Business and Management
Submitted By rasheni
Calveta Dining Services, Inc. was a $2 billion, privately held firm that provided food services to almost 1000 senior living facilities (SLF’s) in the United States. Antonio Calveta, the founder of Calveta Dining retired in 2007 after 35 years of leadership and he named his eldest son Frank as the new CEO and told him to double the company’s revenues within a space of 5 years. The dilemma that Frank was facing was that even after 2 years into this job of his he did not have any credible strategies to fulfill his father’s promise or to attain aggressive growth as his father wanted. Calveta Dining Services owed its success to Antonio Calveta’s passion for food, traditional family values and the customized services they offered to the SLF residents. Frank was named CEO of the company over his other siblings including his sister Jennifer Calveta who was more suited for the job, now Frank was left with the option of expanding their business by acquiring Great South West Dining (GSD) or to enter into the hospital segment and diversify their business and at least try and come close to meeting his promise to his father.
The United States Census Bureau’s survey showed that only 25% of the total SLF’s in USA had contracted to food services, this survey alone shows that there is a great potential for growth in the SLF’s segment and therefore it would have been meaningful for Frank to buy Great South West Dining but the eye popping debt figures that came before him alone are sufficient to say that it would not be a feasible solution and it would be much better decision for Frank to diversify Calveta Dining Services by extending to other segments, like providing food services to the hospitals. Few reasons why Frank should extend to other segments are. 1. Frank considered moving into the Education Sector, ad…...