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Plato Diner Case Study
Plato Diner was a family run restaurant, where the owners were Greek immigrants. Dean and Chris Papas were the two brothers who owned the restaurant. From the case study, it was evident they consistently faced different challenges ranging from management problems, human resource, taxes, marketing, and labor laws. Since they had not completed their education to their desired level, it was understandable that they lacked some of the necessary skills needed to run a business. This paper analyzes the brothers mistakes as per outlined in the case study and identifies possible solutions or recommendations to help end their persistent issues.
The Plato brothers firmly believed if they worked hard and spent their money prudently, they would be able to start a business and run it successfully. After working for several years, they managed to kickstart their dream in June 2002. The brothers invested all their money into purchasing Plato Diner, which was a refurbished diner that had been put up in the 1950s. At the time of the purchase, Dean and Chris aged 22 and 24 respectively. Upon purchase, the brothers acquired a permit to allow them to run the business for half a century. Today, the business is open all day and sells breakfast, lunch, and dinner. The brothers were also involved in the daily activities at the restaurant. The employed family members did not receive any pay because the brothers believed that their kin should help in running their business. Plato Diner thrived because they had a clean environment and a great reputation. However, irrespective of the perceived outward growth, Plato Diner was experiencing some internal issues that were threating its continued existence.
Internal Challenges at Plato Dinner
Analysis of the case study highlights that the brothers lacked key business sense. For instance, the declined to add specials to their menu. They also refused to purchase a nearby field that would help them acquire more space to solve the issues related to parking. After a suggestion from Dean’s wife to place a Plato Diner advertisement on the newspapers or local television, the brothers declined. Notably, they also refused to set up a credit card machine citing the resulting charges would be unbearable for the business. A key takeaway from these activities showed that Plato did not understand the concept of investing more money into the business in order to increase their revenue. The insistence to stick to the initial methods of running the business clearly cost them a chance to expand.
The Plato’s business skills were questionable. However, their internal challenges more so in terms of management caused the biggest issues. They had little understanding of vital concepts needed to run a business such as Math and Accounting. Fortunately, they acknowledged their shortcomings and hired an accountant. Unfortunately, they failed to follow the accountant’s instructions on the most ideal method of book keeping. The Plato brothers also disregarded the accountant’s advice to award themselves a recorded salary. Therefore, the brothers would take money from the available cash any time they required some. There existed no separation between the brothers’ personal finances and those meant for the business.
The brothers’ clashing personalities also contributed to the restaurant’s challenges. Chris was means and bossy, whereas Dean was kind and friendly. Chris would often challenge those who appeared to go against him while Dean through use of humor, promoted a fun work environment. Their lack of awareness on legal issues also cost them a lot. Plato Diner was guilty of several illegal activities such as hiring under age children and illegal immigrant, discrimination of employees, as well as falsifying wage reports. After the brothers dismissed Martha, who was one of the elderly employees at Plato Diner, she reported the issue to the authorities. Martha’s actions caused Plato Diner to be embroiled in law suits for a significant period of time. Eventually, the business had to pay huge fines to clear their name of the legal records.
If Plato Diner was to start experiencing an upturn in their fortunes, they needed to reconsider their business strategy. The following are some of the possible recommendations that would set the business on an upward trajectory.
As noted earlier, Plato Diner enjoyed a great reputation in the city because they offered high quality food in a very clean environment. However, a slight alteration to their pricing techniques would be helpful in improving their services. A good move would be to introduce a credit card machine. The brothers were against this idea because of the resulting credit card fees. However, research indicated that more than 92% of restaurants in the region accepted credit card payments. Increasing the payment options from cash to cashless would out rightly increase Plato Diner’s clientele. Agreeably, their argument against installation of a credit card machine was valid because at least 8% of restaurants still adopted use of cash only. The case study states that customers would often turn away every time they saw the “No Credit Card” sign. Plato Diner may have innovatively integrated credit card payments into their system by finding a way of covering the three percent fee. For instance, they would have considered adding the prices on the menu list by 3%. On the same note, they would have placed a sign on the register indicating that all customers would receive a 3% discount if they paid using credit cards. Such a roundabout approach to payments allows business to pass processing costs to the consumer. Thus, Plato Diner’s revenues will not be negatively affected by introduction of credit cards.Customers will be less concerned about the additional 3% provided they existed favorable payment channels.
Another recommendable solution would be to increase the size of their parking lot. Cars are an important part of people’s lives especially in cities. The numbers from the Department of Transport showed that more people continued to own cars. It made sense for Plato Diner to purchase the adjacent field and expand their lot. However, Chris did not consider it beneficial as he stated the current field was yet to be fully occupied.
Plato Diner’s refusal to place cheaper specials on their menu needed to be rectified. Price is always a key concern for any customer irrespective of the industry. Unfortunately, Plato Diner declined to place specials on their list because they were afraid that customers would feel as though the restaurant was copying its competitors. However, Plato failed to recognize that specials on their menu would help them to attract more customers. The additional income generated from selling specials would hugely impact on their overall revenue.
Lastly, Plato Diner has to adopt a certain form of advertisement. The Plato brothers wrongfully believed that everyone knew Plato Diner and thus there was no need to advertise it on television or print media. This school of thought limited Plato Diner’s exposure to the world. Advertising is crucial for any business. Marketing is a concept that applies to multinationals too. Companies such as Coca Cola or Microsoft consistently do marketing to ensure the customer is aware of their products. In addition, proper use of marketing would have enabled Plato Diner to communicate to current and potential customers of all the positive changes they have been making to improve efficiency at the restaurant. Plato Diner would also have used marketing as an ideal to help attract high caliber employees who would help them raise the quality of their service delivery.
While running Plato Diner, the two brothers did not understand the concept of spending money to make more money. Therefore, they put minimal effort in investing in the business’ crucial sectors. For instance, investing in a credit card machine would have led to an increase in customer numbers. The case study states that customers would turn away when they saw the ‘No Credit Card’ sign. The brothers should also have invested in marketing on all available platforms. Marketing helps to create a positive image on the customer. If done well, marketing is well known to have a direct positive impact on revenue. The business would also have incurred the cost of purchasing the adjacent piece of land to help them increase their parking lot as vehicles are an integral part of people lives in the city. Lastly, Plato Diner should consider adding specials to their menu. These dishes with a slightly lower price would help increase the number of customers and raise the business’ revenues.
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