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THE INNOVATIVE COMPETITIVE ADVANTAGE: A CASE STUDY OF TWO

PIONEERING COMPANIES

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 THE INNOVATIVE COMPETITIVE ADVANTAGE: A CASE STUDY OF TWO
PIONEERING COMPANIES
Elizabeth Whalen
University of Houston, United States
Conrad N. Hilton College of Hotel and Restaurant Management
[email protected]

and
JiYoon (Jennifer) Han
University of Houston, United States
Conrad N. Hilton College of Hotel and Restaurant Management
[email protected]

ABSTRACT
By observing two existing organizations, this case study illustrates innovative strategies for value
creation and competitive advantage through Porter’s generic strategies of differentiation and low-cost
leadership. The Little Bay Restaurant represents differentiation through its no cost pricing strategy, while
the Eatsa restaurant concept represents low-cost leadership through its replacement of front of house
employees for technological services. These two organizations use innovation to create competitive
positions within the highly saturated food and beverage market, not only through ingenuity but by creating
value for both the organization and the customer.

Key Words: innovation, competitive advantage, value, differentiation, low-cost leadership

INTRODUCTION
Great organizations consistently look for a competitive advantage that will give them an edge over
the competition. Finding competitive advantages that are not easily mimicked is essential in maintaining
momentum for an organization, and one of the best ways to stay ahead of the competitive market is to
maintain an environment of innovation. The definition of innovation is simple: the introduction of
something new or a new idea, method, or device (“innovation”, 2011), successfully implementing the
concept of innovation is significantly more challenging. Innovation requires the ability to understand and
to read the market and the consumers. As stated by DeMaria (2013), “successful innovation [must] begin
with the identification of an unmet need… [and once this] unmet need is recognized and a plausible
solution is identified, a successful innovator has to be a risk taker and be willing to fail” (p. 253).

The challenge of innovation is recognizing opportunities for the implementation of novel ideas
combined with the willingness to accept that those innovations may result in failure (DeMaria, 2013).
Despite the risks and challenges, the hospitality industry calls for service and practice innovations that will
help guide strategic and operational decisions in meaningful and valuable ways (Johnson, 2011). The
following case study examines two organizations that took the risk of innovation: one through pricing
strategy and one through technology. These two organizations reasonably represent the spectrum of
opportunities for innovation from service operations through marketing strategies.

Innovative Pricing Strategy

Coworkers at Lunch
Coworkers Evelyn, Matt, and Cassandra finished a long, tedious morning meeting and decided
that they want to eat out for lunch. Cassandra recommends a very nice local restaurant her friends have
been raving about, “don’t miss the foie gras!” They quickly collect their things and make their way to the
gastronomic district for lunch. The atmosphere is warm and welcoming, and the restaurant is packed with
other business diners. Their server, Edwin, was courteous and prompt. He welcomed them as first time
visitors and offered a number of recommendations for the most popular dishes.
 Evelyn looks at the menu and starts to worry, “The food on this menu all looks so good, but it also
looks fancy. I am not sure I can afford the prices.” However, when Evelyn searches for the price of the
different entrees, she does not find any! Evelyn asks Matt and Cassandra if their menus have any labeled
prices, and they agree that they cannot find any. The three quickly call their server Edwin over to ask him
to help. Edwin smiles at the new customers, and quickly explains the situation. “I’m sorry I forgot to tell
you when I first introduced myself. This month, there are no prices for the food. The owner told us that he
wants customers to ‘pay what you think the food is worth’. It is completely up for you to decide.” He
again smiles at the puzzled and awed faces of the three coworkers.

Matt enjoys trying new foods, but is often worried about being disappointed. He is excited for the
promotion because this means he can try different things and not worry about the price of each item. He
decides to order an appetizer, an entrée, and a dessert. Evelyn, however, feels uncomfortable. She is not
sure what the value of the food items should be, and she does not want to look foolish in front of her
coworkers. She decides to order the simplest entrée which she is most familiar. Cassandra is not worried
about the promotion, she decides that she wants to follow her friends’ recommendations and order things
they suggested to her. All three greatly enjoyed their food, the service, and the atmosphere. As promised,
a bill never came. Instead, Edwin placed an empty check presenter on the table and reminded them that
they were free to pay what they wanted.

Little Bay Restaurant

Although this scenario seems outlandish, this is exactly what the owner of the Little Bay
restaurant in the Farringdon District of London did during the recession in 2009. Peter Ilic, a Yugoslavian
immigrant, decided to follow a month long pricing strategy that allowed the customers to decide the value
of his product. In an interview with Voice of America (VOA) News in February 2009, Ilic cited many
reasons for his promotion choice. He believed that people should have the opportunity to eat even if they
lost their jobs, something that happened increasingly during the recession. He also explained that during
the economic downturn, customers were seeking value (Drew, 2009).

Ilic’s strategy was a success. He claimed that customers on average paid more than what he would
have charged, paying around 17.25 pounds per person ($26.25 USD), 30% greater than the average of his
own priced checks (Hodge, 2009). The volume of customers also remained high. Ilic served just under
10,000 customers in the month of February (Hodge, 2009), and often had to turn people away due to the
filled capacity (Drew, 2009). The promotion was not only successful in the local community, but also
received expansive media attention (Britton, 2009). Twenty-one British news outlets, eleven international
news outlets and thirteen blog media sites covered Ilic’s price promotion in 2009 (Little Bay Farringdon,
2009), which is estimated at 148,000 pounds of free publicity (Kent, 2009).

Innovative Operational Strategy

Coworkers at a Business Trip
Three weeks later, Evelyn and Matt were scheduled to go on a business trip to San Francisco to
attend an important meeting to obtain funding for their company project. They had a very rigorous travel
schedule with an early morning departure from London arriving in San Francisco at 1:05 PM and had to
make their way to the office for a 5:30 PM meeting, leaving very little time for relaxation. They were very
hungry when they arrived in San Francisco, but after clearing customs and immigration they realized they
had limited time before the meeting would start to both eat and drive into town.

Evelyn was hoping to find a quick, light, and healthy meal; her stomach was too sensitive to take
in heavy and greasy food especially after a long day of travel. The hungry colleagues went to the closest
airport food court. Within a few minutes of arriving at the packed food court, Matt and Evelyn stood
blankly staring at the extremely long queue and the dining place packed with noisy travelers. Thirty
minutes later, Evelyn and Matt were still hungry. They had grabbed their bags and were hailing a cab. Matt
grabbed his phone to search for any dining opportunities on the way to their meeting. Surprisingly, one
perfect match popped up on his smartphone, a quick-service restaurant serving healthy fast food called
“Eatsa.”
 Matt and Evelyn directed the cab driver to the financial district where the Eatsa was located. By
the time they arrived at the restaurant, it was already 4:10 PM, and they decided they only had 30 minutes
to eat and head on their way. When they entered the restaurant, there were amazed by two exceptional
things: there were neither counters to order from nor any employees to serve or take their order. Instead, on
one of walls there were small boxes similar to a post office, and a small queue of people standing to the
opposite side, which Evelyn and Matt joined. Feeling unfamiliar with the setting, they glanced at the menu
on a flat-screen monitor which included options for eight quinoa bowls, including the burrito bowl, the
bento bowl, and the balsamic beet, for $6.95 each. The line moved more quickly than they expected and it
was Matt’s turn to order. He approached the virtual iPad screen, tapped in his order for a burrito bowl, and
paid. His name appeared on a big screen as the food was ordered, an extra touch that immediately helped
Matt feel comfortable. Next it was Evelyn’s turn, and she ordered the stuffing bowl.

When Matt’s burrito bowl was ready, a number appeared beside his name on the screen which
corresponded with one of the small boxes Evelyn and Matt had noticed when they first walked in. “This is
called a cubby,” a nearby customer told them. “I can see that this is your first time here, you are going to
love it. Go to the cubby that is black and alarming and tap it with your finger.” Amused, Matt went to his
transparent LCD cubby and did as the woman instructed. His cubby opened, and his burrito bowl was
waiting for him. He took the bowl outside, sat at one of the benches in front of the restaurant and enjoyed
his meal. Evelyn was also satisfied with her very filling and quick meal. It took them less than 10 minutes
to order and receive their food, which allowed them to arrive at the meeting venue feeling warm and
comfortable and prepared to make their important presentation.

Eatsa
The restaurant industry is constantly challenged with increased levels of competition. Eatsa is
one of the restaurants that decided to accept change and innovative strategies for operational efficiency and
cost effectiveness. It is a fully automated restaurant located in San Francisco at 121 Spear St, which was
newly introduced in 2015. The restaurant’s founder, David Friedberg, insists that this adoption of
technology is more than a food delivery system. It is a different concept from the normal restaurant model
(Miller, 2015).

