Case synthesis reveals capacity expansion alongside profitability and food quality risks in commercial restaurants, highlighting strategic tradeoffs across small and large dining providers.
Since the start of the COVID-19 pandemic, online food delivery has experienced significant growth. As consumer preferences continue to shift toward this new platform, it is crucial for restaurants to assess the benefits and risks associated with engaging in the delivery market. By synthesizing academic research and industry reports, this case highlights the associated benefits for restaurants including the extension of service capacity constraints, market growth, and ease of implementation. Additionally, risks are introduced including food quality control, profitability, production capacity constraints, and cannibalization. The topics are discussed and contrasted under the examples of a large service provider (Shake Shack) and smaller independent restaurant (EL Ideas). The case provides valuable insights regarding the opportunities and challenges of partnering with food delivery providers, enabling future restaurant managers to make informed decisions in this evolving market.
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Tabatabaei et al. (2024) studied this question.
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