Business Strategy

Porters 5 Forces for Business Strategy

Olive Garden is an Italian cuisine restaurant that focuses on bringing customers high end food at an affordable price. They have a low risk level for their bargaining power of customers because majority of their food prices are either fixed or seasonal depending on the dish. The solution for this is that they offer affordable dishes as alternatives.

Their bargaining power of suppliers also has a low risk level because the cost of the food from the suppliers is usually fixed as well. What they do to fix this is create contracts with suppliers so that they can get the products at a discounted price in large quantities.

They have a medium risk level for rivalry due to the fact that there are many other restaurants in the area that offer high quality food at decent prices such as Red Lobster, Cheesecake Factory, and TGI Fridays. the way they stay above the competition is by offering seasonal promotions such as the endless pasta promotion or endless salad and bread sticks promotion.

The threat of new entrants risk is low because there are already several big brand restaurants in the area that bring a lot of competition. It would be hard for a new business to get customers in that environment. The longevity of Olive Garden and their good track record ensures their quality.

The threat for substitutions has a medium risk level because there are few groceries stores in the area where you can find the high quality foods that you would get from Olive Garden. It would be hard to replicate these dishes at home. They ensure customer loyalty by implementing VIP customer service to ensure satisfaction.

Competitive Strategy

Olive garden uses an industry-wide differentiation competitive strategy. In the casual dining industry, many restaurants don't take the time to ensure that each and every customer feels as if they're eating at a fancy, high class restaurant as Olive Garden does. Their goal is to provide casual dining in a high class environment. They pay close attention to details to ensure their customers get a warm and comfortable atmosphere. They use dark colors to create a feeling of comfort which encourages customers to stay longer. They also decorate their restaurants based on modern style buildings in Italy to make you feel as if you're actually eating in Italy. 

Value Chain

Olive Gardens inbound logistics are when they buy and receive their products(food) from manufacturers that they will use to sell to customers. Their operations logistics occur when they receive orders from customers and they prepare and cook the food to be served to the customers. The outbound logistics is when the food is made and the servers get the food from the kitchen and serve it to the customers. The sales and marketing logistics is when the server informs customers about the specials going on for the day or suggests a special or new wine to drink. Olive Garden also has a strong marketing presence on television or radios with their commercials informing about deals like their unlimited salad and bread-sticks. Lastly, their customer service logistics are when a customer has a question or concern with their food, the server can do their best to fix the solution or bring the food back to the kitchen for any adjustments. They also provide customer service through social media. On twitter, if someone tweets them with an issue, they almost always respond by apologizing for any inconveniences and giving a customer a link to report their issue so that they can find a solution for future references.