One of his major motivations to start this new concept was because of workers’ increasing salaries
in San Francisco. On November 4, 2014, Proposition J was passed by San Francisco voters raising the
city’s minimum wage to $15 by 2018 (Office of Labor Standards Enforcement, 2015). In the restaurant
industry, employee salaries account for approximately 30% of the total cost of conducting business
(Dopson & Hayes, 2011). Minimizing labor costs results in much higher profit margins. Eatsa has fully
integrated this concept into its innovative service model. There are no servers taking orders. The service
model depends on technology via the virtual kiosk and a section of “cubbies” for food delivery. This
system decreases the number of front of the house employees. Eatsa currently employs a front of the house
concierge to assist with guest questions and a full back of the house staff to prepare the food. As
restaurants are sensitive to labor costs, the development of technology will be one of the solutions to ensure
the chance of survival in the future (Doran, 2010).

In addition, although the front of house procedure is fully automated, the restaurant aims for
customers’ health. The eight menu items are high in protein, loaded with flavor and prepared with
environmental values in mind, providing customers with a good combination of convenience and health-
conscious food (Miller, 2015). The Eatsa business team also declared that they are targeting the busy
workers in the financial district who currently do not pay much attention to healthy eating (Farr, 2015).
Eatsa is planning to open two more locations including Los Angeles in the upcoming months.

Service innovation
The modern hospitality industry climate imposes certain strategic operational imperatives. These
include creative and quality services for competitive advantage and innovation to effectively manage
resource constraints. Service innovation is a powerful tool for service operations ranging from multi-
national corporations to small, private restaurants. The implementation of emerging technology garnered
attention worldwide and created a demand from customers to have more efficient, productive, and cost
effective restaurant delivery systems (Gallouj & Weinstein, 1997). The major motivation for Eatsa to adapt
new technology was cost reduction. The service industry is different than other goods based industries due
to the intangibility of the service product in addition to the simultaneous production and consumption of
service. Typically, service innovation focuses on the delivery process since it is paramount in creating
value for customers. Selecting the right innovative strategy depends on the goals of the organization and
the characteristics of the service operation. Radical, combinative, incremental, and improvement
innovations could be considered, based on the concept of the service product (Fitzsimmons & Fitzsimmons,
2006).

Eatsa clearly shows that technological adaptation had brought a critical change to traditional
service delivery systems. Using iPads for the Point-of-Sale (POS) system, automatic mail boxes for
delivering food, and screen menus for informing customers of the menu options prove that hospitality
operations have the capacity for innovation which shows the strength of the demands from customers for
improvement within service operations.

Value Creation
While most innovative strategies focus on product innovation, pricing is an area that has received
far less attention. Pricing can be equally powerful (Hinterhuber & Liozu, 2014). Through Little Bay’s
participative pricing strategy, the company was able to reach price-sensitive customers who might not have
otherwise purchased the product during difficult economic times, but who may become loyal customers
when their personal spending increases after economic improvement. Past research on pay what you want
models (PWYW) focuses on consumers’ feelings of altruism, fairness towards the organization, self-
signaling, social welfare and preferences, and reciprocity (Mak, Zwick, Rao, & Pattaratanakun, 2015).
Mak et al. (2015) additionally attribute payment behaviors to social norms. By creating a culture of
normative behavior and reciprocity between organization and customer, restaurants like Little Bay can
successfully run innovative pricing promotions like this one.

Ultimately, any strategy, innovative or standard, must provide value to both the organization and
the consumer. Value is the tradeoff between the quality and utilization of the product and the costs
associated with its acquisition (Oh, 2000). During an economic downturn, the risks associated with
spending money can be much higher than during economically good times. By decreasing the risks
associated with the cost of dining out, coupled with the emotional appeal of building relationships through
offering this promotion, the Little Bay Restaurant successfully built value for both the customers and the
organization.

On the other side of organizations, Eatsa decided to adopt technological innovation to maximize
operational productivity and efficiency, setting all of its menu prices to $6.95. Although slightly different
from the pricing perspective, they share the same goal of providing value to customers. Innovation is
expected to save costs and increase productivity. This will directly affect customers by allowing them to
spend their money and time on other important issues (Miller, 2015). Innovation cannot be viewed in
isolation from technology, radical or incremental, especially during economic downturn (Gallouj &
Weinstein, 1997). Comforting elastic customers with reasonable prices for their meals is essential, and the
adoption of technology is regarded as one of the best solutions for adding value for both the consumer and
the organization. As a result, delving into the ‘black box’ of technology and innovation could greatly
benefit both foodservice operations and customers in the long-term.

