Calverta’s Case Study
Calveta was founded by the Italian immigrant Antonio Calveta in 1966 that instilled a strong set of values into the foundation of the company. A neighborhood restaurant in Brooklyn expanded into a couple more and then in 1972 the company crafted a niche by beginning meal deliverance services to nursing homes. The market was a very promising one as most nursing homes in the United States chose to outsource their dining services.
Calveta’s values were especially well suited to this niche and by 2008, Calveta Dining Services Inc. was the fourth-largest food delivery service in the U.S. The company has built strong market share and is growing much faster rate than the industry average. The company focuses solely on this niche while most of its competitors offer a broader range of services to different demographics. Calveta’s focuses solely on nursing homes and specializes in planning, preparation, service and the planning of special events. What started as a small family restaurant is now a privately held firm worth $2 billion with 15000 employees, +500 of them working in the company’s headquarter in Brooklyn.
The company’s values have definitely played a large role in their growth. The Antonio Way represents a set of principles in which the company was founded upon. The quality of food that the company serves is the best in the industry and it was highly customized regionally to meet the specific needs of the local customers. For example, in markets that were predominantly Hispanic the company would hire cooks that could prepare traditional Hispanic cuisines. Not only was the quality and service excellent, but the processes are highly efficient and reduce waste.
“These goals are part of what we call the Antonio’s Way — a set of principles we are determined to live by. The first four are our reason for being — it’s about doing quality work, but it’s also about bringing out the best in our people and giving them lots of opportunities. But the fifth goal — growth — captures another, truly key ingredient in our mission.”
The company has invested heavily in human resources and continuously develops their personnel to meet the quality, service, and efficiency targets that are set out in “Antonio’s Way.” The company has incredibly high retention rates and there are many opportunities for internal advancements. This also helped to provide stability in the operations and create relationships with many senior living facilities. In fact, there is a very small client termination and of the small amount that do go to the competition the reasons were predominantly because of personnel changes and not because of the quality of service.
The high levels of retention can also put strain on SLF relationship as employees advance or are reassigned. When an employee would be promoted many of the SLFs would not like the changes in personnel because they developed relationships over the years. Furthermore, as the company continued to grow quickly, it has faced trade-offs with growth and controlling quality and service. The company was growing so quickly and hiring so many managers, it was no longer possible to ensure that they followed the Antonio Way.
Great Southwest Dining
The case mentions the overall organizational goal of doubling its revenues in a five-year period. This goal represents an emotional one since it was set by the founder of the company who subsequently passed. Furthermore, the goal was extremely ambitious. It is clear that Calverta would not be able to meet this goal through the same strategies and operations that were responsible for its success and would have to branch out either horizontally or vertically to be able to achieve the goal set. The company considered many other markets however the SLF was the one that the organization was best suited for.
The purchase of the Great Southwest Dining Service (GSD) in Phoenix represents the company’s best chance for meeting their growth targets. However, this acquisition would greatly expand on the same problems that the company is currently facing. The culture of the target of the potential acquisition does not mirror that of Calverta’s — even with the quality problems that Calverta’s is already facing. However, this acquisition does have the potential to allow Calverta to meet its financial targets.
I think that Calverta should pursue this option and use the Seven S. model to redesign both organizations processes and strategies. Although both organizations have different levels of quality in service, they both share the same types of issues. For example, even though Calverta has a higher level of quality and service, as it has grown it has lost its ability to embed the Antonio way into its new operations.
Therefore what is needed in both organizations is a new structure of operations that can control for quality and service on a mass scale. There is undoubtedly a large amount of risk that Calverta would assume, however the same risks are already present in their organization to a different extent. Thus is Calverta can solve these problems within their own organization then they could reproduce these frameworks into the GSD organization. I would focus on the hard elements first — strategy, structure, and systems.
The first step would to be to build a cross functional team that can build a set of best practices for operations and redesign the management structure to mirror these internally. The performance of the Calverta organization could be improved rapidly. The GSD organization will represent a new set of challenges and will take significantly longer to make changes since a cultural change will be one of the requirements. However, with a new management team this organization could also improve rapidly and there are more gains to be made.
Jennifer Calverta correctly points out many problems that lie within the GSD organization. However these problems could also be opportunities for Calverta. The organization is already faced with the challenge of growing the organization to the next level. It can leverage its knowledge of quality, service, and efficiency and apply these concepts within the GSD culture. The company can significantly invest in human resources training and development to solve issues in both organizations and this strategy will allow Calverta to bring both organizations back to the Antonio Way.
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