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Management: Identification of the Primary Business Strategy Employed By CPK (Essay Sample)
the same writer that wrote my mgt599 module 1 and 2 should do this module 3 case and slp 3 im going to order its a continuation. The case in this course is a "ongoing" case, which means that we will be taking an intense look at one company over the course of 5 modules. please make sure the slp is separate as well because its a diffrent home work. CASE The case in this course is a "ongoing" case, which means that we will be taking an intense look at one company over the course of 5 modules. This term, we will be conducting a strategic analysis of the California Pizza Kitchen. In order to be best prepared and perform well on the cases, it is highly recommended that you complete the background readings and the SLP before writing the case. For this case, you will be identifying the primary business strategy employed by CPK. You will also be providing a critical analysis evaluating that strategy in the light of the strengths, weaknesses, opportunities and threats you identified in Modules 2 and 3. Step One: Which of the four strategies discussed in this module (see background materials) does CPK follow? How do you know? Step Two: Using the process you learned in the SLP, integrate this strategy with the strengths, weaknesses, opportunities, and threats you identified in modules 2 and 3. This should give you some specific actions the company is taking relative to their strengths, weaknesses, opportunities and threats. These actions are referred to as "strategic choices". Do the strategic choices taken by CPK align with the firm's generic strategy? What are the points of disconnection? You need to think critically about this step. NO company achieves perfect alignment with its strengths, weaknesses, opportunites and threats, and its chosen strategy. It is your job to uncover the discrepancies and problems. Step Three: Identify any specific sustained competitive advantages conferred on CPK by virtue of its strategic choices. Step Three: In a 4 page paper, Discuss the effectiveness of CPK's' strategy in the light of its internal strengths and weaknesses, and external threats and opportunities. Has it created any sustained competitive advantages? Identify any unaddressed threats or missed opportunities. What can CPK do to build on its strengths and shore up its weaknesses by altering its strategic choices? Finish the paper by commenting on how your view of CPK's vision and mission has changed or been reconfirmed by this process of strategic analysis. Would you make any suggestions to revise the strategy, mission or vision? Case Expectations: As was the requirement with the previous cases, consider this paper a formal report and follow the conventions outlined in the previous modules. Support your analysis with facts and data from your research in previous modules, and suppliment with additional research if you find gaps. Be sure to properly cite sources in the text and provide a complete reference list - or footnotes. SLP 2 pages Note: Throughout this course, you should complete the SLP before you undertake the case analysis. Before you begin the SLP, you need to read the background materials thoroughly. In this SLP, you will be learning how to apply and integrate the results of your SWOT variables (discussed in Modules 2 & 3) to the four generic business strategies discussed in this module. As has been the case in the past 3 modules, we will take you through the process step-by-step: Step 1: Create a 5x5 table with the four strategies listed across the top and the four SWOT variables along the side as follows: Low cost Differentiation Focus Pre-emptive Strengths Weaknesses Opportunity Threat Step 2: From your work in modules 2 and three, select one element from any of the analytical models we studied that contributes to each of the four SWOT variables. For example, for Weaknesses, you may want to choose an element from Porter's Value Chain (say operations) and for opportunities, you may want to select something from the PEST analysis (say, sociocultural factors). Select one also for Strengths and Threats. Step 3: Enter the elements you have chosen with the corresponding SWOT variable. Below, I have shown how I have selected "Strong Competitive Rivalry" for Threats. Note that I could have also chosen high barriers to entry, high bargaining power of suppliers or customers, high substitutability (From 5-Forces analysis), or a specific political, economic, social or technological factor (from PEST)as well. Low cost Differentiation Focus Pre-emptive Strengths Weaknesses Opportunity Threat: Strong competitive rivalry Complete this process for all four SWOT variables. Step 4: This is the hard part. Indicate what impact each strategy could have on each SWOT factor you have chosen by offering a business action that will address the SWOT. I've chosen one threat: Strong competitive rivalry. Follow that factor across all four generic strategies. How would a low-cost strategy address an industry environment characterized by intense rivalry? What about a differentiation strategy? Focus? Pre-emptive? In other words, you are considering the same industry threat - but addressing it entirely differently depending on the chosen strategy. See the example below. Low cost Differentiation Focus Pre-emptive Strengths Weaknesses Opportunity Threat: Strong competitive rivalry Undercut rivals on price through operational economies Brand loyalty attracts repeat customers Find an underserved