Research Paper on Restaurant Industry

Introduction and Mission Statement

Established in March 1995 in Florida, Darden Restaurants (DRI) runs casual dining restaurants in Japan, Puerto Rico, brail, Middle East, Peru and the United States under various brand names: the Capital Grille, Bahama Breeze, The Yard House, Wildfish Seafood Grille, Seasons 52, Longhorn Steakhouse and the Olive Garden. As of 2014, the conglomerate owned a total of 1520 restaurants, not counting the more than 600 Red Lobster locations. These full-service restaurants offer all meals including dinner, lunch, and breakfast, serving more than 300 million meals every year. The items on their menu are generally priced higher than those of McDonald's, Wendy's and Burger King. DRI has broken down its business operations into 3 segments; the LongHorn Steakhouse, The Olive Garden, Specialty group and others which account for its remaining establishments. The dynamic duo of the Darden Restaurants has their customers buy meals at an average cost of $16-$20. The Specialty Group extends into the luxury full-dining experience, which includes restaurants like Yard House, Season 52, Capital Grill and Eddie V's, which have guest checks that average from $20-$80 per head. The niche restaurants under Darden Restaurants cater to various segments of the population and enable the company to reach more markets and increase productivity. Everything the company does is focused on its mission, "to be financially successful through great people consistently delivering outstanding food, drinks, and service in an inviting atmosphere, making every guest loyal."

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Application of Deming's 14 Points

Dr. Edward's Deming was a forerunner in the development or productivity improvement, process control and quality establishment in Japan. His efforts eventually resulted in the establishment of the Toyota Production System. Darden restaurants have applied some of these strategies, and they have only but helped it to grow and reach the heights that it currently soars at. Nonetheless, there are other Deming's points that it also needs to incorporate for ultimate performance. One of the points that Darden Restaurants has purposed to apply is the 1st point which advices businesses to establish a constancy of purpose to improve services and products, with the goal of becoming competitive and staying in business, as well as providing employment opportunities (Cohen, 1998). Darden Restaurants has managed to improve its products and services through segmentation marketing where the stores offer tailored products to the consumers. This gives room for innovation and improvement in satisfying and retaining a certain customer base. Consequently, it has helped Darden Restaurants to remain in the market while increasing its market share. Darden Restaurants has also incorporated Deming's 3rd point by ceasing on the dependence of inspecting to achieve and maintain quality (Cohen, 1998). The management has eliminated the need for inspection by establishing quality standards for its chains that now resonate with the demands of the customers. The fifth Deming's point is also a key driving factor for Darden Restaurants. Since the incorporation of these restaurants, they have always been struggling to improve their services and products, which has enabled them to improve their productivity and quality of their cuisines. In the long run, the company has greatly reduced costs. Its segmentation, for instance, has greatly enabled the company to improve the quality of its products (Cohen, 1998). The company has also driven out fear. The employees know what they should deliver, and they do it under minimum supervision. This has reduced instances where the employees brush shoulders with the management. Darden's Restaurants have also eliminated slogans and oppressive targets that force the staff to work towards achieving zero defects in their products. The management understands that such exhortations only serve to bring about adversarial relationships since the burden of low productivity and quality lies on the shoulders of the system and not the workforce (Cohen, 1998).

Even though the company has incorporated some of Deming's points, there is still much that needs to be done in order to make the company even more profitable. For instance, the business can make use of Deming's 13th point, which advocates for vigorous training and self-improvement programs for the employees (Cohen, 1998). Training programs can help the employees adapt to the ever-changing market demands, understand the customer needs and work to improve service delivery without lagging behind in the industry. The management should, therefore, increase the training programs for the staff, to keep them up to date with the current market trends. Also, Darden Restaurants should bring everyone in the company on board to help accomplish its transformation. This can be achieved by encouraging teamwork, where the members work together to achieve a particular task, and in the long run, achieve the company's transformation. Teamwork may also help in achieving Deming's 9th point, which is breaking barriers between the staff groups (Cohen, 1998). The employees working in design, research, production, and sales need to work as a team. By working in this manner, any problems that arise in the business setting can be solved in the shortest time possible. The management should also terminate the practice of awarding businesses tenders based on their price tag, but rather, minimize the overall costs. This can be achieved by maintaining a single supplier for an item, on a long-term basis by creating trust and loyalty (Cohen, 1998).

