The Cheesecake Factory Inc. is a large company that is chiefly based in Atlanta and majors its business operations in the hospitality industry. The company is engaged in the in the running of bakeries, bar services and restaurants under the Cheesecake Factory name. The organization has over 200 items in their menu such as appetizers, sandwiches, seafood, salads, desserts, omelets, steaks, chicken, pizza, burgers and pasta. Moreover, the Cheesecake annual report (2009) highlights that the company offers on average, about 40 varieties of cheesecake and other baked desserts. The company has grown consistently since inception to its present excellent status.The company was founded by Overton family where it began with the making of special kind of cheesecake. The family from then onwards invested in research and developed the cheesecake business and it was in 1978 that David M. Overton, the company's founder, opened up the first Cheesecake Factory restaurant in Beverly Hills, California (Davey, 2009). After opening their first factory in Beverly Hills, Overton managed the sales of the cheese whereas his wife concentrated on productions quality cake to serve the growing demand. Later on, Overton's son joined the business and managed to establish the first restaurant that offered state of the art hospitality services with the support accrued from the cheesecake business (Cheesecake, 2009). The family furthered their operations to form the Cheesecake Factory that was now made of cake shops, restaurants and bars which is estimated to be having over 150 outlets in the Atlanta. This tremendous growth has not only surpassed the expectations that several stakeholders of the company had but is also further success to its owners.The business owners are committed to the performance of the group business through the successful utilization of its business and financial models that are proven to produce results while at the same tome focus on realistic company objectives. The company is engaged in constant improvement of all its services and products through innovation and adapting to the changing business environmental situations. The corporate governance of the business is enforced by the board of directors who apply the best ethical practices in business (Cheesecake, 2009).Situation Analysis
The Cheesecake Factory Inc. has several resources that it utilizes in its business processes. At the moment the company constantly needs several resources to further its business agenda which include adoption of more human resources, raw materials and capital improvement Ireland, Hoskisson & Hitt (2005) point out that, although these resources are provided in the company, they can only be used for the normal business processes and thus calls for their increase. Other service rental facilities are not sufficient for the company in order to meets its daily operations. Furthermore, failure of landlords to expand the premises used by the company is currently limiting the expansion opportunities for the company.The company's outlets are located at strategic locations which has ensured that the staff are easily accessible and thus the availability services to the people has been improved whenever a need arise. Ireland, Hoskisson & Hitt (2005) assert that the company's policy is to carry out innovations that will ensure that those services and facilities that are actually needed by the people are made affordable to them to its clients. Presently, services of Cheesecake Factory have positively impacted the customers who have come to develop loyalty to the brand. Moreover, the existing demographic, social, economic, political, and cultural conditions of Atlanta are friendly for the company's business and have not interfered with the normal business processes and thus the company is at an excellent business situation (Pride, 2006).The Cheesecake Factory has developed strengths over time which enabled it to compete effectively in the hospitality industry. The company has in the past developed new product line by the use of high standards of innovation, development and creativity (Mardirossian, 2003). This has therefore enabled the company to keep in touch with the latest customer requirements and special needs through menu change which is done twice in every year. The company has produced a number of new products while at the same time modifying the existing ones to fit customer value and affordability. The innovation has been the driving factor of the company which is extended to its innovative decorations and designs in which they enhance customer satisfaction and value for their money (Cheesecake, 2009; George, 2009).In addition, the company's restaurants are of high quality and located in high profile areas that have great potentials. Wrobel (2008) points out that business location should be chosen with company's objective in mind. The company has therefore selected its business location carefully before an outlet is opened so as to ensure that the location meets its quality requirements as well as attract more customers. The high quality status developed and maintained by the company has earned the company a great corporate brand name which is well known in America. The locations within highly densely populated areas with businesses, entertainment outlets and shopping malls enable it to attract high caliber customers who value the high profile restaurant thus giving strength to the company (Cheesecake, 2009).Additionally, the company has diversified extensively in its businesses operations by running bakeries, restaurants and bars so as to ensure that the company makes profit from the diversified business. The diversification of the company's operations minimizes the risk exposed to each line of business. The company also offers variety of diverse products in its menu which are in excess of 200 but also takes into consideration the special requirements of vegetarians (Cheesecake, 2009). This fact gives a huge strength to the company's business operations as the company is in a position to attract customers of diversified food requirements and meet all their demands. This is not the case with other are only offering selective products to customers.The company prides in a strong financial position. Calif (2009) highlights that the company has consistently maintained high level of revenues up to $1.6 billion. The company is also cautious on spending and thus has been able to keep its operation costs low. It is on record that it makes the highest profit in the Atlanta and has been used by other companies to benchmark their operations such as Zara Restaurant and Lounge (Berry, 2010). Strong financial position has left the company with sound finances to diversify its business projects as well as open other outlets. The sound financial policies implemented by the company have given it the muscle and competitive advantage over its competitors.
