Case
Teaching Notes
Supplementary Resources
Abstract
If you had to wait for two hours before you can get a table at a certain restaurant, would you still choose to dine there? Even though a long wait does not appeal to anyone, you might be surprised to find that the front lobbies of Haidilao Hot Pot restaurants are frequently filled with groups of friends and families waiting for one or two hours to dine. Why do they choose to wait here patiently while there are alternative restaurants nearby?
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1 Customers Waiting in the Lobby
Source: Haidilao Restaurant
Exhibit 2 Changes in China's Per Capita Consumption of Dining between 1978–2007
(RMB)
Data Source: The Report on the Development of China's Service Industry
Exhibit 3 Changes in the Scale of China's Dining Industry between 1978–2007
Data Source: National Statistics Bureau
Exhibit 4 A Comparison of the Development of the Dining Industry in Eastern, Central, and Western Regions of China in 2008
Number of Provinces | Retail Sales (Billion RMB) | Percentage of National Retail Sales | Growth Rate | |
Nationwide | 33 | 1540.39 | 100.00% | 24.70% |
Eastern | 11 | 861.08 | 55.90% | 25.10% |
Central | 8 | 377.39 | 24.50% | 24.60% |
Western | 12 | 301.92 | 19.60% | 24.20% |
Data Source: National Statistics Bureau
Exhibit 5 The Haidilao Hot Pot and Its Unique Services
Source: Haidilao Company
Exhibit 6 Key Business Data of a Typical Haidilao Restaurant
Cost Structure
Assets Structure
Data Source: Haidilao Company
Note: by Dec 31st 2010, this restaurant has 217 employees. Table Turnover Rate = 4.37
Table Turnover Rate Formula: No. Tables Served ÷ No. of Tables
Exhibit 7 Haidilao Restaurants, Logistics Centers and Manufacturing Bases in China
Data Source: Haidilao Company
Exhibit 8 Haidilao's Annual Growth
2007 | 2008 | 2009 | 2010 | |
Number of Restaurants | 23 | 32 | 39 | 48 |
Annual Revenue (in million RMB) | 201.4 | 515.9 | 896.9 | 1449.2 |
Annual Profit (in million RMB) | 14.4 | 53.7 | 124.4 | 194.2 |
Data Source: Haidilao Company
Exhibit 9 Haidilao's Beijing Logistics Center
Data Source: Haidilao Company
Exhibit 10 A Comparison of the Organizational Structure Before and After Reform
Organizational Structure Pre-Reform
Organizational Structure Post-Reform
Data Source: Compiled and Organized by the Case Author According to Company Details
Exhibit 11 The Growth of the Little Sheep Chain Restaurants between 1999 and 2010
Data Source: Compiled by the Case Author Using Public Data
Exhibit 12 The Little Sheep's Income and Cost Structure
The Little Sheep's Income Structure (in thousand RMB) | ||||
---|---|---|---|---|
2007 | 2008 | 2009 | 2010 | |
Restaurant Dining Business | 750,867 | 1,010,690 | 1,223,382 | 1,476,204 |
Food Sales | 170,479 | 239,858 | 313,773 | 417,728 |
Special Business | 26,375 | 18,886 | 30,887 | 30,848 |
Management Services | 1,453 | 2,089 | 1,658 | 720 |
Total | 949,174 | 1,271,523 | 1,569,700 | 1,925,500 |
The Little Sheep's Cost Structure (in thousand RMB) | ||||
---|---|---|---|---|
2007 | 2008 | 2009 | 2010 | |
Cost of Inventories Sold | 377,073 | 524,390 | 650,545 | 850,500 |
Employees | 165,886 | 257,342 | 308,795 | 353,128 |
Depreciation and Amortization | 32,096 | 40,591 | 54,561 | 74,612 |
Space Rental | 96,904 | 119,534 | 142,911 | 155,823 |
Gas & Public Utilities | 41,892 | 55,752 | 66,381 | 78,307 |
Other Operational Costs | 94,895 | 131,947 | 165,114 | 200,912 |
Finances | 20,610 | 6,603 | 408 | 2,343 |
Data Source: The Little Sheep's Annual Reports
Exhibit 13 The Little Sheep's Balance Sheet
The Little Sheep's Balance Sheet (in thousand RMB) | ||||
---|---|---|---|---|
2007 | 2008 | 2009 | 2010 | |
Current Assets | 408,928 | 681,515 | 588,214 | 750,337 |
Non-current Assets | 366,113 | 482,308 | 682,715 | 829,498 |
Current Liabilities | 273,787 | 206,667 | 224,344 | 360,369 |
Non-Current Liabilities | 196,939 | 7,260 | 8,763 | 60,486 |
Data Source: The Little Sheep's Annual Reports
Exhibit 14 The Little Sheep's Business Data
The Little Sheep's Business Data (in thousand RMB) | ||||
---|---|---|---|---|
2007 | 2008 | 2009 | 2010 | |
Guest Seating Rate | 1.40 | 1.35 | 1.34 | 1.42 |
Number of Employees | N/A | N/A | 13,957 | 14,498 |
Percentage of Earnings Abroad | N/A | N/A | 9.55% | 7.01% |
Guest Seating Rate Formula: Total No. of Guests ÷ Total No. of Seats (in a day)
Data Source: The Little Sheep's Annual Reports
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved