February 11, 2012
Porcini's Pronto - Harvard Business Case
What is unique about the “new” approach being considered and how does it tie in with the competitive advantage being sought?
Porcini’s “new” approach is unique both to Porcini’s and the restaurant business. Facing a saturated restaurant industry, Porcini’s is striving to differentiate their business by providing excellent quality food at moderate prices to customer’s looking for a quick eating experience. Great service is also expressed as being an essential item for success. Porcini’s feels that restaurants have been unable to accomplish these four functions into one experience. This strategy attempts to make the competition irrelevant. Porcini’s Porto creates a new segment outside of the three major segments: fast food, single location full-service restaurants and full-service chain restaurants. Porcini’s “new” approach creates a new uncontested market space (Blue Ocean Strategy, W. Chan Kim and Renée Mauborgne).
Any alternative means for a person to eat is Porcini’s competition. Porcini’s experience differentiates in an advantageous way from the three major segments. Porcini’s wireless technology creates a quicker eating experience for the customer that is not available at competitors in full-service restaurant chains. It’s also important that this innovative strategy does not decrease the value of the product/service offered. The project team identified fast food to be the primary competition. Porcini’s quick service is complimented by high quality food, providing a competitive advantage over restaurants in the fast food segment.
Porcini’s strategic focus on the employee hiring process and job satisfaction creates a team equipped with the talent and attitude to employ the strategic goals of the business. In order to provide high quality service, Pronto must employ people who can carry out the high expectations set by the project team. Pronto’s research on recruiting, compensation, training and retention has allowed for the company to recruit and hire high quality applicants and retain them through innovative employee benefits.
What are the critical outcomes that must be accomplished?
First and foremost, Porcini’s must execute the 4 functions discussed above into one dining experience. Porcini’s must leverage technology and develop a menu that aligns with their goal to provide a quick dining experience. Porcini’s menu must not only be prepared in a speedy fashion but must also align with the company’s high quality expectations. Employing the right people is a critical element to Pronto’s being able to execute their strategy. IT will be important for the company to execute their recruitment and retention strategies.
Porcini’s has elements outside of operations that play a critical role in the success of the business. The growth strategy the company decides to implement will play a significant outcome of the business. Each strategy, company owned and operated, syndicated and franchised all offer benefits and disadvantages. It’s important that the senior management team continue to explore alternative growth options before making any commitments. This decision alone could result in an unsuccessful venture. Employee engagement is a key business driver for organizational success. High levels of engagement in domestic and global firms promote retention of talent, foster customer loyalty and improve organizational performance and stakeholder value (Organizational Behavior).
Appling a “ Value Chain” analysis identify the pivotal talent pool and specify the critical role challenges for the talent pool?
Value Chain Analysis gives us an indication of what we need to do and where in order to achieve objectives.” Value Chain Analysis shows that technology development (ie. Wireless POS system) will be important for providing a quick dining experience. The company’s senior executives attributed “Porcini’s success to uniformly high-quality food and service at each location. Being that high-quality food and service are the two elements attributed to success, these are the areas in the value chain that Porcini’s should focus. These activities require hiring and retaining the right people. The value that Porcini’s provides through a quick, high-quality, great service dining experience differentiates itself from the competition. These activities all rely on excellent chefs and service related workers. The chefs and servers will be challenged to work in an environment that requires understanding of a more technical restaurant POS, a faster paced dining environment and working with customers who have an expectation of high-quality food. Fortunately, the company has implemented a hiring selection process and employee retention plan to overcome these challenges.
How will the innovative processes for selecting, appraising and rewarding employees support the talent pool in meeting the critical challenges?
Porcini’s innovative application process will result in the hiring of more talented, well-fit employees. The personality assessment test will help determine if the interviewee’s personal qualities are a match for the business. Research has found that there is a direct correlation between personality and job performance. Screening applicants to determine if the applicant has an upbeat attitude; good communicational skills; reliability; integrity; an ability to work well with others, and a positive attitude will be important and pay dividends (Organizational Behavior, Robbins/Judge).
Employee engagement is a key business driver for organizational success. High levels of engagement in domestic and global firms promote retention of talent, foster customer loyalty and improve organizational performance and stakeholder value (Leveraging Employee Engagement for Competitive Advantage: HR's Strategic Role Nancy R. Lockwood).
Porcini’s identified a great customer experience and absenteeism as being critical challenges. Job satisfaction can help in overcoming those challenges. Creating Job Satisfaction through effectively appraising and reward employees has been proven to translate to better customer satisfaction and less absenteeism (Organizational Behavior, Robbins/Judge). Porcini’s bonus paid-leave program has proved to provide value to both the business and the employee. The business benefits by reduced absenteeism and the employee earns additional paid vacation.
What is the potential impact on this relationship across the potential models of franchise, syndication or company owned stores?
The growth model Porcini’s chooses will have a huge impact on the financials, ownership and operational control. The “company own-and-operate” approach would give Porcini’s total control of the operations and customer experience,” but would most likely result in a slower roll-out and more financial commitment. This approach also presents the greatest profit margin. The company is exploring syndicating or franchising in order to grow at a more rapid rate with less financial commitment.
The key questions Porcini’s need to answer are: 1.) How important is brand recognition and what growth strategy aligns with this? 2.) Is the financial commitment risk worth taking on? “Why don’t we stick to what we’ve been doing so successfully?” If this venture fails and the company is unable to repay bank loans it could put their established business at risk. This should be carefully evaluated. 3.) How will the loss of operational control impact a franchise? Is there a way to minimize the lack of control? Company involvement in operations could benefit both the franchise and the company.