The Cheesecake Factory | | | | The Cheesecake Factory Oscar and Evelyn Overton had always dreamed of owning a successful business. Their dream started in the late 1940’s when Evelyn, an exceptional cook and who created the original cheesecake recipe, opened her first tiny cheesecake shop in Detroit. However, she had given up on that dream and closed her shop to raise her two children, David and Renee. She continued to supply her cheesecakes to the finest restaurants in town by baking the cheesecakes in her basement. By 1971, the children were grown and Oscar and Evelyn, now in their early fifties, made the decision to move their basement shop to Los Angeles, California.
Identification of Business Model Since the existence of Panera Bread, the market for bakery-café is substantially growing, mainly because it is a “niche” market, and companies within this market have been enjoying high revenues and profits for a long time. What people in the US needed, was a fast-casual restaurant service with high quality food offered at a reasonable price. This is the sweet spot Panera Bread took eliminating McDonald’s, Subway, Wendy’s and other chains as direct competitors. It’s success lies in the business model it has, meaning that Panera Bread serving its existing and potential customers high quality food as artisan bread, sandwiches, soups and coffees at a very reasonable price, thus experiencing high growth in the past decade, more precisely having 1325 Panera Bread stores across the US and Canada. Such rapid growth is mainly achieved through franchising which will be discussed critically later in this paper.
But, while the pizzas are now made using a conveyer oven from dough that is made in a central kitchen, frozen and then delivered to each restaurant, the sauce had not changed at all. And that was the key to their growth. While old customers knew that the pizzas were not as good, new customers only knew that they were better pizzas than Checker's competitors made. Even still, the pizza business had fallen on hard times by the late 80's. Competition for customers in the fast food business had soared and the weak economy at that time had slowed business for everybody.
From kettles and toasters to cooking, cleaning and garment care, each and every product is intended with the consumer in mind to offer the decisive in performance, practicality, ease of use and style. ( http://www.russellhobbs.co.uk/about/#1) The name of Russell Hobbs recognised as a leading small kitchen appliance brand in the UK by nine out of ten consumers and has won many awards and product accreditations by leading institutes and organisations. From day one the company was always in profit. It because of the understanding capability of customer needs and demand. And also the new product innovation through introducing new technology their products are always successful in the market.
Threat of new entrants: The threat of new entrants is high. The major barriers for a startup to enter the industry are the economies of scale and the distribution channels necessary to be profitable. Due to the relatively little differentiation among companies in the industry, customers tend to visit the closest and most convenient store instead of sticking to a particular one, which makes wide distribution of the business quite essential for the fast food restaurants. Threat of substitutes: The threat of substitutes is also high. Firms in the fast food industry and home meal replacements have to continuously innovate to maintain various product differentiations and high quality of food and service in order to stand out against competitors.
Today, there are over 11,000 stores – including more than 5,000 outside the United States.” (Domino’s) Unfortunately, Domino’s was previously agreed by Americans that their home delivery pizzas were among the worst, and they had to do something about it. In lieu of the news, they invested in new informational systems in order to compete against their top competitors including Pizza Hut, Papa John’s, and Little Caesars to achieve their vision of delivering excellent customer service and goods pizzas. (Laudon) Their business strategy to improve identified an overhaul with the in store
By taking the first mover approach Papa John’s was able to capture a larger market size while their competitors rushed to catch up. After researching Papa John’s further, I concluded that there are several risks and opportunities currently facing the company. I believe that the pizza market is somewhat saturated. Take for example Bend; there are dozens of pizza parlors all around the area and only more are showing up. The barriers to entry for this specific market are somewhat low, and it can be difficult for existing companies to keep their market share (see figure 2).
Even though the U.S. economy has been suffering greatly since mid 2000, Sara Lee has maintained market share in the core products that included foodservice, beverages, bakery items, body care, and household items. A current split of the company has been noticed and that may indicate a possible sale of its international business, leaving open rivals to finance an acquisition. The brand mix of similar products – unique brands – gives Sara Lee a strong competitive advantage over the competition with product effectiveness that reduces over all costs and drives up margins. Using a cross-mix strategy would remove the potential selling of one division or other, which would reassure investors that the company has a long-term strategy to maintain both the North America and International operations. The company is in a great cash position to develop long term strategies by using innovation, private labeling and marketing to generate new growth among other retail locations – reducing the overall dependency on Wal-Mart.
Success in these categories allowed Sara Lee to invest and acquire other non-related and related organization to further diversify their portfolio. Because of the diversifying, in terms of products and geography expansion, the company created creating problems for mangers as they were unable to deal with the diversification issue. As a result, a retrenching strategy was put into practice by the company to ensure that every business division was profitable and would close business divisions that were not highly lucrative. After retrenchment, Sara Lee was able to focus on its food and beverage and foodservice industry. The company has successfully used its retail meat unit by selling similar meats to its foodservice customers.
1 i) How much business risk does Hill Country face? Hill Country Snack Foods Company manufactures, markets, and distributes snack foods and frozen treats throughout the United States. Hill Country is overall well performed company. Sales, Net Income, ROE and ROA had increased at a steady rate. Company mainly focused on maximizing the shareholder value by the CEO and other management’s managerial philosophy.