Red Lobster
Group 8
Simran Shukla
Tanvi Sovani
Tushar Pilania
Swathy K S
Shruti Sharma
Shubham Vyas
BACKGROUND
On March 22, 1968, Bill Darden saw an opportunity to
serve affordable, high-quality seafood and built red
lobster.
Red lobster is the largest national full-service casual
dining chain; the chain is struggling for years to
provide the best food quality.
In 2009, it was estimated that Americans spend
about 40% of their food dollars away from home in
restaurants.
Among 8000 casual dining seafood restaurants in
u.s., red lobster's market share was the highest at
43%.
In 2004 Lopdrup saw immediate opportunities for
improvements and launched three phased plan
Decision problem
If Red Lobster gains 2,000 new experiential customers, losing 2,000
indulgent customers and frugal customers..
Unable to re-position Red Lobster as a company
Improve Restaurant Atmosphere
Create New Managerial System
Alternatives
Continue with
current offerings Tailoring offerings
while attracting for experientials
experientials segment
segment
Continue with current Tailoring
offerings while attracting offerings for
experientials experientials
Pros Pros
affordable+freshness had proven to be Best customers for a casual dining
successful chain
guest satisfaction was up 14% since Profitable as more likely to order
2004 desserts, appetizers, wine
Red Lobster considered above industry Less price sensitive
average Upside potential significant if this
Chain was outperforming competition segment is expanded
(Knapp-Track) Cons
Positive media attention Alienating segments seeking classic
increased market share and profitability food
by targeting 4 segments altogether Few success stories of changing
Cons consumer base in a quick manner
Letting go of opportunity to make more Lose loyalty of current customers
profits
Evaluation of alternatives
5C
COMPANY -RED LOBSTER
RED LOBSTER is the largest full-service casual dining chain in the United States. KIM LOPDRUP
is the restaurant's CEO and has spent 25 years in the restaurant industry. Seafood, chicken,
steaks, pasta, etc. are served.
CUSTOMER
40% Of Food Dollars Spent By American Consumers Are Spent Away From Home, With The
Majority Spent In Quick Service Restaurants.
COMPETITION
1..APPLEBER'S 2..OUTBACK STEAKHOUSE 3.OLIVE GARDEN
COLLABORATORS
·VERIFIED DAY-TO-DAY RAW MATERIALS PROVIDER
·Include the downstream and upstream partners in the value chain.
CONTEXT - PESTEL
Political Factors Technological Factors
Government contributes to human resource & Taiwan manufacturers depend on
technology development technology
Policies for recruitment of high-tech talent Foreign governments reluctant to
introduced transfer technology
R&D efforts have been a priority since 2000
Environmental Factors
Economical Factors Highly favorable region for DRAM
Unbalanced demand and supply manufacturing
Price lower than the cost of DRAM Offers ease in capacity expansion
Improvements in efficiency levels can lead to
excess supply Legal Factors
Closure of firms because of low revenue Protection through IP rights
Limitations through contracts
Social Factors
Human capital development is a major focus
The training aimed at increasing knowledge of
resources
Recommendations
Remodel, but keep the old style intact. Some
consumers believe the restaurant may be
going in the wrong direction, becoming too
sophisticated.
Implement new seafood cooking strategies
periodically as seasonal promotions so that
consumers are not overwhelmed with too
many new "freshness" innovations
Find a way to better create campaign ads for
the psychographic segments