market segment that rivals are unwilling to serve Beat the rivals out of the gate, establish dominant position Thus, the strategic action you choose to fill in a given blank should do two things: 1) offer a tactic for taking advantage of a strength or opportunity or guarding against a threat or weakness, and 2) follow the basic thrust of the strategy in that column. SLP Expectation: There is no right or wrong answer to this, provided that your analysis is internally logical. That is, the factors your chose must align with the appropriate SWOT variable, and the business actions you choose to fill in the matrix must align with the proper strategy. Take care to prepare a professional presentation of your table. It should fit on one page and be readable. You will probably have more luck with a landscape layout than portrait layout. (In Word, click "File", then "Page Set-up") Submit you completed table on coursenet by the module due date. TIPS If you are having trouble seeing how to integrate the SWOT factors with different strategies, the following readings may help get you started: This article has some examples of how RBV variables can be used to leverage a cost or differentiation strategy. It may be helpful. n.a Competitive Advantage (2007). Retrieved from: http://www.quickmba.com/strategy/competitive-advantage/ This reading demonstrates how a cost, differentiation, or focus strategy can defend against Porter's 5-forces. n.a. (2007). Porter's Generic Strategies. Retrieved from http://www.quickmba.com/strategy/generic.shtml Module 4 - Background In this module, we focus on strategic alternatives at the corporate, business, and functional levels. Companies follow strategies at each pf these levels, as well as at the global level. At the functional level, strategies are short-term in nature, and refer to functions of a company such as marketing, manufacturing, materials management, customer service, R&D. The business level refers to strategies that are of medium range. They include the company's market positioning, geographic locations, and distribution channels. At the corporate level, strategies are long-term, and include such options as horizontal and vertical integration, diversification, strategic alliances, mergers, and acquisitions. Please click here for a Presentation on Strategic Choices by Professor Anastasia Luca. Competitive Advantage For this module, we will focus on the strategic options available for companies at the level of business strategy. Companies select business strategies to obtain sustained competitive advantage (SCA) against competitors. SCA's are advantages that can not be easily copied or imitated by competitors. A few years ago, strategist talked in terms of Porter's generic strategies (basically cost and differentiation). Today, we have four distinct strategies we use to analyze strategic options, although there are various approaches to achieving these strategies employed by different firms. cost leadership differentiation niche focus pre-emptive move (or first-mover advantage) Cost leadership Most people think of economies of scale when they think of low cost strategies. McDonalds and Wal-Mart not withstanding, high volume is not the only way to achieve low prices. Here are some other approaches to implementing a low cost strategy: No frills. Southwest Airlines eschewed big airports and cut costs by flying in to smaller fields. Competitors such as Delta and American were too heavily invested in the hub business model to change. Product design. Masonite developed an alternative to expensive wood products by using sawdust and woodchips. Some telecommunications companies "bundle" products offering cable/satellite TV, high speed internet and telephone service for one low price. Hershey's shrank the chocolate bar to keep from raising their low price. Operational economies. Firms can save money by eliminating high costs in the value chain. Amazon was able to significantly cut costs by eliminating physical stores, inventories, and cutting the 30% return rate of bookstores to just 3%. Experience. Costs decline at a predictable rate with a firms accumulated experience. Such declines are attributed to the learning curve, technological improvements, and product redesign resulting in product and process efficiencies. Economies of Scale. With higher sales, fixed costs such as R&D, overhead, advertising, even legal support, can be spread over a larger revenue base. Here is another way of looking at low-cost strategies: Algasae (n.d.) Promoting thought leadership...Customer focused low-cost strategy. Retrieved from http://www.alagse.com/strategy/s10.php Differentiation Strategies If a company positions itself as offering a product or service that is different from its competitors in a way that customers value, it is following a differentiation strategy. A successful differentiation strategy will create customer value that is PERCEIVED as such by the customer. Many so-called "new-and-improved" products have fallen flat because the customer simply didn't care! In addition, a successful differentiation strategy will only build a sustained competitive advantage to the degree that it is difficult to copy. There are many ways to add value to any aspect of a business through differentiation: Ingredients/components: Healthier, "greener", more lasting ingredients/materials. (Maytag, Healthy Choice frozen dinners) Product offering: Better designed products (Blackberry touch screen, Dell 'ultra thin" notebooks) Combining products: Two is better than 1! (Colgate 2 in 1 toothpaste with