Conclusion
Porter’s well known strategies for competitive advantage include both differentiation and low-cost
leadership, represented in this case study by Little Bay’s innovative differentiation strategy through price
and Eatsa’s innovative low-cost leadership strategy through technological advancements in service
operations. These two organizations use innovation to create competitive positions within the highly
saturated food and beverage market, not only through ingenuity but by creating value for both the
organization and the customer.

Discussion Questions
Little Bay Restaurant
1. Why did the reactions of the three diners differ when they found out about the promotion?
 a. How could you manage the different reactions?
2. What are the advantages and disadvantages to an innovative pricing strategy such as the pay what
you want (PWYW) model?
3. This pricing strategy was a month long promotion. Would it be a successful long-term strategy?
4. How would this price promotion affect the employees, especially the wait staff?
a. Tipping policies in London are different than other places globally. In London, it is
customary to tip 10-15% for full service restaurants only (London & Partners). Would
the employees feel differently about the policy based on local customary tipping norms?
5. What are some other ways of creating innovative pricing strategies?
Eatsa
6. Will this kind of service operation work in other locations? Does it require a degree of technology
comfort which might not exist everywhere?
7. Will this kind of service operation work with other models and market segments?
a. Could it be adapted for fast food, casual dining, fine dining, etc.?
b. What kinds of food service options could best adapt to this model?
c. Where would this technology be appropriate?
d. When would this innovation not work? Why not?
8. What are the advantages and disadvantages of eliminating the human component of the service
environment and replacing them with technological alternatives?
9. What other cost-effective technological advancements could you apply to restaurants in order to
increase efficiency?
Questions for both Little Bay and Eatsa
Compare and Contrast your answers
10. What impact would a no price promotion or technological front of house have on brand
reputation?
11. How would these innovations make different consumers feel about the experience both internally
and socially?
a. How would these strategies impact loyalty?
12. Would the price promotion or service innovation work on a larger scale for a bigger brand across
the organization?
13. Would these innovations be successful in every market? Why or why not?
14. How do these innovations create value?
15. Imagine you are opening a restaurant. What kinds of strategies could you generate and adopt for a
competitive advantage in the future?

REFERENCES
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entrepreneur/1053557/keeping-it-simple-peter-ilic.thtml
DeMaria, A.N. (2013). Innovation. Journal of the American College of Cardiology, 62(3), 253-254.
Dopson, L. R., & Hayes, D. K. (2010). Food and beverage cost control. John Wiley & Sons.
Doran, D. (2010). Restaurants and technology-past, present and future: a practitioner's
viewpoint. Worldwide Hospitality and Tourism Themes, 2(1), 94-99.
Drew, C. (2009, February 25). London Restaurant Allows Diners to Decide the Price. VOA News.
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Farr, C. (2015, August 18). San Francisco’s Newest Fast Food: Healthy, Cheap and Served by Robots.
KQED Science. Retrieved from http://ww2.kqed.org/science/
Fitzsimmons, J. A., & Fitzsimmons, M. J. (2006). Service management: operations, strategy, and
information technology. Irwin/McGraw-Hill.
Gallouj, F., & Weinstein, O. (1997). Innovation in services. Research policy,26(4), 537-556.
Hinterhuber, A., & Liozu, S.M. (2014). Is Innovation in Pricing Your Next Source of Competitive
Advantage? Business Horizons, 57, 413-423.
Hodge, N. (2009, May). A La Carte Blanche. Financial Management, 18-21.
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webster.com/dictionary/innovation
Johnson, W.H.A. (2011). Service Innovation under Resource Constraints- Creating Strategic Value from
Operational Processes. Operations Management Research, 4, 86.
Kent, J.L. (2009, February 9). No Such Thing as a (Nearly) Free Lunch? Think Again. ABC News.
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Little Bay Farringdon. (2009, February). ‘Pay What You Think It’s Worth’. [Website post]. Retrieved from
http://www.littlebayfarringdon.co.uk/pay-what-you-think-its-worth-february-2009/
London & Partners. (2016, February 11). Tipping in London. [Website post]. Retrieved from
www.visitlondon.com
Mak, V., Zwick, R., Rao, A.R., & Pattaratanakun, J.A. (2015). “Pay What You Want” as Threshold Public
Good Provision. Organizational Behavior and Human Decision Processes, 127, 30-43.
Miller, C. (2015, September 9). Restaurant of the Future? Service with an Impersonal Touch. The New
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Oh, Haemoon. (2000). The Effect of Brand Class, Brand Awareness, and Price on Customer Value and
Behavioral Intentions. Journal of Hospitality & Tourism Research, 24(2), 136-162.
Office of Labor Standards Enforcement. (2015, October). Minimum Wage Ordinance. [Website post].
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 TEACHING NOTES
Summary
This case study examines the use of innovative strategies to create a competitive advantage by
exploring two different restaurants. The restaurants differ in their methodology, one focusing on marketing
promotions and the other focusing on operations management. However, the two concepts represent the
range of potential innovative strategies. The Little Bay Restaurant in London ran a month long promotion
during the height of the economic recession of 2009 in which customers set their own prices for the meals
they bought. This promotional strategy allowed customers to decide the value of their meal, while the
business was able to attract new customers even during hard economic times. The Eatsa restaurant in San
Francisco took a different approach. It focused on an innovative operational process via advanced
technology. With the increased costs of labor due to a raise in the local minimum wage, the owner of the
new Eatsa concept decided to co-create value with the customer by eliminating front of the house
employees using do-it-yourself procedures.

