Ovation Brands Analysis Part 1
Lee Beck
Baker College of Jackson

Ovation Brands Analysis Part 1 “Herbs may be the spice to our food, but food is the spice to our life.” (Anonymous, 2011) These words shed a light on the effect of food in the modern world. Whether we are talking about freshly made macaroni and cheese from grandma’s pot, or a masterfully crafted risotto from a world famous chef, it cannot be denied that food is an important part of our culture. Companies such as Ovations Brands (known as Buffets Inc. until recently) have seen this truth and have seized the opportunity to make a living from this fact. Buffets Inc. was established in 1983 as Old Country Buffet according to their website. However due to several oversights in their business plans they have had trouble in years of late. In order to fully explain what the problem is, first one must be shown the specifics of the company in question. So this essay aims to set the groundwork by fully describing the internal environment of the company and then the external environment. In this situation we will be only referring to the components involved in the base level of the company rather than the management and corporate levels. Firstly, the most basic of internal components; the inputs. Some of the key inputs of Ovation Brands include uneducated labor, building space, and of course large amounts of food. There are of course other things that could be included in this list such as the grills and coolers and all the technical things needed to actually run a restaurant. Next in line are the Products the company produces. Ovations brands provide a dining experience for guests of all ages. They have been featured by Forbes magazine twice according to the history on their website (Ovations brand, 2013), once in 1999 as one of the top 400 performing businesses and as such can be considered to have quite a high production rate. The Cost of a meal at one of These buffets varies but according to an employee at the Old Country Buffet in Jackson Michigan, the cost of a meal can be anywhere from $8 to $15 per person depending on what time the transaction is made. (Cushman, 2013). The price elasticity of demand is difficult to calculate for this company as it is difficult to gather sales data for it. But according to the same employee “an increase of just a dollar or so to the prices doesn’t really seem to affect the customers willingness to pay very much” (Cushman, 2013) so we can at least conclude that the price elasticity of demand is not extremely high. Next in line are the Wages and Benefits of Employees. According to the Jackson, Mi. employee the wages of most of the workers varies from minimum wage to “possibly as high as 13 dollars per hour in rare cases” (Cushman, 2013). According to this Employee there are almost no benefits other than reduced price for meals unless you are employed full time by the Company which is extremely rare. The fixed Costs of a company of this type are pretty basic. They include wages, the building costs or leases, Electric bills and other basic upkeep costs. The variable costs are also pretty basic and would include the food costs, repair costs, and the occasional lawsuit over possible health issues with the food or environment. When asked how the company develops new products and services the earlier mentioned Employee conveyed that The company is frequently switching aspects of their Menus in order to develop the most wanted products for their customers as well as coming up with new layouts for the products to better attract consumers. When asked how the company diversifies its operations the Employee conveyed that the parent company simply opened up multiple types of buffets in order to have the biggest variety that they could. Now that the internal components of the company have been described it is time to move onto the external components including their biggest competitors, weaknesses, strengths, and threats to their business. According to Hoovers database (Hoovers, 2013), Buffets Inc. (now Ovation Brands) 3 top competitors are Cracker Barrel Old Country Store, Inc., Denny’s Corporation, and Golden Corral Corporation. Out of these three only Golden Corral stands as a buffet style restaurant and as such is Ovation Brands biggest competition. However, according to the same database, Buffets Inc. is the largest operator of buffet-style eateries in the US so it is clear that the competition has not surpassed Ovation Brands. When asked what the company’s biggest weakness in comparison to competitors was the Old Country Buffet stated that several customers have said that Golden Corral’s food quality is of a higher quality than that of Ovation Brands. However, as earlier stated, one of the strengths that Ovation Brands features is that it is continuously moving towards optimizing their menu for consumer satisfaction. Finally, some of the external threats of Ovation Brands’ are as follows; economic instability, competition, and minimum wage increases. Economic instability would cause for consumers to be less likely to spend money on products and services provided by this company and are of course of pressing concern. The competition is always a threat in any business and so Golden Corral lies at the center of the attention for Ovation Brands when they are considering their threats. Furthermore, the minimum wage or slightly above is where many of Ovation Brands’ employees’ salaries rest at. As such, an increase in the minimum wage would cause for a huge loss of profit for this company if not simply bankrupting them and so is a very large threat for Ovation Brands. According to Ovation Brands own website (Ovations, 2013) and Hoovers dataset (Hoovers, 2013) they have gone through Chapter 11 bankruptcy at least twice and so it is clear that these external threats are a very serious problem for them.
In Summation, the internal components such as the inputs, prices, wages, and costs have been covered as well as the External components. These included some of the competitors, weaknesses, and strengths of the company. After reviewing these components it is possible to see that the company is strong, though is always on the verge of collapsing into bankruptcy as it has already done on multiple occasions.

Resources
Cushman, J. (2013). Interview by L. Beck. Interview of old country buffet employee
Hoovers. (2013). Buffets, Inc. company information. Retrieved from Hoovers Database
Ovation Brands. (2013). History. Retrieved from http://news.buffet.com/about/history