Earls Restaurant Ltd Swot Analysis

1. INTRODUCTION

The present case has, as it main objective, to assess Earls Restaurant LTD in its decision regarding the adoption of a measure that aims to make the chain of 66 restaurants to sell only humane beef raised without the use of antibiotics, steroids or hormones.

The decision was announced in April 27, 2016 and caused a strong negative reaction in Canada, especially in the province of Alberta where the restaurant was established and is based, as the move taken by the restaurant included a change in its beef suppliers, from Canada-based suppliers to a “Certified Humane” US-based ranch. Even though the policy of selling humane beef has a good appeal among the new generation of consumers, the change to an American supplier, due to the lack of certified humane Canadian suppliers, diminished the positive outcome of such policy.

In order to assess the on-going situation, the case is divided in two parts. The first part contains a SWOT analysis of Earls Restaurant LTD based on the information reported about the decision taken by the company and the short-term consequences of it as well as the market conditions of the Canadian Restaurant Industry. The second part aims to propose a solution to the decision-making problem faced by the company, which is: 1) Do nothing about the negative reaction and keep the humane beef policy as originally designed; 2) Go back to domestic sourcing and stop the implementation of the new policy; 3) Stick to the decision, but conducting adjustments to it.

1. SWOT ANALISYS

2.1 STRENGTHS

Earls has a long-standing reputation in offering the best food in quality and at the best prices since 1982. The core values of the company encouraged consumer loyalty and improved the brand. They took quality seriously, as this was most important among the customers; customers did not care about the price as long as it was quality.

Brand loyalty is one of the most important factors involved in the food service industry, particularly in the arena of franchising. Customers tend to develop a level of trust with a franchise, just as the non-millennials did. Canadians claimed Earls as their own especially the Albertans. They created a good relationship with their customers, took feedbacks seriously and acted upon it. Earls did not have any problem in capturing the market as they effectively addressed customer needs.

The company has a well-established logistics and supply-chain process, that works properly diminishing losses and assuring all restaurants in the chain get inputs efficiently. Besides that, Earls had a centralized decision making process, monitoring of customer relationship management, purchase of raw material was coordinated for the whole chain from the head office. Quality, consistence, logistics, and pricing are properly managed through consolidation, this enabled faster decision-making.

 Core-values and organizational philosophy toward its employees also play an important role in the Earls’ success. The company created a tight relationship with the employees, by promoting a learning culture, training and testing them in new situations. This helped create a family-like relationship; employees cooperate and think similar in terms of what is best for the company.