Darden Business Analysis

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  • Topic: Darden Restaurants, Brand, 2009
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Darden Case Analysis
February 14, 2010
Table of Contents

ORGANIZATION MISSION …………………………………………………………. 1

CORPORATE OBJECTIVES ………………………………………………………….1

Strategic objectives………………………………………………………………………1

Financial Objectives ……………………………………………………………………..2

CORPORATE-LEVEL. STRATEGIES……………………………………………….3

BUSINESS-LEVEL STRATEGIES ……………………………………………………4

EXTERNAL ANALYSIS ………………………………………………………………4

Opportunities…………………………………………………………………………….4

Threats …………………………………………………………………………………...7

COMPETITIVE ANALYSIS………………………………………………………….7

Five Forces Analysis……………………………………………………………………8

Key Success Factors……………………………………………………………………10

INTERNAL ANALYSIS………………………………………………………………11 . Strengths………………………………………………………………………………...11

Weaknesses……………………………………………………………………………...12

FINANCIAL ANALYSIS………………………………………………………………12

Ratio Analysis…………………………………………………………………………...15

STRATEGIC PROBLEMS……………………………………………………………16

LIST OF REFERENCES……………………………………………………………...17

Organization Mission

"Darden is the Company it is today because we place no limits on what we believe we can achieve. Like Bill Darden, Joe Lee and the others who founded our Company, we are willing to dream big dreams, and we are united by a strong, values-based culture." Clarence Otis, Jr.

Chairman & Chief Executive Officer
Darden Restaurants
Corporate Objectives

Strategic Objectives:

A. Brand Management Excellence: Given the challenging economic period, “brands matter more than ever.” Developing brands, and building brands, has occurred by forging a strong relationship among marketing and operations. Brand management excellence involves designing a brand promise and restaurant experience – around food, service and atmosphere – that is differentiated, compelling and relevant (1). While operation management is critical, Darden Company also see’s the need to focus on ensuring the “brand-builders” are available and skilled in the development of their particular brand.

Darden has a pronounced interest in developing its brands. With the long-term cost dynamics that currently exist, Darden Company understands the fact that the brand support provided must be even more cost-efficient and effective than ever. Through their own consolidation, certain duplicated brand support services will no longer be brand specific, but more “shared centers of excellence.”

B. Pursuing transformational initiatives: In an effort to reduce costs and improve effectiveness in a majority of the higher expense departments, Darden vows to reduce costs in areas of supply chain, facilities management, as well as energy and water utilization. (1)

“Given the competitive pressures, says Otis, it's more important than ever for the company's 180,000 employees to work collaboratively. Its three major brands should operate as test labs, sharing the best ideas and even personnel, while maintaining their distinctive identities. Nothing embodies Otis's vision for Darden better than its new headquarters, a $100 million state-of-the-art building in Orlando. More than 1,400 executives and restaurant support staff are scheduled to relocate there in October; until now, they have worked in 12 buildings spread out over 2 miles. In the new arrangement, the brands' test kitchens will operate side by side, to both practically and symbolically epitomize Otis's mandate for sharing.” (10)

C. Highlight the value offered to consumers: While many of Darden’s competitors are providing deep discounts, Darden has stood firm with providing value, not discounts. Darden’s CEO discussed the importance of customer value in his interview with USA Today, and explained his reason for standing behind the no discount motto.

While Applebee’s and Chili’s offers many of the two-for-twenty deals, Darden’s brands have been more interested in highlighting the value provided to their consumers. Otis reported that it would be simple enough to offer these discounts now, but...
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