Executive Summary
California Pizza Kitchen (CPK) is a chain of dining restaurants which offers a wide variety of foods. However, much of its focus is on its premium pizza sector. The company has a total of 248 restaurants. Under this chain several restaurants like California Pizza Kitchen, LA Food Show, and California Pizza Kitchen ASAP are found. Its operations are widely distributed in thirty states and also in 8 countries outside the US [California Pizza Kitchen (n.d.)]. This report is an in-depth analysis of the company’s operations, using the framework specified by the RBV model.
The model depends on the basic identification of a company’s potential resources and evaluates these resources to determine whether they fulfill the VRIN criteria. This criterion includes determining whether the resources are valuable, rare, in- imitable or non- substitutable (Crook, Ketchen, Combs & Todd, 2008). What are going to be of the main focus of this paper are the company’s economic value, its tangible and intangible resources, and some of its capabilities. After identifying these attributes of the company, the paper is then going to look at some of the weaknesses and strengths of the company based on the above aspects.
Introduction
California Pizza kitchen has been a famous and well known company for the past twenty five years, especially because of its Californian based innovated dishes. Its shareholding history and presence are things of admiration around the world [FundingUnivers (n.d.)]. The purpose of this paper therefore, is to analyze some of the internal strategies the company uses to keep itself afloat and successful for many years. In doing so, the paper will also address some of the economic values of the company, its resources, and capabilities and some of their weaknesses and strengths.
The restaurant chain faces little, if any, challenges especially because of its wide array of dishes, for various customers. Another aspect of the company that ensures its success is the fact that it is located in multiple areas, where the chains customers are many [California Pizza Kitchen (n.d.)]. As a result of all these characteristics, the company’s diversity is assured. In addition to the above attributes, the company’s professionalism and loyalty towards its customer base ensures its progression in the market.
California Pizza Kitchen Strengths
This restaurant chain has many advantages. One of them is its advantage in cost. The CPK is a premium restaurant, meaning that it has very high standards, which few can afford. This can be viewed as a weakness for the company because by being a premium brand, CPK is a niche brand which only identifies with people earning a satisfactory income, and those who like to indulge in natural, organic or healthy food [California Pizza Kitchen (n.d.)]. This however, is strength because the restaurant is located in areas where these kinds of customers are found in large numbers.
Getting customers to pay for these foods therefore, is not a problem. Another advantage is that the company offers to its customers a wide variety of unique products. The chain’s foods are organic, natural, and healthy, prepared in a very unique way that no other chain has managed to match. This in addition to the good quality of food the chains serves is an added strength. [California Pizza Kitchen (n.d.)]. It is also advantageous because it gives the restaurant chains, an upper hand in competition.
The innovative culture adopted by the restaurant chain is also another advantage [California Pizza Kitchen (n.d.)]. This innovation enables the restaurants to come up with new and unique products that can be sold at high values to the customers. Most of the chain restaurants branches are located at convenient locations. This is strength of the company as it gives it a better position to compete with rival chains that are not located in convenient locations.
Weaknesses
For every strength the business entity has, a similar and in most cases an equal limitation exists. It is therefore, the responsibility of the restaurant chain to identify these kinds of advantages and limitations for them to be able to mitigate these weaknesses while at the same time preserving their strengths. For example, for every convenience advantage a business has, a time and cost limitation occurs; for each customer service strength, an employee training weakness comes across, just as well as the way location as a strength brings about weaknesses regarding limitations in expansion. Pricing as strength also produces competition as a weakness (Matthews, 2006). One of the major limitations of this restaurant chain is the stiff competition it is facing.
Such strong competition results from other restaurant chains in the region like include other chain restaurants like Pizza Hut, Papa John’s and Domino’s [NetMBA. (n.d.)]. These rivals give CPK a lot of competition especially when it comes to unique menus and premium products.
Time and cost is for example a weakness at the company especially because of the lack of training most of the employees have. While the restaurant saves time and money from not training its employees, it also loses the same from the unprofessionalism exhibited by its workers, especially when customers decide not to return to the same restaurant. Another weakness emanating from this time/ cost factor is the fact that the restaurant chains relies heavily on personal service, something that its reputation is largely build upon. As a result of untrained workers, the company has lost its reputation, costing it money (Matthews, 2006).
Opportunities
A business can only be able to identify its opportunities only when it has identified its weaknesses. Some of these weaknesses are a characteristic of the industry and therefore, when properly played, can open up opportunities for the company grow and elevate itself to a better level through reducing, eliminating and neutralizing its weaknesses (Matthews, 2006). For example, for California Pizza Kitchen prepares pizzas only when they are ordered, and in the process of seeking to compete with other pizza companies may recognize one weakness of the industry that; the number of checks that come back for insufficient capital can be translated into the time delay the customers experience while he cashier is in the process of validating the information of the check. One opportunity that the company can exploit in mitigating such weakness is that they can start accepting credit and debit cards, and other forms of payment in the place of personal checks. Another opportunity would be to exploit the booming business presence of the internet to take orders and make payments.
This would help such a business to reduce liability while at the same time attracting customers through a previously underutilized market (Matthews, 2006).
Threats
A company as big as California Pizza Kitchen, cannot operate its business without facing numerous threats. For example, the significant increase in the costs of the raw materials of the restaurant chain as a result of worldwide increase in production costs and demand can be taken as an example of a threat (Matthews, 2006). Intense competition is also another threat the company is facing. Such stiff competition can push a company like California Pizza Kitchen out of business if its strategies are not sufficient enough (Collis & Montgomery, 1995).
Recommendations
Most of the threats and weaknesses the company is facing can be counteracted. For example the company can create a stronger brand name to increase its competitiveness among its rivals, it can improve its services, products and menu to rejuvenate its ruined reputation in addition to numerous advertising and marketing campaigns to clean up its reputation, and it can also integrate Scale into its operations like it s competitors. To counter competition, the company can also improve its menus, and premium products to match those of its rivals (Henry, 2007).
Conclusion
This paper reflected on some of the theoretical dimensions of an internal analysis of a company that are required in the study of its weaknesses, strengths, opportunities, and threats. The Research Based View was a very useful method in studying CPK’s performance through the study of its internal strategies.
References
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California Pizza Kitchen (n.d.). California Pizza Kitchen. Retrieved from http://www.cpk.com/.
FundingUnivers (n.d.). California Pizza Kitchen Inc. Retrieved from http://www.fundinguniverse.com/company-histories/California-Pizza-Kitchen-Inc-Company-History.html.
Henry, A. (2007). The Internal Environment: A Resource Based View of Strategy. Understanding Strategic Management. Oxford University Press. Retrieved from http://www.oup.com/uk/orc/bin/9780199288304/henry_ch05.pdf.
Matthews, E. (2006).SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats).
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