California Pizza Kitchen Essay Example

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Effective expansion relies on a variety of factors such as employing, instructing and maintaining a skilled workforce, particularly managers; contending for desirable restaurant locations; negotiating favorable lease conditions; punctually constructing new restaurants, while ensuring the availability of building materials and labor; managing the costs associated with new restaurant development and construction; acquiring the necessary governmental licenses and authorizations; facing competition in our markets; and dealing with overall economic circumstances.

S. W. O. T. ANALYSIS

• Strengths
• California Pizza Kitchen, Inc. is a recognizable brand name.
• California Pizza Kitchen, Inc.
• has a strong balance sheet and a steady reduction in long term debt.
• There are a variety of different products and ways in which the CPK brand is being marketed.
• California Pizza Kitchen, Inc has been able to remain competitive in Weaknesses
• California Pizza Kitchen, Inc has a lack of geographic diversification; currently 40% of company operated stores are located within California.
• As a result, CPK is particularly susceptible to adverse trends and economic conditions in California.

Opportunities

• Franchised Restaurants and frozen pizzas (such as California Pizza Kitchen, Inc) ave the possibility of improving overall margins in the long run.
• Management has hinted there is a chance of marketing products other than Just frozen pizzas through Kraft.
• California Pizza Kitchen, Inc. will be introducing quick serve restaurants, and catering services in addition to their traditional restaurants. New target markets such as college campuses can be accessed.

Threats

• Restaurant sales are

susceptible to timing of weather, holidays and other special events

Forces Analysis

Supplier Power

• There is a low amount of supplier power.
• The industry has a large assortment of places to obtain the different ingredients used in making food. Barriers to Entry
• There are very low barriers to entry within the industry.
• A large number of people can afford to lease buildings and equipment, so preliminary capital start up costs is very low.

Buyer Power

The industry is characterized by a strong buyer power.

Degree of Rivalry

The industry faces intense competition as numerous restaurants strive to capture the same customer base. There are tens of thousands of players in this field vying for market share.

P.E. S. T Analysis

The political factors involve the government's involvement in economic affairs, such as its tax policy, labor law, environmental law, trade restrictions, tariffs and political stability. Meanwhile, legal factors encompass laws against discrimination and for consumer protection, antitrust and employment laws as well as health and safety regulations.

The operations, costs, and product demand of a company can be affected by these factors.

The laws encompass stipulations regarding the bare minimum wage, qualifications criteria, and sales taxes.

Economics encompasses various aspects such as inflation rate, exchange rates, interest rates and economic growth.

The Company may experience a decrease in demand for its products due to several economic factors such as recessionary cycles, higher

interest rates, increased energy and commodity prices, inflation, higher levels of unemployment, consumer debt, tax changes, and shifts in buying patterns. In addition to this, recent financial market turbulence has affected consumer spending behavior. Moreover, the Company's margins could be negatively impacted by fluctuations in food and supply costs.

One aspect of profitability involves being able to foresee and respond to fluctuations in food and supply expenses. These costs are subject to various external variables which may be outside of the company's influence, such as unfavorable weather conditions and regulatory measures imposed by governmental bodies.

Social factors, which comprise health consciousness, population growth rate, age distribution, career attitudes, and emphasis on safety, are cultural aspects that impact the demand for business products and influence company operations. This encompasses recruitment and retention as well as customer satisfaction. CPK looks for seasoned managers and employees.

The employees of the company are offered different kinds of compensation and benefits like a 401(k) scheme and wage deferral program. Medical insurance is provided to all staff members, irrespective of their work hours. Additionally, dining discounts are available for everyone employed at the company.

Restaurants located in California are susceptible to significant impacts on their business and operations due to adverse publicity, strikes, earthquakes, and other natural disasters resulting from their concentrated geographic location.

Moreover, technological advancements can impact expenses, quality, and spur innovative ideas. The CPK dining establishments all implement technological information systems aimed at elevating operational efficiencies, granting swift entry to financial and marketing information for both field and corporate management, reducing administrative time and costs for both restaurants and corporations, guaranteeing conformity with regional and federal

laws, and promoting a pleasant customer experience by empowering patrons to tailor menu items, cooking methods and payment alternatives to their preference.