History
Olive Garden is a chain of the Italian restaurant founded under Darden Restaurant Inc., the restaurant unit of General Mills Inc. It started in 1982 in Orlando. It experienced rapid growth as there were over 100 restaurants by 1989. As of 2012, 45% of the total revenue by Darden Restaurant was attributed to Olive Garden. Today Olive Restaurant has over 800 restaurants all over the world. It is inspired by the Italian hospitality (Cinotto 254). The dishes offer an aspect of modern Italy, combining America and Italian dishes to make American-Italian cuisines. The chain of restaurants is well known for their exquisite award-winning wine list that keeps guests coming for more (Cinotto 254). The restaurant has exciting foods and drinks that are unique; thus making it special compared to other competitors.
Management strategy
In a Darden Conference in 2011, the management announced that it had plans to establish over 200 new Olive Garden restaurants to expand the chain. There are also plans to enter new countries such as Asia and Middle East. It is to capture the developing client base for Indian foods. The developed North American client base was to enable this expansion (Lewis 169). The idea of expanding their branches has been welcomed well throughout the world. This plan will make the restaurant huge profits since they will operate in a large market base.
For the past five years, it is clear that the business has received a wide range issues that are related to the improper management of the restaurant’s operations. There have been some strategic issues that are associated with the management aspect of the restaurant. Investors are seeking new ways of stopping their dismal performance. The hedge fund Barington Capital Group seeks to divide Darden Restaurant Inc. into three parts. The first part includes the falling Olive Garden and Red Lobster and the second include the rapidly growing restaurants like The Capital Grille and Longhorn Steakhouse. Barington Group assumes that by separating those from the main unit, Darden would have more chances of serving and growing.
However, this strategy makes Olive Garden cannot compete with the upcoming restaurants under Darden. There has been a decrease in the amount of revenue that Olive Garden produces over the last three-quarters. The amount of revenue that the new restaurants produce surpasses it by a large margin. Moreover, Olive Garden is losing money based on the one-year average same-store sales (BusinessNews).
*From BusinessNews
Olive Garden basically is defined an Italian type of restaurant as we can see through this restaurant brand history; however, it currently moves away from traditional Italian meal and turns out serving low-Italian-American type of food. One obvious example is Olive Garden serves lunch that is completely far from Italian meal, such as burgers and fries, heavy crèmes and more fried food. They are trying to make effort to enhance guest traffic at lunch; however, the truth is not too many customers would think about “Olive Garden Italiano Burger” when they plan to have burger for lunch.
-“BussinessBurger” did survey from one of the customers for Olive Garden.
Dom
“Olive Garden gets a burger, I don’t see that helping their sales. Maybe I’m wrong, but restaurant identity means something. When I get hungry and think burger I’m not going to think Olive Garden.”
12/31/2014
This is absolutely a wrong approach to win the guest traffic back. Olive garden management team should consider intensively what the authentic Italian roots is because the management decision is using unacceptable Italian ingredients, and does not promote wine with meals anymore. Even the servers at Olive Garden no longer encourage wine with lunch or dinner. Olive Garden management strategy is now in opposite directions from the first place; therefore, they must embrace its Italian roots to bring whole Olive Garden brand return to top of the Italian casual dinning industry.
Works Cited
Cinotto, Simone. Making Italian America: Consumer Culture and the Production of Ethnic
Identities. , 2014. Print.
Gaynor, Gerard H. Decisions: Finding Your Way through the Maze. Oxford: Wiley-Blackwell,
2010. Print.
Lewis, Pamela S. Management: Challenges for Tomorrow’s Leaders. Mason, OH:
Thomson/South-Western, 2007. Print.
“Olive Garden Turns to Burger to Bring Customers | βurgerβusiness.” Urgerusiness. 1 Dec. 2013. Web. 17 Apr. 2015. <http://burgerbusiness.com/olive-garden-turns-to-burger-to-bring-customers/>.
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