The company has a strong workforce of committed employees who carry the objectives of the business at their core duties. The company has been able to surpass its targets and set goals courtesy of dedicated staff of over 30,000 employees. According to the 2009 Annual Report (2009), the company chief executive officer underscores that the success so far achieved is due to the employee commitment to excellence. The report quotes the executive officer noting that the most important ingredient in the Cheesecake recipe for success is in its people. This fact emphasizes the strength that the company has through its employees who are committed to excellence at all times (Miller, 2008).The company is faced with a number of weaknesses that exists in the company's framework. To begin with, the company is challenged to retain its team of highly committed and dedicated employees. There is a tendency that if an employee feels uncomfortable at Cheesecake Factory, they may leave to join a competitor. Thus it calls for the company to put in measures that are attractive to the employees in addition to offering competitive compensation packages and good working schedules. Therefore as long as the company continues in its operations, it if faced by this weakness which requires the human resource department of the company to continuously implement policies for employee satisfaction as well as carrying out internal surveys.The other weakness for the company is its failure to meet its marketing strategies yet it has spent a lot of money. There is a weakness associated with the fact that the marketing team can carry out aggressive marketing campaigns and end up with negative impact and thus causing the company to lose thousands of dollars (Cheesecake, 2009). This weakness can be addressed by conducting a thorough market research prior to any marketing campaign to establish its benefits and the impact at hand. Although some may fail the research test, there are those that the company will be able to adapt and obtain favorable results.Also, another weakness arises from the fact that new restaurants developed by the company affect other existing businesses. This is because their expansion strategy concentrates only on local expansion and do not expand internationally. Therefore, in situations where the company develops a business where it is near an existing outlet, there will be a shift of customers shifting from the old restaurant to the new development (Cheesecake, 2009). Thus the resulting effect is that its own developments negatively affect the existing outlets which are within the location. This problem could have been alleviated by global expansion of the company though the company is categorical through its website it has no plans to expand internationally.Moreover, the company has a weakness in that it does not offer any franchise or joint venture opportunities. This means that the company cannot access the benefits of operating a successful franchise which may be the best tool for marketing and brand development internationally. However, according to the management as it appears on its website, it does not plan to offer such services any time soon (Cheesecake, 2009). Thus the company is not in a position to gain new ideas from owning a franchise nor benefit by tapping into huge markets enjoyed by existing franchises.Furthermore, there is a weakness in the company's ability to follow through a single product development and fully develop it greater heights. For instances, the business has terminated their wedding cake making services (Cheesecake, 2009). It is however not exactly clear why the service was terminated but this is bound to impact negatively on the customers who earlier relied on the company as the primary source of their wedding cakes. This gesture may be to the interest of the company but the consumer's perception on the issue cannot be ignored since the customer is the king for any business. This weakness of product termination should be addressed by the company so that incase a product is not performing well it is better to be outsourced and maintain the customer satisfaction.The company has the opportunity of growth through its local network development of new outlets. The company has enough resources to enable it utilize the available opportunity by conducting excellent research on the market. The company is known for not just developing any outlet but rather selection of the location is very important. The company has to invest in areas which are densely populated with people capable of buying its products. Therefore the opportunity lies on areas with shopping malls, schools, offices as well as entertainment outlets (Cheesecake, 2009).Opportunity exists for the company to support local community programs (Cheesecake, 2009). These will include partnering with other stakeholders to improve the standards of living for its immediate customers. The company involvement in food distribution to the needy is also a good gesture that will truly enhance its image. These corporate social responsibilities will result in a long term customer loyalty due to the fact that people would like to be associated with such companies that are always concerned with their wellbeing. This will present the company the opportunity to penetrate more into its market and stamping its dominance in the region.Moreover, the company has an opportunity to invest in the latest technologies to improve its network and management