California Pizza Kitchen Essay

A comp boths strategic choices shape how that bulletproof will operate and react to the use of its own imagerys as intimately as the affects of external factors. These choices are typically broken down into matchless of our distinct strategies ( speak to leadership, preeminence, niche focus, and first doers service) and applied as focussing projects fit. In studying atomic number 20 Pizza Kitchen (CPK) literature, one crumb easily decipher that their main outline is differentiation with portions of first movers advantage tied in.CPK is actually open about the blast as menu innovation is one of their key encourages. Having identified this schema this paper visualizes to review this scheme against recently performed SWAT analysis to see how it is affecting CPKs strategic choices. It will discuss whether those strategic choices remain in line with its differentiation strategy. Additionally, this case study will even up whether the differentiation strategy and CPKs s trategic choices create competitive advantages or are they creating weakness that need to be addressed and countered with some of CPKs strengths.Finally, a brief discussion on CPKs mission and mess will be incorporated against the findings to determine what CPK is doing right and what they could possibly vary to improve is competitive position. Corporate Strategy Porter tells us that unwaveringlys position themselves by leveraging their strengths. He argued that strengths in the end fall into one of two headings address advantage and differentiation (Quickmba). CPK chooses and specifically points out differentiation as its main strategy.In its 2009 financial report, CPK states, We recollect that our belief, attractive charge- tax relationship and quality of fodder and service enable us to differentiate ourselves from our competitors. Differentiation is a competitive business strategy whereby firms flak to gain a competitive advantage by increasing the perceived value of th eir produces and/or work relative to the perceived value of separate firms products and services. Implementation of differentiation strategy inwardness that the value is put upd to nodes by dint of unique features and characteristics of the guilds products as op constitute to the last(a) price.A successful differentiation strategy will create client value that is perceived as such by its customers. Differentiated goods and services satisfy the needs of customers by means of a sustainable competitive advantage. CPK differentiates itself through product quality through the use of quality ingredients, menu number and innovation, and expanded services and offerings beyond their main dining experience. This all go under subcategory of differentiation known as Quality Strategy, which sets CPK apart(predicate) from its competitors.As a result of this quality, CPK has branded itself through a genuinely loyal customer base that consistently commercialises for the company throu gh gush reviews and word of mouth advertising. Firms that succeed in differentiation strategy oft film the following internal strengths (QuickMBA) Access to leading scientific interrogation Highly skilled and productive product victimisation team ironlike gross revenue team with the ability to successfully communicate the perceived strengths of the product Corporate reputation for quality and innovationDue to high levels of tilt in the food industry there is al offices an incentive to be groundbreaking and continuously improve. There is also al charges the chance that any differentiation could be copied by competitors. Therefore, innovation remains a bulky part of CPKs differentiation strategy as well as one of its core values. As proof of this, CPK literature is littered with the judgement of menu innovation, enlargement of service options such as the new items, littler express stores and growth/development in the frozen and fresh foods market in grocery stores.Thi s philosophy is not just talk however. CPK backs this concept with action through the continuous research and evaluation of various food ingredients, products and supplies for consistency and food safety. This research is compared to detailed specifications developed by CPKs products teams ultimately leading to high food quality standards. As mentioned in this authors previous studies, this research provides intellectual capital as well as contributes to the innovation capability as CPK remains at the forefront of and often dictates market changes (Haas1).This capability or competitive advantage is what also gives CPK some of its First Mover advantage. CPK operates as one of the pioneers of bountifulness pizza (a niche market). Therefore they were one of the first to develop the products creating benchmark and standards for the market. This provides them with the advantage of electric potential lower be (Golder & Teller) from intellectual capital and development experience as we ll as creates potential barriers for other competitors to beat products.It also gives them early recognition and consumer preference (QuickMBA) reducing the risk of the curse of ubstitution. This further increases the strategy of differentiation as well in that customers become attached to CPKs differentiating attributes. Additionally, because CPK focuses its main products on a niche market (premium pizza), it has been able to abide to sell its products at a much premium