Darden Analysis

Memorandum

To:        Professor Robert Atkin

From:        Shan Doshi, Matt Gillespie, Tyler Hoffman, Kelsey Jusczak, Jami McMillen, Briana Mehle, and Macey Zaffina

Date:   December 3, 2013

Re:        Daraden Restaurants draft, 3:30pm section

Attached is Deliverable #3 for our team’s report on Darden Restaurants. All of the authors listed above are enrolled in the 3:30pm section of the course Managing in Complex Environments.

To the best of our knowledge, the following report to is compiled from the most accurate available information. Detailed segments composed from each author are systematically arranged into this final comprehensive report. Our team thoroughly explored evidence to address a specific objective in the report. We sincerely appreciate all of your past feedback and thank you in advance for your time and efforts.

Feedback should be directed to Tyler Hoffman (Tgh16@pitt.edu), our contact person. If necessary, he can be reached at (724) 961-4809

[pic 1]Shan Doshi

Spd32@pitt.edu

(908) 642-8475

Financial Performance

Matt Gillespie

Mag243@pitt.edu

(717) 623-3132

Future of the Firm

Tyler Hoffman

Tgh16@pitt.edu

(724) 961-4809

Transmittal Memo, Cover Sheet, Executive Summary

Kelsey Jusczak

Kaj48@pitt.edu

(724) 312-5995

Corporate Social Responsibility

Briana Mehle

Blm98@pitt.edu

(610) 858-6129

Marketing Performance

Jami McMillen

Jlm335@pitt.edu

(303) 709-8938

Introduction, General Background, Business Themes

Industries, Business, Business Units, and Product Lines

Macey Zaffina

Mmz9@pitt.edu

(412) 848-5302

Operations Performance

EXECUTIVE SUMMARY

The objective of this report is to evaluate Darden’s likely future success while determining whether or not it will continue to keep its market share of the chain restaurant industry.

For reasons understood in the coming pages, Darden will stay competitive in its industry due to a specific niche market for their product. There is no other large player in the industry that offers genuine southern hospitality at a reasonable price. Additionally, Cracker Barrel’s impeccable e-commerce presence allows for it to be accessible at any hour of the day to anyone in the world. Having said that, there are substantial hurdles for Cracker Barrel to jump through, including their recent sexual equality fiasco, in order to preserve the overall brand image of the company. Because of the above factors, Darden will continue to diverse their industry portfolio, through expanding into global markets. Additionally, through product development and promotions, Darden will increase its target market to entire communities, in addition to its current target market of family dining

 Findings:

• Though the chain restaurant is not very attractive, Darden has differentiated itself nationally as a firm offering unique family dining atmospheres in its many different style restaurants.
• Due to the recent economic downturns, the usual business model of the chain restaurant has been replaced by a model that is heavily weighted on providing low cost meals, as opposed an experience based model.
• Darden has been named one of the 100 best companies to work for in America.
• It takes pride in the amount of diversity among employees.
• Darden has been diversifying its menu by continually appealing to customers’ seasonal and health demands.

Please note:  We center these conclusions on our investigation of public data as interpreted by business students with minimal knowledge of the industry and with little education in the central areas of business.  

INTRODUCTION

Darden has become the largest full-service restaurant firm in the world with over 2,100 restaurants through subsidiaries. The firm focuses on constructing enduring brands by creating a relationship with consumers, providing a welcoming and naturally hospitable environment. The company owns and operates a collection of some of the most prosperous and recognizable brands including: Red Lobster, Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V's and Yard House. All of their restaurants in the United State and Canada are solely owned and operated by the firm. Although Darden does not franchise in the United States and Canada, as of May 27, 2012 there are 28 restaurants owned by independent third parties outside the United States and Canada. Primarily, the firm endeavors to deliver a particular experience at each restaurant brand with an exceptional dining environment that provides much more than simply “fresh, delicious food at an affordable price.” The following report provides a comprehensive inquiry of the firm, its performance, and a forecast of the likely future of the firm. The objective of the report is to analyze the systematic elements and functions of the industry, assess the market share and to forecast the probable ventures of globalization of Darden brands. This analysis is consecutively organized into the following sections: General Background, Business Themes, Industries, Businesses, Reportable Segments, and Product Lines, Market Performance, Operations Performance, Financial Performance, Corporate Social Responsibility, and Future of the Firm. The portions of this report provide accurate information compiled from a variety of credible sources. These sources are referenced in the text by endnote superscripts that directly correspond to the numerical values in the Reference section, found at the end of the report.

GENERAL BACKGROUND

In 1938 Bill Darden opened his first business in Waycroos, GA at the age of 19. Thirty years latter, 1968, Darden established the first Red Lobster in Lakeland, FL. Mentored by Bill Darden, Joe R. Lee became president of Red Lobster in 1975. Lee would become the first Chairman and Chief Executive Officer twenty years later. Over the next 37 years Darden would continue to expand its brand line, accumulating The Capital Grille in 1990, Bahama Breeze in 1996, YardHouse in 1996, Eddie V’s Premium Seafood in 2000, the grill company Seasons 52 in 2003, and LongHorn steakhouse and The Capital Grille in 2007.