Case Three: Restaurants

The restaurant industry epitomizes the monopolistic competition concepts we covered in class. Many still regard restaurants as risky endeavors, which only endure profits for short amounts of time. Review the seven websites/articles below and make your argument based on the prompts following the websites/articles.

Case Three: Restaurants

10 Reasons Restaurants Fail

https://www.thebalance.com/ten-reasons-restaurants-fail-2888628 (Links to an external site.)

The Biggest Mistakes Restaurants Make and Why They Have a High Failure Rate

https://blog.bodellconsulting.com/2008/03/29/the-biggest-mistakes-restaurants-make-and-why-they-have-a-high-failure-rate/ (Links to an external site.)

Why to Never Open a Restaurant

https://www.thrillist.com/eat/nation/why-to-never-open-a-restaurant-thrillist-nation (Links to an external site.)

10 Ways How Restaurants Failure Can Be Avoided

http://possector.com/management/restaurant-failure (Links to an external site.)

What Makes for a Great Restaurant Location?

http://restaurantengine.com/great-restaurant-location/ (Links to an external site.)

Food Network Chef Robert Irvine Shares the Top 5 Reasons Restaurants Fail

http://www.businessinsider.com/why-restaurants-fail-so-often-2014-2 (Links to an external site.)

Why Now is the Time to Open a Restaurant

https://www.entrepreneur.com/article/203700 (Links to an external site.)

Case Three Instructions

After reviewing these articles, please answer the following questions using multiple paragraphs to answer each question.

Drawing on the concepts covered in class regarding differentiation, how might restaurants seek to maximize profits?

Drawing on the concept of supernormal profits, what might be the reasons restaurants are able to generate supernormal profits (at least temporarily)?

Pretend you are opening up a restaurant. What would you do to ensure that your restaurant is profitable and does not fail by drawing on what we discussed in class and what you read in the articles above?]

Based on what your read and learned in class, discuss whether opening a restaurant is risky or worthwhile.

Case Three Breakdown

Defining and Discussing the Four Types of Product Differentiation (5 pts.)

Identifying and Discussing the Reasons for Supernormal Profits (5 pts.)

Presenting Entrepreneurial Ways to Ensure Profitability and Preventing Failure (5 pts.)

Judging Whether Opening a Restaurant is Risky or Worthwhile (5 pts.)