Ensuring Customer Satisfaction Through Segmentation and Specialization

Darden Restaurants has majorly invested in the segmentation strategy. Darden restaurants are strategic in targeting customers from different demographics so that they can achieve the increased market share levels that they currently enjoy. For such reasons, the restaurant CEO Clarence Otis explains that the success if his company are not due to chance or luck, but due to marketing intelligence and strategy (Kim & Singal, 2011). The company divides its market into various customer segments, which has proven to be very beneficial for various reasons that include reduction of costs and increased customer satisfaction. Instead of offering all kinds of foods under one roof, or rather marketing an all-inclusive menu to the target customers, segmentation helps to confine the customers to a definite group who enjoy a steakhouse atmosphere or an Italian meal (Kim & Singal, 2011). The market segmentation also gives room for new developments and tailored products. For instance, since the Italian restaurants appeal to the customers who enjoy Italian favorites like pasta, segmentation gives room to focus on such products, improve them and also introduce new items on the menu that are acceptable to the established customer base. It may not be a successful idea, for instance, to introduce pasta in a steakhouse environment. The segmentation also highlights the underserved markets (Kim & Singal, 2011). The restaurants are structured into various niches or themes, and it is able to target a geographic area that lacks a certain type of eating establishment. Darden Restaurants also reap segmentation benefits like focusing on achieving particular goals. Instead of struggling to provide all kinds of meals in a single restaurant, every partitioned restaurant focuses on a given strength, and this helps the restaurants stand out by offering a niche (Kim & Singal, 2011).

Successful Work Processes

The company has put in place feedback mechanisms as a form of successful work process. It has an integrated customer feedback loop which has enabled it to constantly acquire important information to assist in process improvement and ensuring customer satisfaction. This has also helped the company handle increased queries with increased efficiency and without increasing the staff expenses. The company has also incorporated employee engagement to improve process management. Having a high degree of employee engagement has enabled the production of the company to be successfully executes, defined, followed and improved.

Market segmentation is also among the successful work processes implemented by the company. One may argue that the chains are fancy, but basing the argument on the typical United States demographic via a macro lens, the Darden Consumers are generally higher-middle class (Ban, 2012). Even though the economic environment for the past few years has squeezed the customer budgets, the demand for the Darden chains has been maintained by the help of coupons, promotions and special meals. On the racial or ethnic spectrum, Darden Restaurants target the Pseudo-Italian, European-American and culturally-aware demographics by serving a fresh variety of seafood (fried and grilled), steaks which ignite the southern taste buds and an authentic Italian cuisine. The market segmentation of the restaurants does not just stop at the demographics as it also incorporates Lifestyle segmentation since every Darden chain satisfies a certain consumer behavior or taste (Ban, 2012). One of the most prominent lifestyles that it targets is the nutritionally-aware consumer who would consider the restaurants for their well-established wood-grilled seafood taste in its Red Lobster branch or the use of healthy olive oil at the Olive Garden among others.

How The Company Treats its Workforce

The values, mission, and vision of Darden Restaurants work to motivate the employees and improve job satisfaction. It is clearly evident that having a focused mission statement and cohesive company values are important in properly aligning the employees. Darden's commitment to its workforce is astounding. The management understands that for the company to attain both short and long-term goals, the workforce needs to be treated like the backbone of the business. Consequently, this year, the company purposed to invest about $20 million in its workforce. Consequently, the company's stock increased by 1.7% in the pre-market trading and is now approaching record highs. Also, due to the employee motivational and dedication, its stock has increased by 23% in a period of only three months (Ban, 2012). The CEO Gene Lee understands that the best investment that they can think of is investing in their workforce. He further adds that investing in the workforce will strengthen one of its most important competitive advantages, which is a results-oriented culture throughout the workforce. The management, as explained by the CEO, has a filter through which it runs every decision to ascertain that the company's team members win in every decision that is made. Then management then considers how the customers will win in the decision too (Ban, 2012). The employee retention rates of the company have not been affected by the tightening of the employment market. In fact, they have improved by a margin. The company has continually invested in its workforce. 50% of the company's management is sourced from within, which is a way of offering growth opportunities to the team members. The company is also working to create inclusive training programs for the staff so that they can be equipped with the tools of success that are in the modern market (Ban, 2012).

Top Quality Management Strategy

To ensure quality of management, Darden's has employed one of the best management tools, the EtQ Reliance Quality Management Systems. Darden Restaurants has made a brilliant choice to select EtQ Reliance to enable them to manage their compliance and quality efforts in the industry (Restaurants, 2006). Using the robustly integrated modules by EtQ such as Preventive action and Corrective Action will enable the chain of restaurants to automate their business...