Decision Making

Case
Should Study:
This Which
Restaurant CustomersListen
To?
by Sandeep Puri, Kirti Khanzode, and Alison Beard
From the Magazine (June 2016)

Rohit was juggling eggs. Smooth,

brown ovals—in one hand or the
other for a split second, and then
up, up, up in the air. First there
were three, then four, then five—
Where are they coming from? he
wondered—but he kept his arms
moving and the loops going, and
the crowd in front of him cheered.
Sam Peet Where am I? Who are these people?
He wanted to look around but knew he couldn’t take his eyes off the
eggs. Then, suddenly, they changed into different things: a chicken
leg, a courgette, a tomato, a potato, and a bag of lentils. He tried to
keep juggling, but his fingers slipped on the slick chicken skin, he
tossed the lentils too low and the potato too high, and everything
came crashing to the ground. He looked down, but the mess wasn’t
what he expected. All around him were broken eggs—dozens of them
—whites and yolks oozing out through splintered shells.
He woke with a start—sweaty, heart racing—and looked from side to
side. To his left was Anaya, still sleeping. To his right, his nightstand
and alarm clock; it was midnight. Rohit sank back into his pillow,
breathed for a moment, and started to chuckle—quietly, so as not to
wake his wife. He was the founder and CEO of Yolk-ay, a popular
United Arab Emirates restaurant chain that specialized in traditional
Indian egg preparations but was, as of that morning, considering
expanding its menu. The dream was pretty easy to interpret.
Ten Years Earlier
“Dad, you have to try this.”
“Try what, Vikram?” Rohit asked, putting down the Sunday paper.
He’d been staring at an ad for the hotel where he worked as a bell
captain, wishing that “superior service” had been listed alongside
“luxury spa, five-star restaurant, and rooftop pool.” He felt
underappreciated, and so did his team. At least he had the morning
off. Anaya was making breakfast—egg oats upma—and it smelled
delicious.
“Put this in your palm and squeeze as hard as you can,” Vikram said.
“Because I want yolk all over my hands?”
“It won’t break. I promise.”
Rohit was skeptical, but his 19-year-old son rarely initiated
conversation nowadays, so he did as he was told. He squeezed—with
all his might. But he couldn’t crush the egg.
“See?” Vikram said. “The shape helps it withstand the pressure.”
“Very interesting,” Anaya said, putting breakfast on the table.
“Indeed,” Rohit said, smiling and setting the egg aside.
“I miss your food, Ma,” Vikram said, mouth already full. He had
started university the previous fall and was home only on weekends.
“I can’t get a good upma to save my life—never mind masala omelets
or egg curry. You should open a restaurant next to the dorm. Or even
a handcart like the one that taxi driver in Vadodara took us to when
we were visiting Dadu and Nanu last year. Remember how good those
fresh omelets were? I’m telling you, there are so many Indians on
campus. My friends and I would be there every day. So would the
professors.”
“Those egg dishes are easy. You could learn to cook them yourself.
Isn’t there a kitchenette in your dorm?” Anaya asked.
“No time,” Vikram replied. “Class, cricket, parties…” His mother
frowned at the last point. “And soon there will be work,” he added
hastily. “I’m applying for a summer internship at Sony in Dubai
Internet City. Now, there’s a place you should open a restaurant. It’s
crawling with transplants from Mumbai, Chennai, Delhi, Bangalore—
all in their twenties, all away from home. Everyone’s coming for the
jobs, just like you and dad did. You’d make a fortune.”
Rohit hadn’t touched his eggs. He was too busy listening to his son
outline the business idea that would change both their lives.
Five Years Earlier
“We did it, Dad—three new restaurants in three months. I know you
thought I was crazy when I suggested it, but we couldn’t let Tikka
House and Raja Cooks steal such prime retail spots from under our
noses. There will be literally hundreds of new workers moving into
this area and the others over the next year, and we really need to be
the ones increasing our supply to meet that demand.”
“Did you learn that in your business school classes?” Rohit teased.
He felt so proud of Vikram he thought he might burst. When they had
opened the first Yolk-ay restaurant, five years ago, his son had been a
scrawny college student, welcoming customers at the door with flyers
he’d printed at a local copy center. Today, armed with an MBA from
the Emirates Academy of Hospitality Management—which he’d
earned while working as a cashier, cook, restaurant manager, supplier
liaison, and, finally, COO—he was a full-grown man and a fully-
fledged partner in the business.
They now had five locations, including the three new ones, spread
across Dubai, Abu Dhabi, and Ras Al Khaimah, in office and
residential areas with high concentrations of Indian, Pakistani, and
Bangladeshi expats. The restaurants were known across the Emirates
for having the best egg dishes west of Okha, made with local farm-
fresh ingredients, priced affordably, and always served with a smile,
for breakfast, lunch, and dinner. Both Rohit and Vikram could recite
the pitch in their sleep, they’d given it so many times to financial
backers, customers, and journalists. Thanks to hit radio ads—
developed by Vikram and featuring his and Rohit’s voices touting the
health benefits of eggs—the father-son duo had even become minor
local celebrities: expat entrepreneurs made good. Yolk-ay’s 2010
turnover had been two million dirhams. With the expansion, they
hoped to double that amount this year.
The restaurant they’d just opened, near the Mall of the Emirates in Al
Barsha, had been packed all day.
“Where to now?” Vikram asked.
“Home,” Rohit said. “Your mother is waiting for me, and I’m sure
Gretchen is waiting for you.” Vikram’s German-born wife of one year
was pregnant with twins and due in just a few days.
“I meant, which locations should we start scouting next? There is
huge growth in Sharjah. Tikka House just opened there—a little too
early, in my opinion—but I’ve heard rumors that both Infosys and
Tata are considering moving significant numbers of employees there
next year. I could put Arundhati on it.” Vikram’s college friend was
working at Yolk-ay, focusing on new business development.
“I appreciate your enthusiasm, Vikram, but let’s make sure the new
restaurants are running smoothly first. We don’t want to spread
ourselves too thin. The quality has to stay the same across all our
outlets. That’s what we’re known for. That’s our promise to
customers.”
“I promise it will, Dad. I’ll see to it.” And over the next five years, he
did.
That Day
“Dadu, Dadu.” Rohit’s grandsons rushed into his arms. They were
turning five today and had asked to have a party with their preschool
friends in the original Yolk-ay, in Dubai’s Al Karama. Because their
birthday fell on a Monday this year, the one day of the week the
restaurants were closed, Vikram had asked Rohit, and of course Rohit
had agreed. The boys were the light of his life, and no matter how
many Yolk-ays there now were—they’d opened the eighth location, in
Sharjah, a year before—this was still his favorite. It felt like home,
especially this morning, since Anaya was cooking in the kitchen. He’d
told her he would ask the staff to come in and handle everything—his
employees were like family, after all—but she’d insisted.
“Your chefs might cook for every twenty-something in the Emirates
nowadays, but they’re not going to cook for my grandsons on their
birthday,” she’d told him.
Vikram was right behind the boys, carrying presents, which he set
down on one of the café tables. “Are you ready for 10 more toddlers
running around this place?” he asked.
“Of course,” Rohit replied. “They’re the next generation of
customers!”
“At least we have an hour until they come. Does Ma need help? Ah,
never mind, Gretchen is already on her way.” Indeed, Rohit’s
daughter-in-law had given him a quick kiss on the cheek and then
darted behind the counter and through the double doors into the
kitchen, shouting “Boys, be good!” as she went.
“Is she talking to us or to them?” Rohit joked.
“I brought some trains to keep them occupied,” Vikram said, pulling
the toys out of a rucksack.
“Great, let’s play.”
“Actually, Dad, I was hoping we could talk business for a second.
Have you thought about the discussion we had with Arundhati last
week?”
“Sure—we’ve hit a dead end with geographic expansion. That’s fine.
We can focus on the existing restaurants for now.”
“Yes, but turnover has been flat for the past few months, and we seem
to be losing market share to Tikka House and to western competitors
like KFC. Of course, we still have loyal customers who love us for the
familiarity, but we don’t seem to be winning new ones. The
excitement isn’t there anymore. That’s why Arundhati and I think we
need to start expanding in other ways.”
“Are you talking about home delivery again? I thought we’d agreed
that our dishes don’t travel as well as they’d need to. No one wants
cold eggs.”
“Actually, people do want us to do home and office delivery.
According to our customer surveys, they want it desperately. They’re
getting it from every single one of our competitors. But you’re right—
maybe they don’t recognize the reduction in quality that would come
with the convenience. The chefs have been adamant on that point,
and I’m not going to argue with them, or you, about it again.”
“Good,” Rohit said.
“So let’s talk about the menu. What can we add to spice things up?”
“The chefs in the test kitchen were working on some new
preparations yesterday—a recipe one of them got from his great-aunt,
another from a cookbook that just came out in America.”
“Egg dishes?”
“Of course,” Rohit said. “Yolk-ay is eggs. Our brand, our marketing,
our genesis—eggs. ”
“Only eggs, for ever and ever? Couldn’t we consider adding some
vegetarian and chicken dishes, with poultry and produce sourced
from the same farms as our eggs? We already have solid relationships
with suppliers, and they’d love to do more business with us. They’ve
been begging us for years.”
Case Study Teaching Notes
Sandeep Puri and Kirti Khanzode teach the case on
which this is based in MBA marketing, services
marketing, and retail management courses.
What drew you to this story?
Many of our students and friends regularly visit Raju
Omlet. We had a chance to meet with the founder to
discuss the challenges of expanding without
compromising the unique value proposition.
How do you kick off the discussion?
We ask about critical success factors in the
restaurant industry generally and in the UAE in
particular. Then we prompt students to discuss
customer expectations, marketing communications,
and potential growth strategies, including home
delivery, geographic expansion, and menu changes.
What do you hope they’ll take away?
We want them to understand the importance of
branding to small and medium-size businesses, to
evaluate the strategic choices available to Raju
Omlet given customer preferences, and to work out
how entrepreneurial firms create and sustain
competitive advantage.

