Creative Shock'20 Case, First Round

1. Finding harmony through food
Creative Shock’20 Preliminary Case Study

2. 2 |
Business overview
• “Green Harmony” is a healthy lifestyle restaurant/salad bar. The
business not only prepares and delivers high quality, delicious
food, but also helps to reintegrate socially excluded groups back
into society.
• The social enterprise team focuses on reintegration of young
drug and alcohol addicts, as well as ex-convicts by using a “work
rehabilitation” programme. For a six-month period participants of
the programme can develop work skills as waiters, cooks or
bartenders while also continuing with their therapy and/or
education. Participants finish the programme with a qualification
and an employer’s reference that should help them to find a
permanent job.
• “Green Harmony” aims to change society’s perception towards
former drug users and ex-convicts and is organising many
different social events related to this topic.

3. 3 |
Overview of “Green Harmony” social model
• Even after successful rehabilitation programmes, many former drug addicts and ex-
convicts often take up their old habits. This is mainly driven by the absence of proper
professional work skills, a patchy work history and a negative attitude of employers
and society in general towards this social group.
• During rehabilitation programmes professional help is usually provided in a protected
environment. After finishing these programmes many participants need to face every-
day problems alone without any support; this is also a key factor why they tend to start
using drugs or commit crimes again.
• Relapse is a major problem; therefore, reintegration of ex-addicts and former convicts
into society involves a complicated mix of psychological coaching and training.
• “Green Harmony” seeks to find solutions to all of these problems by:
− Providing training and employment to the participants
− Providing professional rehabilitation in a non-protected environment (free
consultations by social workers and psychologists)
− Providing personal development and coaching to build self-confidence
− Providing required financial support (salary, public transport tickets, etc.)
− Supporting and mediating in finding further jobs
• “Green
Harmony”
approach
• Social
problem

4. 4 |
“Green Harmony” restaurant concept was revamped to build more sustainable
business model
• In 2019 “Green Harmony” was not able to receive enough funding from social and
governmental institutions to remain profitable and maintain rehabilitation programme
at the same scale.
• The management team of “Green Harmony” where evaluating different ways how to
create a fully sustainable social business and be less dependent on donations and
government funding. They came up with a new restaurant concept, which is more
focused on family dining and would have longer work hours (previously restaurant
were open from 9am to 3pm on workdays and Saturday). This way they were aiming
to attract larger groups of visitors to the restaurant.
• They also expanded restaurant menu to 52 salad dishes and added 8 types of healthy
drinks and green cocktails. To put the focus on their new dishes company also
removed daily lunch combo from the menu.
• Company revamped its restaurant in few months and re-opened in March of 2020.
The new concept was a success as number of restaurant visitors grew by ~75%, while
restaurant revenue by almost 20%. Also, restaurant busiest time shifted from
lunchtime during workdays to evenings and weekends.
• However, this revenue increase is not enough to cover all potential company losses in
2020 (and potentially in 2021 as well), as only 100 thous. Eur were raised for 2020
period from donations & government funds, while costs remained at the same level as
in 2019.
2019 3-09 2020 3-09
154.148
87.510
+76%
Number of restaurant visitors,
2019 03-09 vs 2020 03-09
477.989
2019 3-09 2020 3-09
568.075
+19%
Revenue from restaurant activities,
2019 03-09 vs 2020 03-09
EUR

5. 5 |
Although income from revenue business continued to grow in 2019, company
reported its first annual loss
Revenue breakdown, 2016-2019
Thous. EUR
EBITDA and EBITDA margin, 2016-2019
Thous. EUR
2018
761,2
200,0
629,9
2019
771,4
1.100,5
Revenue from
sold goods/
services
2020
(Forecast)
Donations,
funding
504,9
125,0
2017
376,0
2016
670,6
340,0
724,5
1.010,6
961,2
871,4
100,0
+8%
2016
2,5%
2019
4,1%
-12,0%
4,3%
2017 2018
-5,6%
2020
16
42 47
-115
-49
EBITDA
Margin, %
Forecast was done for 10 months
(2020.03 -2020.12) period when
restaurant is fully operational. All
restaurant revamp costs were
excluded from estimation to make it
more comparable with previous years.

6. 6 |
Your Task
Your Task
• “Green Harmony” Board of Directors is planning to meet and discuss restaurant
performance after the re-launch.
• BOD of the company hired your consultant team to help management team to
analyze restaurant results from the strategic perspective and provide
recommendations how to improve restaurant results.
• After discussion with the management team you agreed to focus on following
topics:
Situation
• Provide your hypothesis why restaurant revenue didn’t grow as fast as number
of visitors after the re-launch. Which revenue drivers/ KPIs indicate these reasons
or prove your hypothesis (all necessary information required to answer this
question is provided in the back up)?
• Based on your findings, provide your recommendations what actions the
management team of “Green Harmony” could take to increase restaurant
revenue.
1
2

