Room for Dessert Case Summary

"Room for Dessert" Case Summary

Situation

This case presents a business plan for a startup company called "Room for Dessert" (RFD), which is a fine dining restaurant focused on serving a niche market that includes desserts and beverages such as tea, wine and spirits. RFD has created a business model which provides a strategy to differentiate itself from typical fine dining restaurants by offering an unpretentious atmosphere focused on serving affordable, high-quality desserts. The company expects to serve areas of high traffic, such as downtown Boston, and will target college graduates and professionals who earn a significant amount of income and enjoy socially interactive environments.

From a venture capitalist perspective, there are several appealing and unappealing markets for RFD:

Appealing Markets

• "Unconcerned consumers": those who generally not concerned with health and nutrition and therefore seek out decadent desserts

• "Vacillating consumers": those consumers who are moderately concerned with health and nutrition but are driven by taste when selecting restaurants

• "Upscale urban singles and couples without children": generally have sufficient income and white-collared occupations and are socially driven

Unappealing Markets

• "Committed consumers": those are remain health conscious; generally will not seek out bakeries and dessert-oriented restaurants

• Consumers with less disposable income: will not be frequent visitors to RFD as they will be more stringent on expenditures for luxury items

Complication

The underlying complications faced by RFD is how to capitalize on the opportunities they have identified as well as whether or not they should pursue each of the potential revenue streams. Like many entrepreneurs, the management of RFD has identified multiple solutions and potential sources of revenue; however, realistically, it is not possible to pursue every potential opportunity. RFD, therefore, must narrow their focus to the most profitable and reachable solutions.

The company has identified numerous opportunities for generating revenue, including:

• Restaurant sales

• Retail sales

• Special events

• Kiosks

• Catering

• Restaurant supply

• Catalogue sales