The answer is in the text:

"fleshing out two dramatically different alternatives – becoming a cheap Red Lobster or a fish McDonald’s – helped executives at the Long John Silver’s chain of restaurants understand the strategic choices that they had to make. They had been trying to do a bit of everything, and this exercise showed them that their initiatives – such as offering early-evening table service and expanding drive-through service – were strategically inconsistent."

This wasn't working, so they opted to focus on ONE strategic directions, namely, becoming a fish McDonald’s.





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Note added at 39 mins (2023-11-17 18:19:58 GMT)
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sorry, I meant to also make this bit bold:

"helped executives at the Long John Silver’s chain of restaurants understand the strategic choices that they had to make."

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Note added at 43 mins (2023-11-17 18:23:28 GMT)
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on a whim, I thought I'd ask ChatGPT (v. 4), to save me some time; here's what it said:

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MY QUESTION:

what does "becoming a cheap Red Lobster or a fish McDonald’s" mean in:

"The creative part of developing strategy is finding the sweet spot that aligns the firm’s capabilities with customer needs in a way that competitors cannot match given the changing external context – factors such as technology, industry demographics, and regulation. We have found that one of the best ways to do this is to develop two or three plausible but very different strategic options. For example, fleshing out two dramatically different alternatives – becoming a cheap Red Lobster or a fish McDonald’s – helped executives at the Long John Silver’s chain of restaurants understand the strategic choices that they had to make. They had been trying to do a bit of everything, and this exercise showed them that their initiatives – such as offering early-evening table service and expanding drive-through service – were strategically inconsistent. (Competing on the basis of table service requires bigger restaurants and more employees, while drive-through service requires high-traffic locations and smaller footprints.) As a result, they chose to be a fish McDonald’s, building smaller restaurants with drive-through service in high-traffic locations."

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CHATGPT'S ANSWER:

In the context of this passage, "becoming a cheap Red Lobster or a fish McDonald's" refers to two contrasting strategic directions that a business, in this case, the Long John Silver’s chain of restaurants, could take.

(1) Becoming a Cheap Red Lobster: Red Lobster is known as a mid-range seafood restaurant chain. So, becoming a "cheap Red Lobster" would imply focusing on offering seafood dining experiences at lower prices than Red Lobster, possibly with a more casual or simplified service model. This strategy would still involve sit-down dining but would aim to make it more affordable and accessible.

(2) Becoming a Fish McDonald's: McDonald's is globally recognized for its fast-food service model, characterized by quick service, low prices, and convenience. In this scenario, "becoming a fish McDonald's" means adopting a fast-food model for seafood, focusing on drive-through service, speed, high-traffic locations, and smaller restaurant footprints. This would be a move away from traditional sit-down dining to a quick-service format.

The overall point being made is about the importance of strategic clarity and consistency in business. Long John Silver's, by considering these two very different strategies, realized that their existing approach was inconsistent – they were trying to offer both table service (which requires a certain type of restaurant setup) and drive-through service (which requires a different setup). This exercise helped them understand the need to choose one strategic direction that aligns with their capabilities and market needs, leading them to opt for the "fish McDonald's" model. This decision aligns their operational model with a clear strategic focus, ensuring consistency in their business approach.