“Of course they have. It would mean more money for them.”
“More for us, too, I think. Arundhati and I asked a few questions
about this in the last survey. A full 48% of respondents said they
would come to Yolk-ay more frequently and spend more each time if
we had a more varied menu.”
“And what did the other 52% say?”
Vikram ducked his head sheepishly. “They said they were happy with
the menu and probably wouldn’t change their routine—but Dad,
remember that these are our most loyal customers, people who really
love their eggs. Imagine if we did a broader survey of all quick-service
restaurant diners—everyone who goes to Tikka House or Raja Cooks
or KFC. If we asked them what would bring them to Yolk-ay more
often, you know they’d say more offerings.”
“We’ve always said that if you try to do everything, you won’t do
anything well.”
“I don’t want us to do everything—just a few more things, enough to
get people talking about us again, enough to make sure this business
keeps growing, for me, for you, for your grandsons.”
“What does Sunil think?” Yolk-ay’s head chef was a traditionalist;
Rohit couldn’t imagine suggesting this type of expansion to him,
much less insisting he execute it. There would be huge implications
for the kitchen staffs—new ingredients, equipment, and stations;
additional training; a whole new way of working together.
“Actually, we asked him to do a small, unofficial market test on
Friday. Don’t be mad—it was impromptu, just something Arundhati
and I thought up that morning, a tiny experiment. We brought him
the ingredients for those samosas he made for last quarter’s company
party, and he grumbled at first but finally agreed to make a batch to
hand out as samples to the lunch crowd. People loved them—couldn’t
get enough. And Sunil was grinning from ear to ear.”
“So he wants to expand the menu too?”
“Not exactly. He talked my ear off about the havoc it would wreak on
his systems. But I think we could bring him on board if we had your
support.”
“I don’t know, Vikram. Can we talk about it at the office tomorrow? I
thought we were here to eat cake and watch a clown do some
juggling.”
“Sure, Dad. Sleep on it. We’ll talk tomorrow.”
That Night
Rohit was still at the party, and the twins were opening the last of
their gifts, tearing into identical boxes wrapped in yellow paper and
tied with red bows. They were quite large—Had Vikram bought them
those monster trucks?—but once the boys had them open, it looked like
only white tissue paper was inside. They pulled out sheet after sheet
after sheet, flinging them across the table, until finally,
simultaneously, they reached in deep and pulled out their prizes. In
Reza’s hand, hoisted above his head, was a perfect brown egg. In
Wolfgang’s, a chicken leg. Both boys were beaming.
Rohit woke again with a start and turned to the alarm clock: 1 AM.
Two dreams in one night about the same thing: Vikram’s proposal.
But what did they mean? Stick to eggs, or not?

Question: Should Yolk-ay

The Experts Respond expand its menu offerings? 

Rajiv
basedMeherish
restaurantisgroup.
the founder of Raju Omlet, a Dubai-

VIKRAM IS RIGHT on a few counts: Restaurant-goers do seek novelty,

and there’s only so much you can do with an egg. But if Yolk-ay wants
to preserve its unique and hugely successful brand identity, it should
stick to the product it’s known for.
That’s not to say menu expansion isn’t possible. It absolutely is. At
Raju Omlet, we’re more than willing to experiment with new
offerings, provided they live up to the promise implied by the
restaurant’s name: egg dishes with an Indian touch. For example,
while we’ve added chicken to our menu, it comes in a roll that
incorporates eggs. In fact, all our dishes remain egg-related. And
although we’ve toned down the spices in some recipes to better suit
Western palates, the general flavoring remains the same.
This sort of flexibility—variety that doesn’t interfere with the brand—
is very important in a multicultural, restaurant-heavy city like Dubai.
Now that Yolk-ay has secured its spot as a favorite among South
Asian expats, it should begin to target other nationalities in a careful,
calculated way.