Teaching and Learning Objectives

The objective of this case study is to provide examples of innovation within hospitality
organizations and to have a discussion on the impact of these strategies on both organizations and
customers. The choices companies make strategically affect not only the business, but also the consumers.
The narratives within the case study provide opportunities for students to consider how innovations impact
customers and to analyze the potential benefits and ramifications for the organization. The narratives also
show that there are differences among customer preferences and reactions. This gives students an
opportunity to compare and contrast various market segments. Through this case study, students have the
opportunity to understand the integration of innovation, competitive advantage, value, and strategy and to
measure and determine the value of different strategic approaches. By the end of this session, students
should be able to:

• Understand different uses of innovation to create competitive advantages.

• Identify different areas within hospitality organizations for using innovative strategies.
• Recognize differences in customer perceptions and reactions to strategic implementations.
• Analyze how innovative strategies help create value for the consumer and for the organization.
• Evaluate the potential of using innovative strategies using Porter’s 3 Generic Strategies theory.
• Assess how innovation brings value to the consumer and to the organization.
• Propose alternate innovative strategies for hospitality organizations to create a competitive
advantage.

Target Audience
The case study aims to expand the knowledge and comprehensive skills of both undergraduate and
graduate students. It can be used in a variety of hospitality and business subjects including strategic
management, service operations, and marketing. This case study provides students with detailed
information about existing restaurants which allows for a better understanding of the general concepts of
competitive advantage and innovation. It is useful for training future hospitality leaders who will manage
in diverse business climates and will need to make strategic decisions. This case will benefit students and
potential industry managers in recognizing the significance of service and marketing innovation.

Recommended discussion questions by class

• Strategic management- 2, 3, 5, 7, 8, 12, 15
• Service operations- 4, 6, 8, 9, 12, 14
• Marketing- 1, 2, 5, 6, 7, 10, 11, 13

Discussion Questions Analysis

Little Bay Restaurant
The discussion questions for the Little Bay Restaurant focus on the core basics of promotional strategies,
segmentation, targeting, and positioning within the market, customer reactions, and pricing strategies. The
three customers in the narrative represent various market segments and their potential reactions to the
different strategic choices made by the organization. Even though innovative strategies have many possible
benefits, the organization must be prepared for the consumers who are reluctant to accept new and different
approaches to service products. An organization should consider promotional exit strategies in the case of
an unsuccessful endeavor, which can only be done if the organization understands the potential pitfalls and
advantages of the innovative strategies. It is important for organizational decision makers to consider not
only the customers and the organization as a whole, but also the employees who will be impacted by these
strategic decisions. Students should recognize that some choices may have unintended consequences,
especially to those on the line level. There is a wide variety of research that shows how employees are
crucial elements in the long term success of an organization, and the impact of the leadership’s decisions
should be considered.

Eatsa
The discussion questions for Eatsa aim to help students evaluate the impact of the structural change in the
fundamental service delivery design on customers’ perceptions, customer evaluations, co-production, and
consumption. With such an integrated shift from typical food operations, this kind of business may excite
and attract certain segments of the market, but it has the potential to alienate other segments less familiar or
comfortable with high tech solutions. Students should compare and contrast high touch and high tech
operations considering what kinds of service models depend on high touch and may not be able to
structurally change to a more high tech model. As this innovation is not only a marketing technique, but
also a strategy for low-cost leadership, the students should examine the impacts of the shift in operations
not only on customers, but also on the organization and its employees.

