Darden Restaurants
Abstract When evaluating a firm, several factors must be determined to make an educated decision to invest in the company or not. Darden Restaurants is the world’s largest full service restaurant chain and offers many competitive advantages. During the current economy, many firms are closing their doors and turning to other forms of work. Darden’s economic trends and strategies are discussed and also the tactics to achieve these strategies. Darden has an excellent human resources department and the managers within this department are some of the best in the industry. They play an integral role in helping Darden continue to be successful. Examining Darden’s financial statements is a superior way to see if they are creating value. Darden is a solid company all of the way around, and they are creating a great culture to work in.
Economic Trends It is no surprise to anyone that the economy has declined over the last three years, but this is no reason to give up and shut down. Consumer spending has decreased because jobs are paying less and there is “too much month at the end of the money.” In turn, more people are filing bankruptcy and collection agencies are booming. This is proof that not every industry has tanked completely. There will always be work in the world, it just depends on where the economy is and which markets are booming, not busting. Darden Restaurants has been around for 17 years (Darden, 2012) and has seen its fair share of recessions and booms. There are strategic advantages to both, but just like in every business, Darden must deal with them both. According to CNN Money (2012), Darden Restaurants (stock symbol DRI) has shown an increase in net profits for the last five years. This includes revenue decreasing slightly in 2010, but net profit still increased over the previous year (CNN Money, 2012). The decrease of labor cost is where they made up for lost ground. This proves that just because revenues are down, there
Economic Trends It is no surprise to anyone that the economy has declined over the last three years, but this is no reason to give up and shut down. Consumer spending has decreased because jobs are paying less and there is “too much month at the end of the money.” In turn, more people are filing bankruptcy and collection agencies are booming. This is proof that not every industry has tanked completely. There will always be work in the world, it just depends on where the economy is and which markets are booming, not busting. Darden Restaurants has been around for 17 years (Darden, 2012) and has seen its fair share of recessions and booms. There are strategic advantages to both, but just like in every business, Darden must deal with them both. According to CNN Money (2012), Darden Restaurants (stock symbol DRI) has shown an increase in net profits for the last five years. This includes revenue decreasing slightly in 2010, but net profit still increased over the previous year (CNN Money, 2012). The decrease of labor cost is where they made up for lost ground. This proves that just because revenues are down, there
References: CNN Money. (2012). Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/10394.html Conlon, F. (2011, April). Professional and Business Services: Employment Trends in the 2007-09 Recession. Monthly Labor Review, 134(4), 34-39. Darden. (2012). Retrieved from http://www.darden.com/about/faq.asp+ McHugh, J. M., McHugh, S.M., & Nickels, W.G. (2010). Understanding Business (9th ed.). Poter, M. E. (2008, November). Why America Needs an Economic Strategy. Business Week.