Madras Spice: The Expansion Dilemma—Scale Up or Stay Niche?

Rashmi Singh, Vijaya Batth, Leesa Mohanty

Product #:W45847

Supplier:Ivey

Discipline:Accounting, Marketing

Setting:India, 2024

Details:Case (PDF) • 9 pages • 2025-10-15

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Madras Spice, a restaurant founded in 2018 in Lucknow, Uttar Pradesh, was known for its authentic South Indian cuisine. The company recorded total sales revenue of ₹4.2 million in fiscal year (FY) 2024, a 10 per cent increase from FY 2023 to FY 2024. Although business seemed stable, the founder, Gaurav Saxena, was feeling pressure. Despite the steady growth and a loyal customer base, rising competition, increasing operational costs, and limited capital were creating pressure. In July 2024, with his year end results now complete, Saxena wondered if he should respond by maximizing the restaurant’s niche appeal or expand with a second outlet at the airport.

Learning Objectives

This case is suitable for undergraduate, postgraduate, and executive MBA courses and research scholars in general management. The case is useful for teaching cost and management accounting, project management, and marketing management. Using the case will help students achieve the following:

Use cost–volume–profit (CVP) analysis to evaluate options.
Understand the nature of costs in a business venture and the implications of achieving breakeven.
Examine situations with different estimated volumes to make informed decisions.
Calculate return on investment (ROI) on marketing investments to propose promotional strategies.
Assess brand identity and its key dimensions.
Make a decision about brand enhancement and market expansion.

Madras Spice: The Expansion Dilemma—Scale Up or Stay Niche?

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Learning Objectives