Red Lobster, the popular seafood restaurant chain famous for its shrimp and biscuits, recently filed for bankruptcy. Crippled by a combination of mismanagement, dwindling traffic, and financial blunders, the chain is a perfect case study of how not to operate in the restaurant business.
The company's decision to have its majority owner, Thai Union, as its primary shrimp supplier was one strategic misstep. Coupled with its now infamous “Endless Shrimp” deal for $20, which was heavily promoted in its restaurants, Red Lobster swallowed $11 million in losses on the all-you-can-eat deal.
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