Crisis Management as a Driver of Strategic Business Transformation: Restructuring Mechanisms and Profit Recovery in Food Service Enterprises

Citation: Volodymyr Tolstov, "Crisis Management as a Driver of Strategic Business Transformation: Restructuring Mechanisms and Profit Recovery in Food Service Enterprises", Universal Library of Innovative Research and Studies, Special Issue.

Copyright: This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The COVID-19 pandemic triggered a sharp decline in demand for foodservice and forced small urban ventures to rebuild their business models within a compressed timeframe. The article traces how a set of crisis management decisions in the independent gastropub Magarych Pub in 2020–2021 reduced the break-even point, restructured sales channels, and restored profitability by 2022. The study focuses on foodservice enterprises under pandemic shock, with the specific research subject being the mechanisms of restructuring and transitioning to sustainable profit, illustrated by the case of a small urban gastropub. The analysis encompasses the pre-crisis period of 2018–2019, the phase of restrictions from 2020 to 2021, and the initial recovery in 2022. The empirical base consists of Magarych Pub’s managerial reports on revenue, costs, and margins, as well as menu and operational data, along with qualitative descriptions of decisions and mistakes drawn from the author’s professional experience. The external environment is reconstructed using international statistical reviews and industry studies of the restaurant sector, focusing on revenue dynamics, the expansion of off-premise channels, digital transformation, and anti-crisis strategies in the HoReCa sector from 2019 to 2022. The methodological framework combines a case-study design, time-series analysis, calculation and interpretation of the break-even point, structural analysis of revenue and costs, and comparison with practices of large chains and independent restaurants described in the contemporary literature on crisis management and turnaround management in hospitality. The findings show that a combination of strict control over fixed costs, menu simplification, reorientation towards delivery and takeaway, and maintenance of regular guests’ trust through communication and events during periods of eased restrictions leads to a sustainable transformation of the business model of a small gastropub. The practical contribution lies in assembling a set of managerial decisions suitable for replication in small foodservice enterprises facing demand shocks and regulatory constraints on operating formats.

Keywords: Crisis Management, Anti-Crisis Governance, Restructuring, Food Service Enterprises, Cost Management, Guest Retention, Digitalisation, COVID-19.

https://doi.org/10.70315/uloap.ulirs.2023.002