Case Study: Le Chic Restaurant
The Le Chic is a restaurant located on a busy street in thecentre of a major city. It attracts a steady flow of customers wholike its commitment to quick service with good food. As such themanagement pride themselves on offering a standard menu, whichincludes a good range of affordable yet delicious dishes – fromstarters and appetizers, through main courses and specials topastries and desserts. While Le Chic seats around 80 customers, itslayout is basic restaurant style and customers have often said thatit has a ‘fast-food’ feel to it which fits with its currentbusiness objectives but may not be ideal for the future. A majorconcern for management has always been to maximise efficiency andreduce turnaround times: orders must be swiftly relayed to thekitchen and the food brought to the table within 15 minutes, evenduring ‘peak hours’ – the intended outcomes being consistency inboth customer service and daily sales targets.
Le Chic employs 35 people, 50% of whom have permanent contracts,working either day or evening shifts. The other half is splitbetween part-timers and relief workers who are usually the ones todo double shifts over busy weekends. All terms and conditions ofemployment are negotiated on an individual basis.
Over the past few months staff have found it increasingly hardto maintain the desired levels of customer service. There seems tobe a lack of coordination between waiting and kitchen staff. Onceseated, customers often have to wait for as long as one and a halfhours before being served while a large number of those queuing upoutside usually just give up on the long waits and walk away insearch of other eating options, which in the city centre areplentiful. More alarmingly, profit margins have remained ‘thin’ inthe recent years and, for the first time in 10 years losses wereregistered on the restaurant’s balance sheet. Le Chic’s currentmanager attributes this particularly poor performance to theeconomic crisis and to the fact that the competition has all of asudden tightened up with the opening of a pub and two newrestaurants on the main street and a growing cluster of similarbusinesses within a mile radius.
Dispirited, the current manager has decided to step down to makeway for a new manager, John, who has just completed his Masters inBusiness Administration but also has experience of working inanother similar type of restaurant. John’s remit is to deliver anew business strategy that can effectively reverse Le Chic’scurrent performance and ensure its survival and growth in thelonger term. Whilst recognizing that these are indeed difficulttimes, John believes that there is need, more than ever, forbusinesses demonstrate an ‘entrepreneurial spirit’ if they are tohave any chance of success. He has therefore formulated a proactiveand quite aggressive change strategy containing the following keycomponents, which are to come on stream almost at the sametime:
- Le Chic is to be turned into a chain restaurant. A total of£1.5 million is to be spent on the refurbishment of the existingsite and on the set up of two new restaurants in differentcities.
- The chain restaurant will differentiate its offerings in theform of a revamped more upmarket menu, a sumptuous décor and a newbar area, for which a select clientele would be more than willingto pay a premium.
- Around 60 new employees are to be recruited and deployed acrossthe three restaurants. While all members of staff will have toattend induction training to meet the new standards of service,some of the more experienced staff will be transferred to the newlyopened restaurants to help out with on-the-job training for newrecruits.
- A new information system will be set up to link up Le Chic withits suppliers and standardize ordering, payment and accountingprocesses across restaurants. Also, a multimedia website willenable customers to access menus, make reservations, post feedback,download discount vouchers, benefit from promotional events orsimply keep abreast of any development at Le Chic.
- Le Chic will seek opportunities for joint promotional allianceswith potential partners especially those operating in the sameareas of the chosen cities. A good example might be cinemas andlocal bowling alleys.
- Finally, Le Chic will demonstrate social responsibility bysponsoring community projects, which can contribute to thedevelopment of a strong brand image and a self-reinforcing cycle ofsocial value, employee engagement, customer loyalty and enhancedreturn on investment.
All the owners of Le Chic think that John’s business strategy isvery creative and the promise of bringing profit margins to 15%within 5 years. However, some have expressed their concerns withregards to the considerable capital outlay that John’s new strategywill require, which, if unsuccessful, will leave the businesspotentially bankrupt. To allay these concerns, John has asked tohire the services of a consultant to help him out with theexecution of his new business strategy.
Coursework Assignment
You are required to step into the shoes of the consultant hiredby Le Chic. Your task is to write a report addressing the keychange issues that can have a significant impact on theimplementation of its new business strategy. Whilepractically oriented, your report should draw onappropriate change theories andmodels to include the following:
Q. Recommendations as to how management should plan and executethe proposed change so as to ensure its successful implementationusing a one of the change models covered in the lectures. Pleasealso note that this section using the theory should be contextspecific (700 words).
