Strategic Choices California Pizza Kitchen

Strategic Choices California Pizza Kitchen

California Pizza Kitchen

Low Cost

Differentiation

Pre-emptive

Strengths

Exceptional control over franchise operations costs (Fair Disclosure Wire, 2010)

R&D costs for new entrees exceptionally low given the differentiation

(Fair Disclosure Wire, 2010)

Cost-competitive menu without sacrificing quality

Unique and high value dining experience

High quality ingredients and quality of food

Differentiated brand supported by multiple sales channels

High value for the entrees, a continual update of the new dinners and salads

Accentuate and add value to the in-store dining experience

Aggressive expansion into lunch and brunch menus

Focus on value through R&D investment (Fair Disclosure Wire, 2010)

Weaknesses

Cost reduction on pizza has hurt the company reputation in thin crust market (Dasu, Chase, 2010)

Lack of controls on margin profitability during expansion periods

Most popular menu items stay on the menu too long; boredom with best-sellers

Lack of differentiation on salad and lite fare menu

Lack of focus on more international locations

Franchise operations lack focused growth path

Growth into grocery stores and malls is pervasive

Continued aggressive growth in countries most like the U.S.

Opportunities

Low-cost high value menu items to maximize the company's growth

Growth on cost of operations for small CPK outlets in malls and in tourism-driven traffic locations (Fair Disclosure Wire, 2010)

Potential for moving into brunch and also corporate catering to challenge Panera Bread

Differentiation on build-your-own Pizzas and mass customization

Greater focus on vegetarian and "green" or ecofriendly messaging

Focus on healthy eating and losing weight eating at CPK

Become the leader in flatbread-based foods that are healthy for consumers

Provide an audit of all foods and post it in the restaurant

Threats

Inviting a price ware and losing on their thin margins

Lack of differentiation when price becomes the only marketing variable of choice

Becoming too trending and losing the connection of the in-restaurant experience with the brand

Becoming to much like Panera or the other competitors who have moved into adjacent segments

Seen as potentially not real when talking about losing weight at a pizza place

Lack of authenticity

Authenticity and lack of consistency in execution could hard the company over time

Lack of execution in areas they company is not familiar with Analysis

California Pizza Kitchen (CPK) has an exceptionally strong series of processes for introducing new stores, and for supporting those stores with strong global branding (Fair Disclosure Wire, 2010). This approach to growing a retail business is extremely difficult to attain, as it requires the in-store experiences to support the brand and create value over time. In addition, the more mature of food retailing brand becomes the higher and more predetermined the expectations. For CPK the expectations of fast, friendly and professional service are very strong, as is the quality of the food itself. The need for creating a consistent experience is critical for their long-term growth as a result (Dasu, Chase, 2010).