Beefeater Restaurants Microworld

Key Learning points

• Business performance over time (sales and earnings) depends on the organisations resources.
• Resources are won and lost over time (customers = sum of all customers won, minus all lost).
• Resources bring with them a characteristic contribution to the rest of the system (increasing restaurant numbers brings a diminishing incremental market opportunity).
• Growth depends on existing resources, including intangible factors (customers are won if service, menu, and environment are acceptable vs. the price charged).

• Business growth depends on winning investor support (i.e. headquarters allocation of capital expenditure). Maximising value in a mature market - difficult because market exploitation inevitably imposes limits on further opportunities to grow.
• Shareholder value reflects earnings growth, not merely earnings levels (and hence is hard to sustain).