Harvard Case - El Coyote Mexican Cafe in the Wake of Proposition 8
"El Coyote Mexican Cafe in the Wake of Proposition 8" Harvard business case study is written by Brian K. Richter, Anisha George. It deals with the challenges in the field of Social Enterprise. The case study is 17 page(s) long and it was first published on : May 9, 2012
At Fern Fort University, we recommend El Coyote Mexican Cafe adopt a hybrid organizational model that leverages its existing brand equity and customer loyalty to champion social change. This strategy involves integrating social entrepreneurship into its core business operations, creating a shared value creation model that benefits both the company and the LGBTQ+ community. By aligning its business goals with social impact, El Coyote can not only navigate the current political climate but also establish itself as a leader in corporate social responsibility (CSR), attracting new customers and strengthening its existing relationships.
2. Background
El Coyote Mexican Cafe, a beloved Los Angeles institution, faced a significant challenge following the passage of Proposition 8, a California ballot measure that banned same-sex marriage. The cafe, known for its inclusive atmosphere and loyal LGBTQ+ clientele, found itself at the heart of a social and political debate. This case study examines how El Coyote can navigate this complex environment and leverage its brand to champion social change while maintaining its business success.
The main protagonists of this case are:
- The El Coyote owners and management team: They must navigate the changing social and political landscape, balance business needs with social responsibility, and maintain customer loyalty.
- The LGBTQ+ community: This group is a core customer base for El Coyote and is directly impacted by Proposition 8. Their views and preferences are crucial for El Coyote's success.
- The broader community: This includes customers who may have differing opinions on Proposition 8 and the cafe's stance. El Coyote must consider the needs and perspectives of this diverse group.
3. Analysis of the Case Study
This case study can be analyzed through the lens of stakeholder theory, which emphasizes the importance of considering the interests of all stakeholders, including customers, employees, investors, and the community.
Key considerations include:
- Brand reputation: El Coyote's reputation as an inclusive and welcoming establishment is a valuable asset. However, the passage of Proposition 8 has the potential to damage this reputation, particularly among LGBTQ+ customers.
- Customer loyalty: El Coyote enjoys strong customer loyalty, particularly from the LGBTQ+ community. Maintaining this loyalty is critical for the cafe's continued success.
- Social responsibility: The cafe has a strong commitment to social justice and inclusivity. It must decide how to express this commitment in a way that aligns with its business goals.
- Financial sustainability: El Coyote needs to ensure its business operations remain profitable while pursuing social change initiatives.
Framework for Analysis:
SWOT Analysis:
- Strengths: Strong brand reputation, loyal customer base, established location, experienced management team.
- Weaknesses: Potential for reputational damage, limited resources for social initiatives, potential for customer backlash.
- Opportunities: Leverage brand equity for social change, attract new customers through CSR initiatives, build stronger community relationships.
- Threats: Negative public perception, economic downturn, competition from other restaurants.
Porter's Five Forces:
- Threat of new entrants: High, due to the relatively low barriers to entry in the restaurant industry.
- Bargaining power of buyers: Moderate, as customers have many dining options.
- Bargaining power of suppliers: Low, as there are many suppliers of food and beverages.
- Threat of substitute products: High, as customers can choose to eat at home or at other types of restaurants.
- Competitive rivalry: High, as there is a large number of restaurants competing for customers.
4. Recommendations
El Coyote should:
- Adopt a hybrid organizational model: This model combines for-profit business operations with social impact initiatives. This allows El Coyote to leverage its existing business infrastructure and resources while creating a positive social impact.
- Develop a clear and concise social mission statement: This statement should articulate El Coyote's commitment to social justice and inclusivity, specifically focusing on supporting the LGBTQ+ community. This statement will guide all social impact initiatives.
- Implement a 'Shared Value Creation' strategy: This approach identifies opportunities to create value for both the business and the community. For example, El Coyote could partner with LGBTQ+ organizations to host fundraising events, donate a portion of its profits to LGBTQ+ charities, or offer special discounts to LGBTQ+ customers.
