EASTERN INTERNATIONAL

FOOD SERVICE
CORPORATION

Case Analysis
Maylyn Vergara

VIEWPOINT

Eastern

International Food Service Corp. Ocean Point

Division faces an issue of whether its contract of lease with
Ocean Point will be renewed or not.
With no clear communication, rumors of EI not returning
next summer have spread.
As a result, EI employees work behaviors have changed
negatively resulting to tremendous decline in sales and
profits of EI.

PROBLEM
Increase of labor turnover rate, decline of employee
morale, increase of food cost percentage and
decrease of profits of EI Corp because of
managements
failure
to
provide
clear
communication to its employees.

OBJECTIVE
To reduce labor turnover rate by at least 80%, food
costs by at least 80% and increase sales to an
amount close to the defined target within the
remaining two weeks.

AREA OF CONSIDERATION / SWOT

STRENGTHS
Capacity to offer 20-25% salary increase or promotion to
returning employees
Large number of concession stands or branches operating in
various target markets
WEAKNESS
Managements lack of rumor control
OPPORTUNITY
Achievement of desired labor turnover rate, employee
performance, food cost percentage and profit margin
THREATS
Significant decline of profit margin
Closure of business operation in Ocean Point Park

ALTERNATIVE COURSE OF
ACTION
A. Immediately communicate the issue to the
employees and convince them to support the
interest of the company despite the issue on hand.
B. Immediately communicate and coordinate with
Ocean Point management the contract renewal to
clear the ambiguity.
C. Do nothing. Only two weeks left anyway. Just
recover the lost profit next year or in other
areas/target markets.

RECOMMENDATION
I recommend B
Immediately communicate and coordinate with
Ocean Point management the contract renewal to
clear the ambiguity.

PLAN OF ACTION

A. Conduct a meeting with Ocean Point management with

regards to the contract renewal.
B. Once a decision has been made, communicate it directly to
the employees and verify that the rumor is not true.
C. If the decision made is to renew the contract, motivate the
employees to improve their performance by offering a 30%
pay increase as they return for work next year.
D. If the decision made is not to renew the contract, motivate
the employees to improve their performance by offering
them bonuses once profit targets are met.
E. Contact resigned employees and convince them to come back
to EI.
F. To avoid or minimize such harmful rumors, EI must start
having an Open Door policy to encourage employees to
share their work problems or uncertainties creates
transparency.