered and how.
Introduction-give a brief
introduction of the case, stating the background and the key issues currently
facing the company.
Strategy-what strategy would you select for
the business? Cost leadership, differentiation, focus or a combination, and explain
Success Factors-Identify the
most important factors for the success of this business and explain why each
one is important.
Business Goals-What would be
your most important goals for the business? Explain why these goals are
important. Use the Balanced Scorecard to develop appropriate goals, measures,
and actions in each of the four areas.
Leadership-What type of
leadership would you use in the business and explain why you feel that type of
leadership is appropriate for this type of business, the workforce, and the
current business situation.
Employee Selection-How would you find
and select new employees for each of the key jobs? Explain why and the
selection criteria you would use.
Employee Training-How would you
train new employees and why?
10.Employee Compensation and Motivation-Given the competitive nature of the business, how would you compensate
employees and yet maintain the profitability of the business? Be specific and
explain what the costs would be? What additional things would you do to
motivate the employees to meet the business goals? Explain why you feel they
would be effective?
11.Business Controls– What type of business controls would you use to assure that the goals
of the business are being met? Explain why you would use each one. What type of
feedback would you use and what corrective actions would you take if goals are
not being met? This should be based on the Key success factors and the Balanced
12.Additional Actions-other actions you need to take to assure success?
Assessment-based on the above plan, evaluate your odds of being successful
in meeting your goals and state why you are confident.
14.Summary and Conclusions-summarize the key points of the paper.
Paper is to follow APA writing style format; and have a minimum of three references. Use headings in paper for