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Strategic Identification

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Strategy Identification Template MAN 374 Summer 2012

NAME: Last: Tamayo First:Fransisco

Link to Article (if available): http://www.businessweek.com/news/2012-07-02/darden-sees-olive-garden-red-lobster-making-new-revenue-retail

Strategy Article Illustrates: Concentric Diversification/ Market Development

What leads you to believe this is the strategy illustrated?
Both restaurants are known for their casual dining atmosphere in suburbia America. What a lot of people do not know is that the same company, Darden, owns these companies. The article states that the company will begin offering a both Red Lobster and Olive Garden under the same roof, a strategy often used by fast-food restaurant chains. This move leads me to believe that Darden is trying to implement a, much like their restaurants, a combination strategy. The new combination restaurant exemplifies the concentric diversification strategy by taking the two individual restaurants and evolving them under one roof. They will continue to capitalize on each of the restaurants specialties while minimizing the cost of two separate buildings. Additionally, they will use the strategy of market development to nicely complement concentric diversification. The article continues to explain that Darden has chosen to use the Red Lobster-Olive Garden restaurant fusion to reach potential customers that live in rural areas.

Why has the company decided on this strategy?
There are a few reasons why the company has decided to choose this strategy. The most obvious one would be to expand their market. The article makes the point that although Darden has “ advanced 11 percent this year” they still fall behind many of their major competitors such as BJ’s Restaurants and Texas Roadhouse Inc. The new consolidation of restaurants will allow them to reach beyond

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