Calvet Case Study

Calveta Dining Services

Overview:

CalvetaInc. is a privately held firm that manages food services to around 1000 Senior Living Facilities (SLFs) with revenues of over $2.02 Billion (in 2008). In June 2009, they employed 15,000 people and had 5 basic goals commonly referred to as “Antonio’s Way” on which they were running the company. Frank took over the company from his father and is charged with doubling the company’s revenues within 5 years. Frank currently has 3 years remaining and views the acquisition of GSD as the only way to achieve the goal. Frank’s sister, Jennifer also serves as the COO and was also once considered by many to be Antonio’s successor.

Core Issues

* Double revenues within 5 years

* Preservation of cost-control model

* Preserve company culture – pro-employee and employee growth and progression

* Functional flexibility

* Reputation of quality food service

* Expanding into new segments to promote profitability

* Hospital segment

* Difficulty of integration into company culture upon acquisition of new business

* Retaining or improving customer loyalty

* Trade-off between clients’ desire for consistency of staff and employee progression

Analysis of GSD deals:

1. The size of the company would almost double (75% of the current revenue from $2 Billion to $3.5 Billion). With this size company, the current organizational structure would be untenable (assuming GSD has a similar structure).

2. Company culture has already deteriorated: Calveta has grown so big that their training program does not instill the basic goals (“Antonio’sWay”) in the new trainees effectively. To highlight this, “over the years, Calveta’s President and CEO met with every new employee. By 2009, with 1,000 management trainees joining the company in just 12 months, this was no longer possible.”

3. Frank already had a growing concern regarding the “diversity of skills of area and account managers. Recent college and...