mouthwash) Added services: Extra services beyond the basic purpose of the product or service (Concierge service with American Express Cards) Breadth of Product Line: Extra convenience in dealing with fewer vendors. (Wal-Mart super stores offer one stop shopping, eliminating the need to go to multiple stores.) Channel: Offering items or services through a medium or channel unavailable in that form anywhere else. (E-bay offers instant access to hundreds of individuals located worldwide simultaneously - asynchronously.) Design: Product or service is unique, (Bed-and-breakfasts offer a ''homey" alternative to standardized hotel rooms). In general, there are two ways to build SCA through differentiation strategies. Most of the methods of adding value mentioned above can be related to either quality or brand recognition. Quality Strategy. In this type of differentiation, a company tries to set it's product/service appart on the basis of superior quality It is probably the most widely used method of attaining sustained competitive advantage. Usually, quality means superior performance, and a primium brand as opposed to discount or economy brands. These top of the line offerings command a high price tag. However, quality does not always mean pricey. Both Mercedes and VW connote high quality German engineering. Branding. Brands build SCA through customer familiarity, loyalty, and trust. Aspirin is aspirin, but Bayer continues to trive against low-priced generics due to the power of the brand. Blue Ocean: An Alternative Approach A combination of low cost and differentiation strategies has created a buzz in the recent business press. Known as "Blue Ocean" strategy, it is an interesting new idea that challenges the standard classifications of strategy. The following is the official Blue Ocean website, Be sure to check out some of the links to view the tools and frameworks for Blue Ocean strategic planning: Kim, W.C. and Mauborgne, R. (2009), What is BOS? Nine key points of Blue Ocean Strategy. Retrieved from http://www.blueoceanstrategy.com/abo/what_is_bos.html Niche Focus Strategies Niche or Focus strategies are really variations of a cost or differentiation (or both!) strategy, only concentrating the company's efforts on a single or limited product or market. By focusing its efforts, the firm is able to realize the following advantages: Avoid distraction or dilution: All the firms efforts are directed toward a single end and competitive pressures are diminished. All company resources and capabilities are matched to the market needs - creating a SCA (remember RBV?) Maximize limited resources: When resources are tight, they will go father and create a greater impact when the target is limited. Circumvent competitors resources and capabilities: By operating in a niche market, say, private-label manufacturing, a firm does not have to contend with the big advertising and distribution capacities of the brand names. Competitive pressure are dimished overall as there are likely to be fewer competitors. Establish a unique identity: Offering a narrow product line, or operating in a limited geographic area can confer a certain cachet. In-and-Out Burgers, for example competes successfully with the huge fast food franchises by refusing to offer anything but hamburgers, made with the freshest site-prepared ingredients, in California, Nevada and Arizona only. There are basically three ways a firm can establish a focus strategy. It can concentrate on one of these approaches, or a combination. Focusing the product line. Firms that focus their product line often do so because they possess some expertise and special interest that often translates into technical superiority. These products excite and electrify. Take Bose Corporation, for example. It manufactures a very small line of exceedingly high quality audio products that are based on astonishing technology. If Bose broadened its offerings to all kinds of consumer electronics, it would run the risk of sliding into mediocrity with ho-hum products. Targeting market segments. This is essentially "snob-appeal", broadly defined. Gucci handbags target high-end fashionistas, Harley Davidson targets rebellious non-conformists (at least in their own minds!), and Castrol motor oil, which is not even sold in service stations, targets independent male do-it-yourselfers. Limited geographic area. We have already considered In and Out Burger, but many other products are conferred a kind of cachet because you can't get them just anywhere. Other examples include small breweries (Shiner in Texas), coffee shops (independent and locally owned), or bakeries (Tim Horton donuts in Canada and the NE United States) For another take on Niche strategies, including some important caveats and warnings about potential pitfalls, read: Iansiti, M. and Levien, R. (2004). Strategy for small fish. Harvard Business School Working Knowledge. Retrieved from http://hbswk.hbs.edu/item/4331.html Pre-emptive Strategy By being the first entrant into a new market or business area, a firm can establish competencies or assets that competitors are not able to copy or develop on their own. The first-mover advantage can create high switching costs for customers, erect high barriers to entrance for competitors, and tie up contracts with suppliers. Thus, a pre-emptive strategy can confer SCA's from both internal and external sources. Pre-emptive startegies usually are implemented in one of three ways: Product opportunities. The first product offered in a new market can generate advantages in terms of dominant position that can