The Pizza Wars Come to Campus “Source: This case was prepared by Dr. Brooke Saladin, Wake Forest University, as a basis for classroom discussion. Renee Kershaw, manager of food services at a medium-sized private university in the Southeast, has Just had the wind taken out of her sails.
She had decided that, owing to the success of her year-old pizza service, the time had come to expand pizza-making operations on campus. However, yesterday the university president announced plans to begin construction of a student center on campus that would house, among other facilities, a new food court.
In a departure from past university policy, this new facility would permit and accommodate food-service operations from three private organizations: Dunkin’ Donuts, Taco Bell, and Pizza Hut. Until now, all food service on campus had been contracted out to BSB, Inc , a large, nationally operated food-services company serving client organizations. The level of service provided varies, depending on the type of market being served and the particular contract specifications.
The company is organized into three market-oriented ivisions: corporate, airline, and university or college. Kershaw, of course, is employed in the university or college division. At this particular university, BSB, Inc. , is under contract to provide food services for the entire campus of 6,000 students and 3,000 faculty, staff, and support personnel. Located in a city of approximately 200,000 people, the campus was built on land donated by a wealthy industrialist.
Because the campus is somewhat isolated from the rest of the town, students wanting to shop or dine off campus have to drive into town.
The campus itself is a walking” campus, with dormitories, classrooms, and supporting amenities such as a bookstore, sundry shop, barber shop, branch bank, and food-service facilities”all within close proximity. Access to the campus by car is limited, with peripheral parking lots provided. The university also provides space, at a nominal rent, for three food-service facilities. The primary facility, a large cafeteria housed on the ground floor of the main administration building, is located in the center of campus. This cafeteria is open for breakfast, lunch, and dinner daily.
A second location, called the
Dogwood Room, on the second floor of the administration building, serves an upscale luncheon buffet on weekdays only. The third facility is a small grill located in the corner ofa recreational building near the dormitories. The grill is open from 11 A. M. to 10 P.
M. daily and until midnight on Friday and Saturday nights. Kershaw is responsible for all three operations. THE PIZZA DECISION BSB, Inc. , has been operating the campus food services for the past 10 years”ever since the university decided that its mission and core competencies should focus on education, not on ood service.
Kershaw has been at this university for 18 months. Previously, she had been assistant manager of food services at a small university in the Northeast. After 3 to 4 months of getting oriented to the new position, she had begun to conduct surveys to determine customer needs and market trends. An analysis of the survey data indicated that students were not as satisfied with the food service as Kershaw had hoped. A large amount of the food being consumed by students, broken down as competition from other types of snack foods (Dunkin’ Donuts) and fast foods (Taco Bell).
Of more concern, Pizza Hut was going to put in a facility offering a limited menu and providing a limited selection of pizzas on a “walk-up-and-order” basis. Phone orders would not be accepted nor would delivery service be available. Kershaw pondered several crucial questions: Why had demand for pizzas leveled off? What impact would the new food court have on her operations? Should she expand her pizza operations?