Case Study : Darden Restaurants Inc.

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Darden Restaurants Inc., is a multi-brand restaurant operator headquartered in Orlando, Florida. Its founder, Bill Darden at the age of 19 opened his first restaurant called The Green Frog in 1938 in Waycross, Georgia. Bill Darden sold his company to General Mills in 1968 after the opening of the first Red Lobster Restaurant in Lakeland, Florida. By 1995 the two companies had split and Darden Restaurants Inc. was born as a publicly traded company on the New York Stock Exchange. Darden Restaurants Inc. has become a Fortune 500 company with over 2,100 restaurant locations and more than 200,000 employees. It is considered to be the world’s largest full-service restaurant company.
II. Industry Analysis:
Darden Restaurants, Inc. is a leading full-service restaurant company and is considered to be the largest restaurant company in the Chain Full-Service Restaurants industry (NAICS 72211a). This industry comprises chain and franchised restaurants engaged in providing food services to patrons who order and are served while seated (i.e. waiter or waitress service) and pay after eating. These establishments may provide these types of food services while selling alcoholic and nonalcoholic beverages (IBISWorld).
New Entrants - The total startup cost (no land purchase) for a new restaurant is on average $500,000—a relatively low barrier. However, larger restaurants or chain restaurants benefit from economies of scale in terms of lower initial costs and greater negotiating power with

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