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Mgt 599 Case Study

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Case Study, Module 4

TUI University

MGT 599

Strategic Management

EXECUTIVE SUMMARY The California Pizza Kitchen (CPK) is an established high-end pizza restaurant chain competing primarily in the United States although it does have some international locations. The company reported an estimated $664.7 million in revenue for 2009 and operates some 252 unique locations with more than 14 thousand employees (California, 2009). The Porter’s Five Force Analysis indicates that the degree of industry rivalry is extremely high making CPK’s generic strategy based on quality difficult to maintain in a down economy. Additionally, the sheer number of competitors in the industry and the pizza segment specifically affords buyers a lot of power in choice. The PEST analysis indicates that CPK’s industry is not very regulated although it is subject to some health inspections at the lower government levels and the economic segment of the PEST is its area of critical exposure. The recommendation is that CPK hasten its international expansion into markets such as China in order to diversify its markets and revenue streams.

CPK’S STRATEGY CPK is competing in a very crowded marketplace which is the restaurant industry an industry that is extremely competitive. There strategy is more focus within the company's market positioning, geographic locations, and distribution channels. It’s said when a company maintain profits over its rivalry the organization is operating competitive advantage. Competitive advantage allows CPK to ward off its competitors and stick around for a long period of time. CPK’s generic strategy is based on differentiation rather than cost leadership. This is apparent because CPK’s

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