To preserve its brand identity, Yolk-ay

should stick to the product it’s known for.

Vikram seems big on customer surveys, which are useful, but I’d
suggest that Rohit start visiting his restaurants—particularly the
newer locations—more regularly so that he can engage directly with
both loyal and first-time Yolk-ay clients. I do this every Friday and
Saturday, either at our original restaurant in Al Karama or at a larger
one we recently opened in Jumeirah. (A third will open in Sharjah
soon.) When you talk to people and ask them questions, they feel
valued, and you get free information.
When these conversations tell me that customers might be interested
in a new offering—those chicken rolls, say, or fresh orange juice—we
introduce it, but we don’t put it on the menu right away. We advertise
it on laminated tent cards on our counters and tables and sell it for
four or five weeks, encouraging employees to recommend it. If it
takes off, we add it to the menu.
Vikram and Rohit might also consider reopening the home delivery
conversation. We, too, initially thought that sort of service was not
possible: Eggs get cold, and bread gets soggy. But we’ve found about
15 items we can bring to people without diminishing their quality and
are testing technologies that could allow us to add more.
Yolk-ay’s opportunities for geographic growth and menu change may
be limited. But that doesn’t mean the chain should stop innovating.

Anthony Ackil
restaurant iswith
chain a cofounder
29 of b.good,
locations in the aUnited
fast-casual
States,
Canada, and Switzerland.
IN THE FAST-CASUAL restaurant business, innovation is a must. So I
would advise Rohit to experiment with and expand Yolk-ay’s menu as
far as the brand will allow.
A restaurant’s name and initial positioning can present limitations, of
course. For example, I would never encourage Chipotle to add
burgers to its menu, or Shake Shack to start selling salads. Those
brands trade on the simplicity of their offerings and shouldn’t muddle
their messages. But Yolk-ay might have a bit more freedom. As
Vikram says, it might not be too much of a stretch to add dishes made
with chicken from the same farms that deliver the restaurant’s eggs—
emphasizing that chicken, too, is a lean, versatile protein.
When my partner, Jon Olinto, and I opened our first b.good, 13 years
ago, the idea was to serve real food—meals customers would feel good
about eating—fast. That gave us a lot of flexibility in our menu, and
we’ve taken advantage of it. Four years ago we were focused on beef,
turkey, and veggie burgers; chicken sandwiches; salads; and shakes.
Since then we’ve added kale-and-grain bowls, fresh-fruit smoothies,
and healthful, hearty breakfasts.

In the fast-casual restaurant business,

innovation is a must.

We’re constantly testing variations on existing menu items along with

new categories. An idea might come from Jon, me, or our head chef,
Tony Rosenfeld. We also listen to customers, employees, and outside
chefs we bring in for inspiration. Once Tony works up a recipe, we
test it internally. If we like the dish, we invite select customers who
have registered to join our “family” system to try it free at certain
restaurants; we send them coupons through our app, and they show
the bar code at checkout. We follow up with a survey, tweak the
recipe, and add the item at a few restaurants, typically one urban and
one suburban. If sales are good, we roll it out across the chain.
Of course, the process takes longer—six to eight months—when
introducing an entirely new concept, such as the bowls or breakfast,
and Rohit should approach an expansion to, say, chicken or
vegetable-only dishes in the same careful way.
Standing still isn’t an option. If the UAE market is anything like the
U.S. one, Yolk-ay will be under constant pressure from current and
new competitors that take its theme of home-cooked fast food to the
next level. To stay successful, it has to evolve.
HBR’s fictionalized case studies present problems faced by leaders in real
companies and offer solutions from experts. This one is based on the HBS Case
Study “Raju Omlet: Expanding in the United Arab Emirates” (case no. W15515),
by Kirti Khanzode and Sandeep Puri.
ABusiness
version Review.
of this article appeared in the June 2016 issue (pp.109–113) of Harvard

SP
Sandeep Puri is an associate professor at the
Asian Institute of Management, in the Philippines.

Kirti Khanzode is an associate professor at the

Institute of Management Technology in Dubai.

Alison Beard is a senior editor at Harvard

Business Review.