Red Lobster Case Study

History:

Red Lobster is one of America’s oldest and largest national full-service casual dining chains. As a young teen, William Darden founded the first Red Lobster in 1968 in Lakeland, Florida and today, there are nearly 700 Red Lobster’s restaurants throughout the country. In 1970, the chain was sold to General Mills, but Darden was kept on as president. Five years later in 1975, Joe Lee, General Manager of the first Red Lobster restaurant, took over as president. Twenty-nine years later, Kim Lopdrup took over the presidency in 2004.

In general, the casual dining industry was hit hard by the recession of 2008-2009. Lopdrup saw immediate opportunities for improvement and he felt that a major change in positioning was needed. He stated, “We knew we had to change perceptions and reposition Red Lobster in the consumer’s mind from frozen to fresh.” The portrayal of the entire establishment was changed. The menus, the interior and exterior of the building, and purchasing habits were adjusted to facilitate the change. Lopdrup launched a three phase plan that, in his mind, were critical for changing consumer perceptions.

Three-Phase Plan:

Lopdrup created a three-step plan which would result in the reinvention of Red Lobster. The first step was “operational excellence”. The purpose of this step was to establish a “Fresh, Clean, Friendly, Full” atmosphere. To establish the freshness, all of the cooking equipment was rectified to ensure the correct cooking temperatures were met for the right entrees. To ensure the cleanliness, certain odors were tracked down and eliminated and all restrooms were redone. There was a greater focus on hiring and training of the staff to emphasize the friendliness which was considered the most important service attribute. The last quality was handed by hiring more bussers who were staffed during peak hours which decreased the time spend resetting and turning tables. The meal pacing system was also computerized which recorded synchronized cook times for each item in an order so the meal can be served as soon as it was prepared. These small steps changed the daily operation of Red Lobster.

The next step was “re-positioning around ‘freshness’”. In order to execute this portion of his plan, Lopdrup hired a new culinary team, developed a new menu around freshness, and changed cooking platforms. The two main changes that took place were the introduction of the wood-fire grill and the daily menu. A survey which was done by an outside firm showed that consumers prefer wood-fire grilling over every other method of cooking fish. With the addition of a wood-fire grill at Red Lobster, five Grill Master positions were established. These individuals improved the quality and attention to detail. This, however, was only the first step. The next part of this phase was changing the appearance of the menu. Though