7. 7 |
BACK UP

8. 8 |
Overview of Menu changes
Breakfast
Lunch
Main
Menu
Menu type Before re-launch After re-launch
• Breakfast menu was limited only to few
dishes. It was available only on Saturdays
• “Breakfast menu remained the same,
however due to longer work hours became
• During lunchtime “Green Harmony” offered
a special lunch combo (usually consisting of
a soup and the main salad dish) for an
affordable price
• It is one of the busiest times of the day, as
many people from business centres nearby
are having lunch
• Lunch combo was removed from the menu
in order to put more emphasis on the dishes
in the revamped Main menu
• Restaurant offers only 8 salad dishes and 2
types of desserts in their main menu
• Only few customers were selecting dishes
from the main menu, as the daily lunch
combo were always the most preferred
option due to its price
• Main menu was expanded to 52 salad
dishes. 8 types of healthy drinks and green
cocktails were added to the menu as well.
Dessert section were expanded to 4 dishes
as well.
Note: Company does not sell any alcohol or tobacco products. Even though selling alcohol and tobacco items would help to improve revenue and profit, social
responsibility and the well-being of employees are and will be the main priority for the „Green Harmony“ management.

9. 9 |
Monthly restaurant KPIs
2019 05
10.644
11.292
2019 04
26.056
24.664
2019 01 2019 07
2019 02 2019 03
14.932
2019 06
11.264
2020 07
2019 08 2019 09
10.218
2019 10 2019 11 2020 01
2019 12 2020 08
2020 02 2020 03
22.277
2020 04 2020 05
21.481
2020 06 2020 09
9.522
13.802 12.540 11.066 12.436 11.190
19.890 20.288 19.492
11.442
Number of visitors 2019.01-2020.09
Number of receipts 2019.01-2020.09
Monthly revenue (restaurant only) 2019.01-2020.09, EUR
2019 09
2019 05 2019 06 2020 04
2019 03 2019 04
2019 01 2019 07
2019 02
8.304
2019 08 2019 10
8.526
2019 11
6.901
2019 12 2020 01 2020 02
7.544
2020 07
2020 03
6.140
5.848
2020 05 2020 06 2020 08 2020 09
6.491
7.833
8.655
6.724
6.959 7.602
6.667 6.491 6.842 6.932
8.481
7.140 7.348
2019 01 2019 02 2019 03 2019 04 2019 06 2019 07 2019 08 2020 07
2019 09
80.755
2019 10 2019 11 2019 12
87.218
2020 01 2020 02 2020 03
69.487
2020 04
2019 05 2020 05 2020 09
2020 06 2020 08
71.211
52.642 57.380
95.437
61.591 61.065
73.172 76.350
82.122
62.644 68.435
57.906 54.221
73.413
83.691
60.538
Number of items sold 2019.01-2020.09
2020 07
2019 08
2019 01 2019 10
2019 02 2020 05
2019 07
15.880
2019 03
14.130
2019 05 2019 06 2019 09 2019 11 2019 12 2020 01 2020 02 2020 03 2020 04
2019 04
13.504
2020 08 2020 09
12.504
19.277
14.380
18.006 19.131
16.130
14.630 13.629
16.672
14.255 13.254
17.367
21.747
18.235
22.751
18.409
2020 06
Closed for
revamp

10. 10 |
Daily restaurant KPIs
82 75 79 92
49 42
Tuesday Thursday
Wednesday
Monday Sunday
Friday Saturday
49 50 49
56
24 22
Sunday
Monday Tuesday Wednesday Saturday
Thursday Friday
411 414 460 512
269 243
Wednesday
Monday Sunday
Tuesday Thursday Friday Saturday
Avg. number of visitors per day
Avg. number of receipts per day
Avg. revenue per day, EUR
Avg. number of items sold per day
98 103 108 120
59 50
Tuesday Friday
Monday Sunday
Saturday
Thursday
Wednesday
95 87 91 92
128 140
111
Saturday
Tuesday Friday
Monday Thursday
Wednesday Sunday
39 41 36 36 41 39 37
Saturday
Monday Wednesday
Tuesday Thursday Sunday
Friday
323 326 362 403 436 488
388
Saturday
Monday Sunday
Tuesday Wednesday Thursday Friday
Avg. number of visitors per day
Avg. number of receipts per day
Avg. revenue per day, EUR
Avg. number of items sold per day
91 90 95 95 95 86 86
Friday
Tuesday
Monday Wednesday Sunday
Thursday Saturday
Before re-launch After re-launch
Closed

11. 11 |
TOP 5 most popular “Green Harmony” menu items (based on purchase frequency)
1
2
3
4
5
• Lunch Deal
• Fried chicken salad with feta cheese
• Bean salad with tomatoes and paprika
• Caesar salad
• Hot Mexican chicken salad
Dish name Price, EUR
• 3.5
• 5
• 5
• 5
• 5
No.
1
2
3
4
5
• Green cocktail
• Fried chicken salad with feta cheese
• Strawberry cocktail
• Hot Mexican chicken salad
• Caesar salad
Dish name Price, EUR
• 3
• 5
• 5
• 3
• 5
No.
Before re-launch After re-launch

12. 12 |
Main definitions
Visitor – person who visited the restaurant (e.g., if 3 people were seated at the same table, they would be accounted as 3 visitors)
Receipt – a document acknowledging that a table/ person paid for the ordered items
Item sold – dishes and drinks ordered from the menu
Monthly revenue – revenue generated from restaurant activities during calendar month period