policies (Icon, 2008). The use of technology will enable the business reach more of its customer needs due to the availability of databases that contain information of each and every customer. The technology makes work to be efficient and assists the management by using appropriate tools to make decisions of the company. An example of management benefit from technology is the use of software technologies that allocates specific tasks to be implemented in a project management at a particular time and in a given sequence. These technological improvements increase innovation of the company thus making it more competitive.In addition, the company has opportunity to improve its sales by fully utilizing online selling of its products which are subsequently delivered to the homes, offices or events though the use of e-commerce (Cheesecake, 2009). This increases the customer base of the company since the internet is a media reached by many. However, this service is locally limited but future opportunities may arise if the company decides to go international. In line with customer base expansion, the opportunity is open for the company to increase hosting of events due to available expansion spaces. By this, the company will attract more individuals, corporate groups, families and other informal groups adding to its customer base thus enhancing growth.
The company has more opportunities in restaurant operations and management. The ability to consistently and properly execute a development from scratch to a complex menu in an upscale is a critical opportunity that the company enjoys. The purchasing department will also utilize great opportunity by sourcing reliable raw materials at competitive prices (Cheesecake, 2009). This means that the company should be in a position to utilize expansion opportunity for its suppliers so as to ensure it obtains the best quality products at negotiated prices. This opportunity of sound operations management saves the company a lot of dollars and ultimately contributing to its overall success.The threat of competition in the hospitality industry is always high. This means that the company will continuously have to formulate schemes and goals which will maintain its competitive advantage. The competition comes from both local and international franchises in the food industry. The competition, if unchecked, could drive out Cheesecake Factory business and overthrow it in terms of market share. However, the management is continuously engaged in market strategies and adapting new opportunities which helps it to alleviate the effects of competition (Bill &Lynn, 2006).Moreover, the online systems are threatening the business through fraudulent claims over the internet. The fraudsters posing as genuine Cheesecake Factory, offer prizes through the internet and rob customers of their money (Cheesecake, 2009). There have been reported cases that have necessitated the company to warn the general public through its website. This act is a threat to the good business name delighted by the company; it could be tarnished if its customers lost confidence in the integrity of the business. This security concern extends to the threat that is posed by hackers into its operation systems. Thus the company has been investing in anti-fraud software that reduces the threat posed on its security systems.Another threat that is facing Cheesecake Factory is the economic recession. This has impacted negatively on the company's financial performance for the recent period and there is a continual threat for unfavorable economic conditions. The company has to invest in strategies to salvage its performance at hard economic times. This is because the company's success relies on the employment rate of the general population. Thus at hard economic times where there is high unemployment, the company will not have high customer numbers and as a result there will be reduced revenues. Some measures to counter the recession are adjusting the menu quantities to serve small at a lower and affordable prices. The Cheesecake Factory employed this strategy and was able to survive the recession thus maintaining its sales revenue of $1.6 billion in 2009. Thus recession remains to be a huge threat to the operations of the company currently and in the future (Cheesecake, 2009).There has been a general increase in the cost of operating business which has a potential threat to the company performance. With increase in costs, it means that for the company to maintain its profit margin it must create ways to counterbalance. However, the company has been able to contract supply of basic requirements which are needed throughout the year but there are those which are impossible to be contracted, hence vulnerable to the market changes. These key items that may be difficult to contract include those perishable goods that may not be kept for periods longer than 30 days (Cheesecake, 2009). Therefore, there is a threat of increased costs of operation which has a negative effect on the operations and business success of Cheesecake Factory Inc.The other threat to the company is any litigation that could be materially adverse on the business. This is because the company is subject to lawsuits, administrative proceedings and any claims that come up in the course of business. They may include claims regarding issues such as food borne illness, work-related injuries and so on. The company could have a negative publicity and the