Question

Backyard BBQ is a chain of casual restaurants that promises affordable barbecue using top-quality local ingredients. However, the company has struggled to achieve a competitive advantage because of its high overhead costs. Which of the following scenarios is most likely to result in a competitive advantage?
a. Eliminating brick and mortar locations and offering delivery from central kitchens
b. Marketing itself as a high-end restaurant and competing with more refined restaurants in the area
c. Lowering the quality of ingredients below what customers expect to control costs
d. Raising prices without improving quality

Answer 1

Answer:

A) Eliminating brick and mortar locations and offering delivery from central kitchens

Explanation:

Usually the highest overhead cost of any restaurant is its actual brick and mortar location. The place itself requires the highest investment and absorbs most of the costs.

By eliminating the actual restaurants, the company will be able to cut most of its overhead costs and basically the largest portion of total costs. By reducing most of their costs, Backyard will be able to sell top-quality barbecue at a much lower cost and gain a competitive advantage.