DECISION MAKING

Case Study: Which Customers
Should This Restaurant Listen To?
by Sandeep Puri, Kirti Khanzode, and Alison Beard
FROM THE JUNE 2016 ISSUE

R ohit 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. Where am I?
Who are these people? He wanted to look around
but knew he couldn’t take his eyes off the eggs.
SAM PEET 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
Case Study: Which Customers Should This Restaurant Listen To?
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.”

Case Study: Which Customers Should This Restaurant Listen To?
“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.”
 “Of course they have. It would mean more money
Case Study Teaching Notes for them.”
Sandeep Puri and Kirti Khanzode teach the
case on which this is based in MBA
“More for us, too, I think. Arundhati and I asked a
marketing, services marketing, and retail
management courses. few questions about this in the last survey. A full
48% of respondents said they would come to
What drew you to this story?
Many of our students and friends regularly Yolk-ay more frequently and spend more each
visit Raju Omlet. We had a chance to meet
time if we had a more varied menu.”
with the founder to discuss the challenges
of expanding without compromising the
unique value proposition. “And what did the other 52% say?”

How do you kick off the discussion?
We ask about critical success factors in
the restaurant industry generally and in Vikram ducked his head sheepishly. “They said
the UAE in particular. Then we prompt they were happy with the menu and probably
students to discuss customer wouldn’t change their routine—but Dad,
expectations, marketing communications,
remember that these are our most loyal
and potential growth strategies, including
home delivery, geographic expansion, and customers, people who really love their eggs.
menu changes. Imagine if we did a broader survey of all quick-
service restaurant diners—everyone who goes to
What do you hope they’ll take away?
We want them to understand the
Tikka House or Raja Cooks or KFC. If we asked
importance of branding to small and
medium-size businesses, to evaluate the them what would bring them to Yolk-ay more
strategic choices available to Raju Omlet often, you know they’d say more offerings.”
given customer preferences, and to work
out how entrepreneurial firms create and
sustain competitive advantage. “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 expand its menu offerings?   
The Experts Respond
VIKRAM IS RIGHT on a few counts: Restaurant-

goers do seek novelty, and there’s only so much

Rajiv Meherish is the founder of Raju
Omlet, a Dubai-based restaurant group. 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.

IN THE FAST-CASUAL restaurant business,

innovation is a must. So I would advise Rohit to

Anthony Ackil is a cofounder of b.good, a
fast-casual restaurant chain with 29 experiment with and expand Yolk-ay’s menu as
locations in the United States, Canada,
and Switzerland. 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.

A version of this article appeared in the June 2016 issue (pp.109–113) of Harvard Business Review.

Sandeep Puri is an associate professor at the Institute of Management Technology in Ghaziabad, India.

Kirti Khanzode is an associate professor at the Institute of Management Technology in Dubai.

Alison Beard is a senior editor at Harvard Business Review.

This article is about DECISION MAKING
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Related Topics: ENTREPRENEURSHIP | BRANDING | GROWTH STRATEGY

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1 COMMENTS

DrShrawan Roongta 
DrShrawan Roongta  3 months ago
This case is a typical example of 'Product - Market' expansion strategy to drive growth in revenue and customer base.
The challenges cited are one of positioning and core-competence. 
Retail theory talks about how retailer (food retailer in this case) start by offering a differentiated offering and then
expand the offering to drive growth and thereby expose themselves to new / niche players. 
Branding provides some answers for such a business scenario, for example: creating a sub brand to increase the
portfolio of offering and ring fencing the main brand [also termed as secondary endorsement - YumChicken from the
house of Yolk-Ay; like "Scorpio from Mahindra" or Aquafina from PEPSI].  
The other dilemma of "delivery" based service relates to maintaining "quality" and capturing the non-store
consumption category, again without running the risk of "poor quality" leading to brand name erosion. A limited set
of menu with higher shelf life products could be tried phase wise to address this concern. 
The main issue here isn't "which" customer to listen to; but more of judicious "segmentation". 

Dr. Shrawankumar Roongta 
MBA, Ph.D 
London

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