Calveta Dining Services

Fletcher Gardnier Wong Jia Chuin Chai Chin Ming

Samantha Low Jonel Chua

Harvard Case 2 : Group 2

Key Issues• Double revenues within 5 years

• Preservation of cost-control model

• Preserve company culture – pro-employee and employee growth and

progression

• Functional flexibility

• Reputation of quality food service

• Expanding into new segments to promote profitability

• Hospital segment

• Difficulty of integration into company culture upon acquisition of new business

• Retaining or improving customer loyalty

• Tradeoff between clients’ desire for consistency of staff and employee

progression

Define Calveta’s key success factors to date. What role (if any) have Calveta’s values played in

the organization’s success?

Question 1:

Grunert & Ellegaard (1992): key success factor is “a skill or resource that a business can invest in, which, on the market the business is operating on, explains a major part of the observable differences in perceived value and/or relative costs”

Antonio’s Way

• Antonio’s way, the seven core elements of values and desired behaviours• Quality, service, charity, education, respect, growth and

profitability• Certain key success factors are more important to the

industry in question• Most important elements: food quality, service and education

Cost structure • Cost-control model• Long term contracts• Demand for freshness

Financial strength • Cash flow management• No-debt philosophy

Customer Satisfaction• Continuous innovation and personalized service• Retaining customer accounts • Industry recognition

Employee Engagement and Satisfaction• HR culture

• Empowerment, engagement & motivation• Promotion from within• High retention rates

• Cost savings and success for organization

Emphasis on service and product quality

• High quality meals and service at lowest cost possible

• Strong customer loyalty• Value of key success factors depends on

changeability

Question 2:

•Calveta’s fifth goal is profitable growth. Goals one through four are more ethical in nature. Is goal five

inconsistent with the first four?

The Five Goals

1. Food

2. Service

3. Budgets and Innovation

4. Developing Employees

5. Growth

First Goal (Food)

• Inconsistent with growth• Unique serving of food

• Demands high quality and fresh food

Second Goal (Service & Budgets)• Consistent with growth

• Uses Cost-Control Models• Negotiate for the best prices

Third Goal (Innovation)

• Consistent with growth• Always coming out with new recipes and services

• Cleaning industry was harder to penetrate.

Fourth Goal (Developing Employees)• Consistent with growth.

• Aggressive management-progression structure• Offers educational programs/seminars/customized

programs

Fifth Goal (Growth)

• Overall consistent throughout the four goals

• Primary objective in an organization

• Can be achieved with the help of all the four goals.

Question 3:

What are the internal challenges and external threats that Calveta

is facing?

Internal Factor

External Factor

Negative

Positive

Strengths Weaknesses (Internal Weaknesses)

Opportunities Threats (External Threats)

• High set of values• Loyal Customers• Years Of Experience• Personalized Service• Well Define Niche• Focus on Employee

Development• HR System

• Improve Infrastructure Hospital Market

• Potential Takeover of GSD• Restructuring Organizational

Structure• Procedure to support growth and

address customer complains• Expand to other geographical

locations• Market share still available in

market (75%)

• Organization Structure- Unable to find growth strategy that fit core competency

• Market Share- Hindered due to lack of infrastructure

• Employees capability- decline due rising diversity

• Organizational Structure –Antonio’s Way at threat

• Financial resources – hinders growth – no debt philosophy

Macro-environment ThreatsPEST Factors1. Political2. Environment

al3. Social4. Technology

Microenvironment Threats

1. Customers

2. Competito

rs

Question 4:

How, if at all, should Calveta’s organization structure and practices be changed to

accommodate growth and effective communication, while maintaining the

company’s culture?

Company Culture

Calveta’s company culture revolves around Antonio’s Way• High Level of Personalised Service• Strong Employee Development Program

Managers were promoted from frontline employees• Retained Emphasis on Antonio’s Way• Allowed Strong Internal Communication

Calveta’s Growth

Two Factors have led to a breakdown in Antonio’s Way & Internal Communication

• Hiring Managers unfamiliar with Antonio’s Way• Viewing Transfers to large accounts as a promotion

Transfers

Calveta has promotion focused employee development plan leading to:

• Decreased Service Quality

• Inefficient Communication

• Loss of Customers

Link performance to pay, rather than account size

Internal Communications

• Ineffective communication is damaging growth and company culture

• Implement Briefing System• Increase opportunities for communication• Reduce the number of accounts per manager

Question 5:

Evaluate Calveta’s possible sources of future growth. Should Frank Calveta move forward with an expansion into

the hospitality sector? With the proposed acquisition?

Advantages of Hospitality Sector

• Fits the Core Competency of Calveta

• Vertically Integrated

• 75% of the market is still un-contracted

• Stable and sustainable growth

Disadvantage of Hospitality Sector

• Intensive Competition

• Possible reduction in market size

Advantages of GSD

• Expansion of geographic regions

• Ageing Demographic

• Potential clients accounts

Disadvantages of GSD

• High investment debts

• Risks

• Differences

• Time

• Effort

• Reputation

Conclusion

• Acquire GSD as it is unlikely for Calveta to

reach its goal of doubling their profits in 5

years if they were to go into SLF.

Questions & Answers

The EndThank You