Field Course: Challenges and Opportunities in the Restaurant Industry - Harvard Business School MBA Program

Field Course: Challenges and Opportunities in the Restaurant Industry

Course Number 6540

Senior Lecturer Lena G. Goldberg
Spring; Q3Q4; 3 credits
Wednesdays 3:30 to 5:30pm
12 classroom sessions
Project

Course Overview

This field-based course will examine the various forces that are changing and disrupting the restaurant industry and provide an opportunity for students to use all of the skills honed during the RC year while working on projects in conjunction with restaurant industry participants. Working in teams, students will be given the opportunity to self- organize their teams and to either select from a list of curated projects with an identified industry partner or subject to approval, propose and pursue their own project with an partner they have identified. Industry partners will include chefs, industry foundations and associations, food industry executives, industry analysts and entrepreneurs. A wide variety of projects will be proposed and considered. Central to all projects will be assessment, development and implementation planning to respond to challenges and take advantage of opportunities created by changes affecting and shaping the industry. In-class sessions will use a variety of materials including cases, analysts’ reports, industry association studies and white papers, as well as interviews with industry participants.

Background

Everyone eats out. 9 in 10 consumers say they enjoy going to restaurants and half of consumers consider restaurants to be an essential part of their lifestyle. Restaurants are large and important employers: 50% of adults in the US have worked in the restaurant industry at some point in their life and 1 in 3 Americans got their first job experience in a restaurant. Restaurants provide significant management opportunities for women and minorities: in 2014, 56% of first-line supervisors/managers of food preparation and service workers were women, 15% were African American, and 21% were of Hispanic origin. The number of women and minority owned restaurants has been steadily increasing.

Restaurants are also big business although approximately 70% of restaurants are single unit operations. The National Restaurant Association estimated 2016 restaurant industry sales at $782.7 billion, 4% of the US gross domestic product, with more than one million restaurant locations across the US, 14.4 million industry employees and a projected 1.7 million new restaurant jobs by 2026ii. Quick-Service Restaurants (‘QSRs’) otherwise known as fast food restaurants, generated approximately $198.9 billion in 2014 and were forecasted to exceed $223 billion by 2020.

The course will explore the demographic, life style, technological, labor, real estate development, and general economic forces that are shaping the restaurant industry. For example, the course will look at the competition created by supermarket prepared foods sections and corporate in-sourcing of catering, as well as the phenomenon of fast casual restaurants- a hybrid between fast food and casual dining restaurants and the industry’s strongest growing segment- that seek to offer more customized, freshly prepared, high quality food and more upscale ambiance, at higher price points, than traditional QSRs.

The “fast casual” boom has been attributed to, among other things: shifting consumer preferences toward healthier, sustainably grown and produced, locally sourced and freshly prepared foods; millennial preferences for informality, variety and authenticity; an increasing percentage of millennials’ food dollars being spent on restaurants; and heightened interest in and utilization of technology in all aspects of the restaurant business including supply chain management, food preparation (robotics), ordering, payment, marketing, carry-out, and delivery models. The course will also explore the impact of these factors on the industry in general and, in the context of increasing wage and occupancy costs in high-growth urban areas, attempt to assess the viability of fast casual as the number of new concepts and new entrants continues to increase.

Fine dining establishments will also be considered and projects may focus on developing creative approaches to the financial, marketing, and other challenges these restaurants face.

Learning Objectives

This course will provide students the opportunity to:

  • apply the diverse skills developed during the RC and first half of their EC year to analyze the relative importance and impact of these factors;
  • explore how established restaurants and start-ups in the “fine dining,” “family restaurant,” and QSR segments operate in and adapt to this fast-changing environment, focusing on differentiating between trendiness and fundamental changes that will be outcome determinative;
  • work across disciplines and prioritize approaches to planning and problem solving; and
  • work with industry participants on strategy, planning and problem-solving.

Course Requirements and Grading

Students will be expected to attend all classroom discussions and to spend the amount of time on their projects necessary to deliver a final presentation to their project partner. At the end of the course, all materials comprising part of the presentation will be submitted together with a summary and an assessment of the project. Grading will be based on these materials, class participation and peer and team member assessments.

Note the following general information regarding EC field courses: Due to the nature of some EC field courses students may be required to sign a legal agreement requested by project/business partner organizations. Additional requirements and documentation may also be requested of students by organizations. While students are typically not charged a course fee for taking an EC field course, it is possible that students will be responsible for minimal out-of-pocket costs (varies per course). Funding, however, is available for local travel to partner locations.