- Engage in strategic partnerships: El Coyote should collaborate with LGBTQ+ organizations, non-profits, and other businesses to amplify its social impact. These partnerships can provide access to resources, expertise, and a wider network.
- Develop a robust social impact measurement framework: This framework will track the progress of El Coyote's social initiatives and demonstrate the positive impact it is having on the community. This data will be essential for reporting and fundraising purposes.
- Communicate its social commitment transparently: El Coyote should clearly communicate its social mission and its commitment to supporting the LGBTQ+ community through its website, social media, and in-store materials. This transparency will build trust with customers and attract new ones who share its values.
- Offer employee training on LGBTQ+ sensitivity and inclusivity: This training will ensure that all employees are equipped to create a welcoming and inclusive environment for all customers.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: El Coyote's core competencies lie in its culinary expertise, customer service, and brand reputation. The proposed hybrid model leverages these strengths to create a positive social impact, aligning with its commitment to inclusivity.
- External customers and internal clients: The recommendations address the needs of both external customers (LGBTQ+ community and broader community) and internal clients (employees). By creating a more inclusive environment and supporting LGBTQ+ organizations, El Coyote can attract and retain customers while fostering a positive work environment.
- Competitors: By embracing social entrepreneurship, El Coyote can differentiate itself from competitors and attract customers who value social responsibility.
- Attractiveness: The proposed model offers a strong return on investment through increased customer loyalty, brand recognition, and positive media attention. The social impact initiatives can also attract investors seeking to support socially responsible businesses.
6. Conclusion
By embracing a hybrid organizational model and integrating social entrepreneurship into its core business operations, El Coyote Mexican Cafe can navigate the complex social and political landscape while maintaining its business success. This approach allows El Coyote to leverage its existing strengths, build stronger community relationships, and establish itself as a leader in corporate social responsibility.
7. Discussion
Other alternatives not selected:
- Ignoring the issue: This option would risk alienating LGBTQ+ customers and damaging the cafe's reputation.
- Taking a purely political stance: This could alienate customers with differing views and potentially lead to boycotts.
- Focusing solely on financial sustainability: This would neglect the cafe's social responsibility and potentially damage its brand image.
Risks and key assumptions:
- Customer backlash: There is a risk that some customers may be unhappy with El Coyote's social stance.
- Financial constraints: Implementing social initiatives requires resources, and El Coyote must ensure these initiatives are financially sustainable.
- Competition: Other restaurants may adopt similar strategies, increasing competition.
8. Next Steps
Timeline with key milestones:
- Month 1: Form a task force to develop a social mission statement and identify potential social impact initiatives.
- Month 2: Conduct research and identify potential partners for social initiatives.
- Month 3: Develop a social impact measurement framework and implement initial social initiatives.
- Month 6: Evaluate the success of initial initiatives and adjust strategies as needed.
- Year 1: Establish a formal social entrepreneurship program and expand partnerships with LGBTQ+ organizations.
By taking these steps, El Coyote can successfully navigate the complexities of Proposition 8 and emerge as a leader in social entrepreneurship, creating a positive impact on both its business and the community.
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Case Description
The El Coyote Mexican Caf�, more commonly known as �El Coyote,� is a family owned restaurant located in Los Angeles, California. The restaurant faced criticism from pro-gay rights activists after the manager, and daughter of the owner, made a personal donation to support California Ballot Proposition 8, which activists associated with the restaurant rather than the individual. The case transpires over an eight-day period from November 4, 2008, which was the election day when the ballot proposition passed, to November 12, 2008 which was when the manager held an open breakfast at El Coyote to publicly discuss the issue.The central tension in the case revolves around how the manager�s donation to support a measure that legally defines marriage as �between a man and a woman� has garnered the restaurant with unwanted attention despite being a personal contribution separate from and not endorsed by the business. The goal of the case is to challenge students to think about tensions firms face in managing the external environment of their businesses in the face of both: (i) campaign finance and election issues; and, (ii) activists who may not understand all of the underlying facts.
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