be hard for competitors to later dislodge or overcome. They can establish the "standard" for an industry, such as Intel did with microprocessors and Microsoft with operating systems. Of course, firms must continue investment in improvements lest an upstart come up with a "better mousetrap". Production systems. When a firm invents a better or more efficient production system that expands capacity, reduces cost and/or improves quality, they have created an SCA. Customer advantages. First movers have an advantage with customers - creating brand loyalty and increasing switching costs. Customers become used to a familiar product or brand and see no reason to switch. Some companies get customers to make ling term commitments - as in long contracts for the latest in i phone or blackberry technology. Banks may vie to get first mover advantage in online banking because such systems involve substantial switching costs for customers who pay all their bills online. Here is a brief, but good article discussing the first mover advantage in practice: LIANG, T., CZAPLEWSKI, A., KLEIN, G., & JIANG, J. (2009). Leveraging First-Mover Advantages in Internet-based Consumer Services. Communications of the ACM, 52(6), 146-148. Retrieved from Business Source Complete database. http://wf2dnvr16.webfeat.org/Aj3OO12691/url=http://web.ebscohost.com/ehost/detail?vid=1&hid=7&sid=23a5455c-bc79-49b8-a925-27076398db19%40sessionmgr4&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=40217630 Required Readings Algasae (n.d.) Promoting thought leadership...Customer focused low-cost strategy. Retrieved from http://www.alagse.com/strategy/s10.php Kim, W.C. and Mauborgne, R. (2009), What is BOS? Nine key points of Blue Ocean Strategy. Retrieved from http://www.blueoceanstrategy.com/abo/what_is_bos.html LIANG, T., CZAPLEWSKI, A., KLEIN, G., & JIANG, J. (2009). Leveraging First-Mover Advantages in Internet-based Consumer Services. Communications of the ACM, 52(6), 146-148. Retrieved from Business Source Complete database. http://wf2dnvr16.webfeat.org/Aj3OO12691/url=http://web.ebscohost.com/ehost/detail?vid=1&hid=7&sid=23a5455c-bc79-49b8-a925-27076398db19%40sessionmgr4&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=40217630I ansiti, M. and Levien, R. (2004). Strategy for small fish, Harvard Business School Working Knowledge. Retrieved from http://hbswk.hbs.edu/item/4331.html SLP Readings (Optional) n.a Competitive Advantage (2007). Retrieved from: http://www.quickmba.com/strategy/competitive-advantage/ n.a. (2007). Porter's Generic Strategies. Retrieved from http://www.quickmba.com/strategy/generic.shtml source..
MANAGEMENT: IDENTIFICATION OF THE PRIMARY BUSINESS STRATEGY
EMPLOYED BY CPK
(28 May 2011)
Management: Identification of the Primary Business Strategy Employed By CPK
California Pizza Kitchen is a company that specializes in casual dining restaurant chain. In the food industry, California Pizza Kitchen is commonly known as CPK. CPK Inc. is the owners of full-service restaurant chains. The chain offers traditional pizzas and various kinds of pastas and sandwiches. Examples include strawberry shortcake, roasted vegetable salad, Korean BBQ steak Tacos, spicy chicken Tinga Quesadilla, Four-season pizza and many more. In California, the company has 26 CPK outlets. California Pizza Kitchen has outlets in over 260 locations in 30 states in America (Flax & Rosenfield 2004). CPK has it`s headquarter at Los Angeles in California. The company employs approximately 14,500 people.
California Pizza Kitchen is a successful fast growing restaurant. Larry Flax and Rick Rosenfield who were natives of Los Angeles founded the company. Initially the company struggled like any new establishment. In 1989, California Pizza Kitchen received its big break. The break was a result of the agreement between the chairperson of Mirage Hotel and Casinos and CPK`s two founders. The agreement was that CPK would develop its food outlets in the Mirage Hotel and Casinos. In the first year after the agreement, CPK sales were more than $5 million. The arrangement was so successful and it gave CPK a lot of exposure.
California Pizza Kitchen is among the US based private companies, having annual turn over of about $ 4.6 million. In 2009, the CPK recorded revenues of $ 665 million. This was a slight decrease compared to the previous year. In the same year, the company`s operating profit was $3.3 million. The operating profit had also decreased significantly compared to the previous year. it had recorded a decrease of 74 % compared to 2008. The net profit had also decreased compared to the year 2008 by 47% (Joe, 2010). The company has currently grown into a major food service provider in the world. The company currently includes about 260 businesses that are located in 30 states in the US. Its name has been much recognized in the US, for instance, according to 1996 study, about 96% of US consumers were aware of the company; even some were able to name the company`s CEO (Algasae, 2011). It was proved that, the name California Pizza Kitchen was majorly associated with terms like delicious, quality, and successful. Because of this wonderful success of California Pizza Kitchen, this Dissertation looks at the management strategy of the Company.
Development of the groups` strategy
California Pizza Kitchen applies various strategies to ensure that the company is successful. The company adopts innovation style of management in each of its many outlets (Albright, 2004). Individual business units share common stra...
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