Questions for both Little Bay and Eatsa

For the overall group discussion that collaborates both the price promotion differentiation strategy and the
innovative technological service model low-cost leadership strategy, students should compare and contrast
the different strategic techniques of the two restaurants. The students should illustrate the similarities and
differences on brand equity, consumer perceptions, customer loyalty, organizational structure and size, and
value creation between the two concepts. Additionally, students should be able to produce their own
examples that integrate these important concepts into strategic decision making, service operations design,
and marketing strategies.

Recommended teaching approach & strategy

Prior to discussing the case study, students should understand and review competitive advantages
overall and Porter’s (1998) three strategies for competitive advantage specifically. For more information
about Porter’s (1998) three generic strategies, please see the additional reading material. Once this
foundation is created, begin the discussion with a brainstorm of innovations the students have seen through
their different experiences. The instructor may ask a question similar to the following, “Think back to your
own experiences as a customer or employee within a hospitality setting. Can you think of organizations
that had innovative strategies for competitive advantages? What were those innovations, and how
productive were those strategies?” Through brainstorming, the students will have the opportunity to be
more invested in hearing about organizations that have had successful innovative strategies.

Next, the students should be split into two groups. The first group should read the narrative and
description of the Little Bay Restaurant, and the second group should read the narrative and description of
Easta. After reading their part, the groups should be tasked with sharing the story they read and their
thoughts about the innovative strategy with the other group. As an entire class, the instructor should then
ask comprehensive and thought provoking questions such as those found in the case study discussion
questions section. In order to promote insightful discussions in the classroom, the questions should be open
ended with many different potential answers and solutions. Examples of thought provoking questions
include, “Which example provided in the case study do you believe has a greater chance to promote long
term success of the organization?”, “How can value be interpreted from the point of view of both the
organization and the customers?”, and “Why do you believe the customers had different reactions to the
innovative strategies and how can you manage those reactions as an organization?” The questions should
incorporate the theories discussed in the case study- value creation and Porter’s Generic Strategies.
Additionally, by including theories discussed in the case study in conjunction with the focus on the course,
 students will have the opportunity to not only incorporate the theories introduced within this case, but they
will also have the opportunity to integrate other theories taught through the progression of the semester.

Once the class has completed a thorough discussion of the two innovative strategies in conjunction
with the theoretical foundations for the strategic decision making, the instructor can conclude the class by
asking individuals or small groups to create their own innovative strategy for a hospitality organization. By
brainstorming and creating their own innovative ideas, the students will progress into the higher levels of
learning within Bloom’s Taxonomy, including evaluation and synthesis.

Additionally, to further higher levels of learning for graduate level classes, the discussion should
include more research based aspects. For example, during the discussion about the Little Bay Restaurant,
graduate students should consider how ownership can track profit overall and by specific market segment.
In the case of an unprofitable segment of the market, how could management create profitability or divorce
the customers in order to continue the promotion? In the case of Eatsa, graduate students could investigate
how the integration of technology into operations might alienate certain segments of the market such as
older generations. Could Eatsa consider those who are not comfortable with technology as a possible target
market? How could they manage customer inabilities with the fundamental structural change of the
operations? Graduate students should also evaluate and analyze the theories on a deeper level such as the
difference between “low-cost” and “low-price” leadership, and also incorporate other theories that are not
expressly mentioned in the text. One example could include an investigation into the types of relationship
bonds- financial, social, structural- into innovation, value, and competitive advantages by comparing and
contrasting the bonds in the narratives provided as well as external examples provided by the graduate
students. For more information on relationship bonding theory, see Shammout et al (2007).

Conclusion
In conclusion, students can enhance their thinking skills and attain a holistic perspective of service
operations by using the suggested teaching strategies. Moreover, students will be able to examine different
examples related to innovative strategies in the hospitality setting, considering external and internal
variables that could impact the service operations and marketing strategies of an organization. The
application of this case study to a variety of different hospitality and business related classes would
enhance the student’s knowledge, critical thinking, and understanding about service operations, marketing,
and innovative competitive advantages.

Additional Reading Material

Anderson, L. W., Krathwohl, D. R., & Bloom, B. S. (2001). A taxonomy for learning, teaching, and
assessing: A revision of Bloom's taxonomy of educational objectives. Allyn & Bacon.
Berry, L.L., & Parasuraman, A. (1991). Marketing Services: Competing Through Quality. New York: The
Free Press.
Fitzsimmons, J. A., & Fitzsimmons, M. J. (2006). Service management: operations, strategy, and
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