CASE

MARTHAS BURGER QUEEN

Martha Thompson, who has worked in restaurants for 20 years, opened her first short order Momand-Pop caf 12 years ago. She is regarded in her community as an excellent small business person. In 1985 she sold her small caf and went to work as a professional manager for a fast food hamburger franchise. In 1987 she resigned and opened Marthas Original Burger Queen. Marthas salary is 25 per cent higher than the one she earned as a professional manager. In 1987 her Burger Queen broke even; in 1988 it had a net profit after taxes of $10,000. Martha then opened two more restaurants in the same city. The results of all three restaurants are summarized in the accompanying comprehensive report. Martha states her strategy: My restaurant concept is to copy fast-food chains such as McDonalds, Burger King and Jack-in-theBox. Ive tried parties, soybean burgers, breakfast, and larger sandwiches to increase dollar sales per customer. I believe that I should expand rapidly just as those chains seem to be doing, yet maintain a personable, local operations staff and a homey atmosphere. But I seem to have less efficient operations than we did when I managed for a chain. I think my layout is good, as in my food quality. I cant buy in larger volumes, but I do try to turn over my inventory at least weekly. I believe in women employees, especially in management positions. I hire Caucasians, African-Americans, and Mexican -Americans, so no one can say Im prejudiced. Marthas response to net income difficulties at the second and third restaurants is, I need to open more restaurants to spread out my fixed costs. Expansion of operations is my strategy, but Im finding financing hard to come by now.

CASE QUESTIONS 1. Of the various strategic planning modes, which do you believe most typifies Marthas Burger Queen? List characteristics of both the strategy mode and Marthas operations that support your choice. 2. Examining the comprehensive report, does the data support the idea that Martha needs a change in operations strategy? If so, which data? 3. Set forth what you believe is a good overall business strategy for Martha. Specify an operations strategy that is consistent with the overall strategy.