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Andrew Madsen looked out the window and pondered over the strategic direction of his company.
It was September of 2013, and the president and chief operating officer of Darden Restaurants Inc. was
looking back on 2012—the first year his company had not outperformed its competitors. Following the 2008
financial crisis, consumers with less discretionary income were, more often than not, dining at home. Darden
Restaurants had become a successful business based on selling its customers an experience, and previously
those experiences had allowed the company to weather difficult financial times.
Madsen wondered which short-term strategy would allow the company to maximize shareholder value
through operational excellence. He also thought about the long-term opportunities from innovations that
were complementary to Darden’s core competencies. He tried to determine which strategies would help
Darden to compete in a changing demographic landscape, shaped by coming-of-age millennials and the
cultural changes brought about by an influx of Hispanic and Asian consumer immigrants. He was also
concerned with new forms of competition, such as quick casual restaurants like Chipotle, where consumers
pressed for time could get food made with quality ingredients in a fraction of the time they would spend at
an Olive Garden or Red Lobster.
With a national War on Obesity under way, the company had faced some pressure from regulatory
agencies and consumers to divulge caloric and sodium content, and to stop using trans fats. With less
discretionary income and a trend toward healthier recipes, consumers had begun buying healthy lunch- and
dinner-to-go at supermarkets like Whole Foods, or buying the ingredients to make the meals themselves.
Madsen thought about the strategic implications of changing consumer preferences and the intersection of
public policy and business.
He and his team would have to come up with strategies to address each of these issues at the next board
meeting, and time was running out. The board meeting in which he would lay out the company’s strategies
for the next five years was in two months. DO NOT CO
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