price and better absorb the economic upturn of inflation. strategical Choices The state of the economy, the downsizing of disposable income and the high unemployment have all posed large threats to the full service dining industry.The current economic purlieu has particularly played into CPKs strategic choices recently as they have had to compete to maintain revenue, reduce costs and keep customers who are more and more turning to substitutes such as fast food or home cooked meals in an attempt to save money. This has not deterred CPK completely from its differentiation strategy. In fact, Rick Rosenfield (CPK, Co- CEO) stated the company was working to reverse declining sales by offering a new menu (LATimes), again playing on their strength of innovation.However, it has pressure CPK to consider other approaches in the way that the attack the market and expand their business. This gives CPK an opportunity to address one of its major(ip) weaknesses at the same time. CPK has over 40% of its stores located in California. This has created a lack of geographical diversification. Therefore CPK is weighing to expand beyond California and has even looked to go outside the US as it believes its full-service restaurants will continue to represent the majority of revenue growth in the near term.This expansion plays into CPKs innovative approach to business. For the most part CPKs management has looked to expand revenues through new markets and menu options. However, the economic downturn has forc ed CPK to look internally to reduce cost as a means to maintain or increase revenue. Therefore, CPK has decide to not only look at foreign markets as a way to diversify its revenue stream but it will also leverage its brand invoke and reputation through is expanding in existing markets to consolidate marketing, human resource and supply chain costs.These choices are a good start, however CPKs sales have been down and the diversity of the market has not helped CPK to get hold its losses. Because CPK works with higher quality ingredients and unique menu items which change regularly there is less room for supply chain cost reduction. The innovative approach that makes CPK unique and differentiates it from its competitors could also potentially be preventing it from reducing costs and improving operational efficiencies. It acts almost as a Catch 22 if you will.Further, CPK run the potential pitfalls of risk listed below (Openlearningworld. com) Customers may decide cost of uniquenes s is too high Means of differentiation no long provides value to customers Customers learning may reduce customers intelligence of companys differentiation Counterfeit goods convey the same differentiation at a discounted price Ultimately this forces CPK to continue to increase value to customers by means of reducing prices, adding product features without raising prices or exploitation better efficiency in its value chain.Mission and Vision As described in previous research (Haas2), CPK does not formally severalize its mission and vision by these names, therefore some interpretation is compulsory for anyone looking for such designation. CPK intends to be the leader in authentic California-style culinary art and to be widely known for its innovative menu items. To achieve this, CPK intends to provide a range of creative dishes, from signature California-style hearth baked pizzas, creative salads, pastas, soups and sandwiches to extensive beer and wine lists with a full bar. In Part 1, power point 1, Business of the 2009 annual report readily identifies the companys objectives, as To extend our leadership position in the restaurant and premium pizza market by selling innovative, high quality pizzas in access to creative salads, distinctive pastas and related products and by providing exceptional customer service, thereby building a high degree of customer loyalty, brand consciousness and superior returns for our stockholders To reach these objectives, We (CPK) plan to increase our market share by expanding our restaurant base in new and existing markets, leveraging our partnerships in non-traditional and retail channels and offering innovative menu item. Reviewing these statements reaffirm that CPK has a solid mission and vision that incorporate its corporate strategy very well. Innovation and quality are the cornerstones of CPKs mission which are fundamental frequency factors in a strong differentiation strategy.However, CPK must be finagle not to become so focused on its current strategy that is forgets to measure pressures of external forces as well as the need for cost reduction that are weighing heavily in its business and profits. Without painstaking consideration of competitors, economic factors and internal stresses CPK may be forced to look elsewhere for funding which it has considered recently in its attempt to shop the company to new external buyers.It is suggested that CPK look carefully at its current strategy as compared to that of its competitors to see if it can better leverage its internal strengths and potential for operational efficiencies because price may be the ultimate downfall as many competitors are finding ways to incentivize customer value through lower prices, additional options or more product for the same price to maintain customer base. This could be a battle that CPK could fail at if it does not keep pace or find a way to show consumers its value.