Room for Dessert & Case Summary
Situation
This case presents a business plan for a startup company called "Room for Dessert" (RFD), which is a fine dining restaurant focused on serving a niche market that includes desserts and beverages such as tea, wine and spirits. RFD has created a business model which provides a strategy to differentiate itself from typical fine dining restaurants by offering an unpretentious atmosphere focused on serving affordable, high-quality desserts. The company expects to serve areas of high traffic, such as downtown Boston, and will target college graduates and professionals who earn a significant amount of income and enjoy socially interactive environments.
From a venture capitalist perspective, …show more content…
Resolution
In order to capitalize on the opportunities presented, I think the company should follow a more narrow-scope approach in order to capitalize on the potential sources of revenue. In short, the company should place nearly all of its focus on creating a strong brand image to drive restaurant sales, which appears to be the most significant source of income. Since desserts and the type of beverages served present high gross margins, the company should be able to generate a sufficient amount of income through restaurant sales.
After illustrating the potential revenue streams presented by RFD, we can analyze the strengths and weaknesses of the business plan.
Strengths of the plan
• RFD has considered and accepted a number of risks faced by the business and the potential harmful effects each of the risks may create
• The plan clearly illustrates key aspects of operations for the business as well as marketing strategies they plan to pursue
• RFD has successfully analyzed the industry it will play a role in, acknowledging the somewhat unattractiveness of the industry (high buyer power, low barriers to entry, intensifying competition), but explaining the prospect of a successful niche strategy, which they plan to pursue
• The plan exemplifies a strong understanding of the potential market for the company and the target market appears to be large enough to generate sufficient profits
Weaknesses of the plan
• The