Olive Garden: Success or Failure?

The restaurant industry has been struggling over the last couple of years and Olive Garden is no exception. Darden Restaurants, which owns Olive Garden, has been accused of bad management and distasteful food (Smith). In chapter one, we have learned in class about ten strategic decisions of operations management. Olive Garden has neglected most of these strategies.

The strategic decisions are as follows:

  •   Design of goods and services
  •  Managing quality
  •   Process and capacity design
  •  Location strategy
  •  Layout strategy
  •  Human resources and job design
  •   Supply-chain management
  •   Inventory management
  •   Scheduling
  •  Maintenance

One article that I read on CNN.com, proves that Olive Garden has neglected the first two strategic decisions by not defining the requirements of operations and neglecting customer’s expectations. Olive Garden’s food has been deteriorating in quality and critics say that “there are too many preservatives and artificial ingredients”. Olive Garden failed to provide higher quality to customers, hence why the company’s stock decreased by five percent this year.

Furthermore, Olive Garden lacked in its Location Strategy as well. Due to its low sales, Red Lobster was replacing Olive Garden, making the restaurant chain far from its customers. Not to mention that Olive Garden continued to raise its prices. It is evident that Olive Garden has not considered costs and other logistics.

Although I have never worked at Olive Garden, my sister has said that within the last year, the environment, food and service has changed tremendously. When my sister was first hired, they looked for employees that were motivated and had previous customer service experience. Now, many employees have quit because the company was unable to integrate each employees schedule with the demand that was needed on a specific day.  For example, on Saturdays they would be shorthanded, while on a weekday, there would be too many waiters working and shift was not evenly disbursed. This shows that Olive Garden’s Layout and Human Resource and Job Design Strategy was inconsistent because the company was not able to keep their qualified employees nor keep the “flow of personnel and information” steady. Furthermore, as the year continued, their inventory management was organized. My sister told me that there would be a surplus amount of breadsticks available for consumers, but when it came to certain entrees or desserts, the restaurant would be out of that particular product for weeks at a time.

Olive Garden is an example of another company that was successful a few years ago, but by not following the ten strategic decisions, the company’s consumer base, food quality and service decreased. Now, knowing some of the personal experience of working at the restaurant and what critics have written about Olive Garden, do you think that its operations is running smoothly? If so, why? In addition, if not, how do you think the restaurant can improve?