International Strategic Management (MGT5182) Tutorial 2

Case: G12 Restaurant: Rethinking the Business Model

Established in 2006 by brothers Jack and John Byers, G12 is a restaurant in Glasgow's vibrant West End (the name G12 was chosen by the founders in an analogy to one of the postcodes of Glasgow's West End). The restaurant offers to bring fresh and unusual ideas to modern Scottish cooking, and it is committed to using seasonal and local produce. G12 has established itself as a much-loved neighbourhood favourite with a reputation for high-quality food, friendly service and great value.

For many years, G12 has enjoyed a strong position, but it is now facing a major strategic challenge: adapting to a changing world as a result of the coronavirus (COVID-19) pandemic. The pandemic had a significant impact on the restaurant's business model. Because of the lockdown, G12 cannot welcome customers to its restaurant anymore, and even if restrictions are lifted, the small size of the restaurant will make social distancing between guests very difficult, if not impossible.

"We have an excellent reputation and value our customer relationships but face some difficult choices and need to adapt our business model quickly", commented co-founder Jack Byers. His brother John further explained, "as a small restaurant with a kitchen crew of only four, we won't be able to scale like a fast-food-business [...] I also want us to maintain a position where we can still offer an exciting and unique dining experience."

At the beginning of the pandemic, the brothers are asking themselves what G12's new business model should look like: One option is to move towards a ready-to-eat delivery model where food is ordered online and delivered through firms like Deliveroo or Uber Eats. Another option is to move towards a new home dining model, where G12 prepares oven ready food with clear heating instructions enclosed that can be ordered online and collected at the restaurant by customers. Another is a hybrid between the two, with G12 only delivering in a 3-mile radius around the restaurant, thereby being able to maintain a relationship with its customers (a knock, drop and greet method).

Questions

Using relevant business model concepts, compare and contrast G12's traditional business model with alternative business models. In your discussion, consider advantages and disadvantages associated with each model and then evaluate what model G12 should implement.

The adaptation of an existing business model is a challenging task. Critically discuss what strategic and operational challenges G12 faces and what capabilities it may require to successfully manage the transition towards a new business model under the uncertain business environment.