Case study No. 1 Service Setting

Fine Dining at the Silver Slipper

After profitable careers in the stock brokerage industry, Fred and Song Yi attended Chef Elmo's School of Culinary Arts. When they graduated, they fulfilled their dream of many years: They opened their own fine- dining restaurant, The Silver Slipper.

They found a building in what they concluded was an excellent location. It had originally been a Denny's Restaurant. The next owner, Bella Starr, had converted the family restaurant into a steakhouse, the Tombstone Restaurant and Saloon. She left most of the Denny's decor intact but superimposed on the interior the rough timbers and boards that Americans have come to expect in their western steakhouses.

Buying the Tombstone Restaurant and Saloon used up a large chunk of Fred and Song Yi's available capital. They decided that since their focus was to be excellent food, they would invest the rest of their funds in an up- grade of the kitchen. They patterned their kitchen after the model fine-dining kitchens at Chef Elmo's School. The couple realized that the dining area needed refurbishing and upgrading, but they couldn't do everything at once. They decided to struggle along with the vinyl upholstery, plastic furnishings, and rough-hewn timbers and boards until their superb meals had generated some profits. After all, guests came to a fine-dining restaurant for fine dining, not for the decor. They knew that some of Europe's finest restaurants, with the highest prices, were simple and basic almost to the point of bareness. They had graduated at the top of their culinary class, had served apprenticeships at excellent restaurants, and knew they could provide tastier culinary creations than any other chefs in town.

The big night came; Fred and Song Yi were open for business! Their reputations as trained chefs had preceded them, and many guests arrived in response to the excitement created by the new fine-dining opportunity. Fred and Song Yi received many compliments on the excellence of the food. But more than a few guest comment cards also referred to how expensive the meals were.

Although comments on the food continued to be highly favorable, the crowds of diners began to dwindle as the initial excitement wore off. Within a few weeks, though the small numbers of diners still willing to pay premium prices continued to rave about the food, Fred and Song Yi saw that they had to do something or they weren't going to make it. Song Yi even had to begin selling mutual funds on the side.

Fred wrote a letter to Chef Elmo, asking him for ad- vice. Chef Elmo offered to "help out in the kitchen" for a weekend, after which he would give his frank opinion as to how Fred and Song Yi should proceed.

1. What do you think Chef Elmo will tell Fred and Song Yi is wrong with their new business endeavor?
2. What advice do you think he will give them?