Zoe's Kitchen Case Analysis

3641 words - 15 pages

Zoës Kitchen began in 1995 as a family-run restaurant in Homewood, Alabama. The company's owner, president & CEO, John Cassismus had turned his attention from his own business ventures to the family business, with desires to build a world-class company. Mostly frequented by mothers with small children and white-collar employees in the area, the restaurant catered to those consumers with a desire for healthy foods at comparatively lower prices. As of December 2005 there were 16 locations in five different states. The brand was strong and synonymous with freshness, home-style goodness and family recipes. The menu boasted healthy selections, mostly with a Greek influence, (i.e. chicken ...view middle of the document...

al., C-191). Growth in the industry meant increasing the number of locations or units. For Zoës Kitchen, the only means of achieving rapid location expansion would be large cash investments, without excessive debt. Unfortunately, excessive debt in the restaurant industry can be detrimental to profitability and ultimately success (Zheng, 135). Thus, this analysis will explain that there are two viable options for John Cassismus & Zoës Kitchen in order to achieve continue strategic growth; 1. Sell the company/allow for an acquisition, or 2. Franchise the company nationally and/or internationally. Additionally, Zoës Kitchen will need to increase market segment share. This will be most advantageously achieved by increasing dinner-time sales.Zoës Kitchen's StrategyAccording to the text, there are five generic competitive strategies; overall low-cost provider (i.e. Wal-Mart), broad differentiation (i.e. Charles Schwab), focused low-cost (i.e. Travelodge), focused differentiation (i.e. Gucci) and best-cost provider (i.e. Toyota for Lexus line) (Thompson et al, 134). Superficially, it appears that an organization may at any time employ a variety of these strategies, however "each involves distinctively different approaches to competing and operating the business" (Thompson et. al, 135). Zoës Kitchen was operating on a focused differentiation strategy; aiming at securing competitive advantage by appealing to the specific needs and desires of a well-defined market of consumers. A marketing survey completed for Zoës Kitchen showed that their loyal customer base placed the highest value on quality and service, not on price (Thompson et al., C-184). This survey confirmed that a 'low-cost' strategy was not necessarily a good choice for the company. The broad differentiation strategy would not allow the time or attention on such a well-defined niche that John Cassismus would have desired. The company is striving to capitalize on a very specific niche; time-starved, health conscious, affluent individuals. As such, it was clear that John Cassismus has built Zoës Kitchen into a well-positioned company, with an effective strategy well-matched to its market segment of the industry. The focused differentiation strategy largely depends on a buyer segment that seeks special product attributes (i.e. healthier food, lower comparative cost, quick service) and on the company's ability to stand apart from its rivals (Thompson et. al, 153). In its uniqueness, Zoës Kitchen has the ability to be different and had no national rivals emulating its format or menu.SWOT AnalysisStrengthsIt is clear that the major strength for Zoës Kitchen is its people. First, John Cassismus himself is an asset worth discussing. John built the company from a single, family run restaurant into the existing 16 location operation. Dear to his heart, John fostered the business which was inspired from the kitchen of his very own mother, Zoë. He was...

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