Case Study: 1) Analysis of cases background data and factors affecting the situation. 2) Recommend viable strategies/solutions to resolve the case problem.

8. Carmine's Italian Restaurant Rita Carmine, the owner and manager of Carmine's Italian walls of surfwood, installed plumbing and electrical fixtures, Restaurant, is reviewing the slow growth of her restaurant. She's added an extra washroom, and purchased the necessary restau also thinking about the future and wondering if she should rant equipment. All this cost $240,000-which came from her change her strategy. In particular, she is wondering if she should own cash savings. She then spent an additional $3.000 for glass join a fast-food or family restaurant franchise chain. Several are ware. $4.000 for an initial food stock, and $4,250 to advertise located near her, but there are many franchisors without local the opening of Carmine's Italian Restaurant in the local news restaurants. After doing some online research, she has learned paper. The paper serves the whole metro area, so the $4.250 that with help from the franchisors, some of these places gross bought only three quarter page ads. These expenditures also $500,000 to $1 million a year. Of course, she would have to fol- came from her personal savings. Next she hired five waitresses low someone else's strategy and thereby lose her independence. at $550 a week and one chef at $1.100 a week. Then, with a which she doesn't like to think about. But those sales figures do $48.000 cash reserve for the business, she was ready to open. sound good, and she has also heard that the return to the Reflecting her sound business sense, Rita knew she would need owner-manager (including salary) can be more than $150.000 a substantial cash reserve to fall back on until the business got per year. She has also considered creating a Facebook page for on its feet. She expected this to take about one year. She had no Carmine's Italian Restaurant but is not sure how that will help. expectations of getting rich overnight. (Her husband, a high She knows people go to Carmine's web page for directions and school teacher, was willing to support the family until the res to see the menu-but why might she need Facebook or some taurant caught on.) other social media? The restaurant opened in April and by August had a weekly Carmine's Italian Restaurant is a fairly large restaurant- gross revenue of only $4,800. Rita was a little discouraged with about 3,000 square feet-located in the center of a small shop this, but she was still able to meet all her operating expenses ping center completed early in 2013. Carmine's sells mainly without investing any new money in the business. She also got a full-course "homecooked" Italian-style dinners (no bar) at mod- few good customer reviews on Yelp. By September business was erate prices. In addition to Carmine's Italian Restaurant, other still slow, and Rita had to invest an additional $6,000 in the businesses in the shopping center include a supermarket, a hair business just to survive. salon, a liquor store, a computer repair business, and a vacant Business had not improved by November, so Rita stepped up space that used to be a hardware store. The hardware store her advertising-hoping this would help. In December, she failed when a Home Depot located nearby. Rita has learned spent $2,400 of her cash reserve for radio advertising-10 late- that a pizzeria is considering locating there soon. She wonders evening spots on a news program at a station that aims at how that competition will affect her. Ample parking space is middle-income America. Rita also spent $1,600 more during available at the shopping center, which is located in a residen the next several weeks for some Google Local advertising. tial section of a growing suburb to the east, along a heavily trav By April 2014, the situation had begun to improve, and by cled major traffic route. June her weekly gross was up to between $6,100 and $6.600. By Rita graduated from a local high school and a nearby univer March 2015, the weekly gross had risen to about $8,400. Rita sity and has lived in this town with her husband and two chil increased the working hours of her staff from six to urs dren for many years. She has been self-employed in the restaurant a week and added another cook to handle the increasing num. business since her graduation from college in 1998. Her most ber of customers. Rita was more optimistic for the future be recent venture before opening Carmine's was a large restaurant cause she was finally doing a little better than breaking even. that she operated successfully with her brother from 2004 to Her full-time involvement seemed to be paying off. She had not 2010. In 2010, Rita sold out her share because of illness. Follow put any new money into the business since summer 2014 and ing her recovery, she was anxious for something to do and expected business to continue to rise. She had not yet taken any opened the present restaurant in April 2013. Rita feels her plans salary for herself, even though she had built up a small surplus for the business and her opening were well thought out. When of about $18.000. Instead, she planned to put in a bigger air she was ready to start her new restaurant, she looked at several conditioning system at a cost of $10,000 and was also planning possible locations before finally deciding on the present one. to use what salary she might have taken for herself to hire two Rita explained, "I looked everywhere, but here I particularly no new waitresses to handle the growing volume of business. And ticed the heavy traffic. This is the crossroads for three major in- she saw that if business increased much more she would have to terstate highways. So obviously the potential is here." add another cook Having decided on the location, Rita signed a 10-year lease Evaluate Rita's past and present marketing strategy. What with the option to renew for 10 more years, and then eagerly should she do now? Should she seriously consider joining some attacked the problem of outfitting the almost empty store space franchise chain? in the newly constructed building. She tiled the floor, put in