mini case study
maximum of 1,000 words (plus any references),
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Read the case and answer the two (2) questions. Number each
question. Answer both questions separately in as much detail as possible.
Extensive use and visible reference to course theoretical content and case
examples are expected and necessary for a satisfactory grade. For example,
students must include all case examples they can find. An introduction and
conclusion, however, are not required in this assignment.
***should use APA citation style for referencing****
The Rise of the Ghost Kitchen
Food delivery apps like Uber Eats, DoorDash and Grubhub are starting to reshape the American food
industry. As more people order food to eat at home, and as delivery becomes faster and more
convenient, the apps are changing the very essence of what it means to operate a restaurant.
No longer must restaurateurs rent space for a dining room. All they need is a kitchen or even just
part of one. They can then hang a sign inside a meal-delivery app and market their food to the apps
customers, without the hassle and expense of hiring waiters or paying for furniture and tablecloths.
Diners who order from the apps may have no idea that the restaurant doesnt physically exist.
The shift has popularized two types of digital culinary establishments. One is virtual restaurants,
which are attached to real-life restaurants like but make different cuisines specifically for the delivery
apps. The other is ghost kitchens, which have no retail presence and essentially serve as a meal
preparation hub for delivery orders.
Many of the delivery-only operations are in the early growth stage, but their effect may be farreaching, potentially accelerating peoples turn toward order-in food over restaurant visits and
preparing home-cooked meals. Uber and other companies are driving the change. Since 2017, the
ride-hailing company has helped start 4,000 virtual restaurants.
Since the pandemic began many restaurants have pivoted to providing takeout and delivery. Its a
move that shows no signs of diminishing, even as they reopen for dining in one form or another. To
accommodate this increased demand they are depending more and more on various types of offpremises kitchens.
Several companies are counting on the continued growth in the ghost kitchen trend. Their inventory
is so-called ghost kitchens off-site meal-preparation facilities that are untethered from physical
restaurants. They predate the virus but are multiplying now and taking many new forms.
Ghost kitchens allow restaurants to outsource the making of their takeout and delivery meals without
cannibalizing the stoves, walk-ins and prep areas needed to serve seated diners outdoors or in. With
national reach, theyre also promising to expand a restaurants footprint and brand recognition
beyond the immediate neighborhood. i
Reef Kitchens is one of these. It was started in June 2019 in Miami, using parking lots and garages.
Today it has some 4,500 parking sites across the country where it is installing mobile pods roughly
the size of shipping containers that it calls kitchen vessels. The same space might house cooks
preparing delivery orders from several restaurants, whether the food is Indian, Mexican, Italian or
Reef has three modular kitchens up and running in New York City. It expects to more than double
that by the end of the year and hopes to get its nationwide total to 300.
When a customer orders online through the website of a Reef Kitchens client or one of the delivery
apps like UberEats or Postmates, the information goes to Reef, but the customer never interacts directly with Reef (though the service is adding pickup at some of its locations). The company started
before the virus hit, but Carl Segal, the chief operating officer, said that what it is doing feels more
urgent now. For a restaurateur, establishing a second kitchen would be expensive given the costs of
rent, construction, utilities and staffing, but with Reef, the restaurant has no upfront expenses.
It doesnt cost them anything, Mr. Segal said. We enter into a partnership with them, we keep the
revenue and pay them a royalty percentage every month.ii
One of the main drivers of the growth of the ghost kitchen market is the changing cost structures of
the foodservice environment. Ghost kitchens push restaurant cost structures toward delivery rather
than in-person dining, and the reduction of employees that comes with a delivery-focused model can
significantly bring down rent and staffing costs for restaurants and grow thin margins, he said.
For example, 60% of the cost of a Starbucks latte represents the cost of rent and staffing according to
Euromonitor, which cited data from Financial Times. As delivery becomes less expensive and ghost
kitchens grow and become more centralized, reducing food delivery times in the process, restaurants
could find financial gains in optimizing their business for off-premise rather than dine-in experience.
The ghost kitchen concept is establishing itself in the Canadian restaurant industry as well. Joey
Restaurants opened a ghost kitchen at Kwantlen Polytechnic University in Surrey, B.C., on May 14
and another in a stationary food truck in Brampton, Ont., on May 21. It did so partly to provide jobs
to staff who could no longer work as servers in its dining rooms, as well as create new jobs, said
Rupert Martin, vice-president of culinary. Ghost kitchens offer a quick, cost-effective method, Martin
said, noting brick-and-mortar restaurants are very expensive to open and can take months, whereas
ghost kitchens can be opened in weeks.
Before the coronavirus, the off-premises channel accounted for less than 10 per cent of the
commercial restaurant industry’s revenue. It is predicted it to make up close to 20 per cent of a fullservice restaurant operator’s business once the pandemic ends.iv
Questions: (Total marks: 50)
1. With reference to the Classical and Behavioral schools of management thought,
identify which school of thought you believe is the best approach for managing
ghost kitchen employees. Use relevant course theory and case examples to support
your view. (30 marks)
2. Describe how the ghost kitchen reflects the four defining characteristics of an
organization. (20 marks)