litigation costs could be very high making it a threat to the company (Cheesecake, 2009). Moreover, the issues with new legislation can also contribute to the threats from the point that the company will not be able to implement new policies. Thus the company is faced by legislation threats which could interfere with its business performances.The last threat that this paper puts across is the lack of financial credit for expansion by Cheesecake Factory landlords. This means that the contracts entered by the company with the landlords for future expansion will fail and as a result threatens the successful implementation of the company expansion strategies (Cheesecake, 2009). The inability of the financial institutions to finance these partners in building projects has the effect on the company business and it would be wise for the company to have several expansion alternatives. This would limit the chances of the company failing in its plan out of external factors which are not favorable.Major Stakeholders
There are four major stakeholders of the Cheesecake Factory Inc. who include stockholders, employees, suppliers as well as customers. These groups of stakeholders have varied interest in the performance of the company that as this paper will analyze in detail for each group. Stakeholders of any business have different interests and duties which when all of them are met each stakeholder will be satisfied.These are the owners of the company who have invested their resources in the company expecting returns in terms of earnings per share. They do not necessarily run the affairs of the company but some of them may be actively involved like David Overton who doubles as Chief Executive Officer. The stockholders are interested in maximum returns for their investment and are against huge expenses incurred by the business which are not important. Moreover, they are called upon to decide on major decisions like adoption of financial reports, appointment of board of directors, appointment of auditors, major investment decisions as well as any matters that deserve their attention. The conflict of interest may arise with the stockholders and employees in the matters of expenditure and are harmonized accordingly through viable means of discussions.These are stakeholders who are involved in the day to day operation activities of the company. Their interest is to have a successful business which is in a position to meet their benefits in terms of compensation packages for the services offered. The group may include some of the stockholders, but at this group their interest is to offer service and get remunerated. An example is the founder of Cheesecake Factory who is the Chief Executive employee. The employees implement their duties with the interest of stockholders. The relationship between an employee and stockholder is that of principal and agent whereby the stockholder is the principal and employee is an agent who acts on behalf of the principle and gets rewarded through remuneration.
The suppliers of Cheesecake are diverse and are from different regions. Most of them supply food products. The relationship of the company with the suppliers is business in nature, where the company rewards the supplier for goods supplied. The supplier is interested in the continuity of the company to guarantee its future market as well as guaranteed payments from financially stable Cheesecake Factory Inc. Therefore the suppliers are the core stakeholders who begin the business chain which enables the company to offer processed food and other services. The conflict with the suppliers can arise only when there is failure by one part of the contract, which could either be failure of payment or supply.This group of stakeholders forms the core for the purpose of existence of the whole company. They are the users of the company products and in this case the consumers of the food products and cakes. They pay for the services and products and in return they are offered the required service. Therefore, the interest of the consumer is to get the right quality of product and service for the value they are paying. This means that if the customer does not get satisfied with the Cheesecake food products and customer service, then he or she has an option of going to another restaurant. Thus it would be in the interest of other stakeholders to ensure that the customer is maintained so as to sustain their existence in business.Strategic Objectives and Goals
The main strategic objective for the company is to achieve absolute guest satisfaction. This is the goal when achieved, it gives guarantee that the customer would come back and even refer other persons. This strategic objective goes hand in hand with the goal of achieving excellent quality. This is because the excellent quality service brings about the absolute satisfaction (Cheesecake, 2009). The other strategic objective is to maximize stockholders' wealth. This is the process whereby the company focuses on maximizing revenue while keeping costs low. This is an objective which drives investment in any business and should be of concern to the Cheesecake Factory Company. This objective is closely related to the objective of revenue maximization (Cheesecake, 2009).The other strategic objective is to achieve employee satisfaction. This is an objective aimed at attracting and retaining the best workforce at all times since it is the key factor of success in Cheesecake Factory. A satisfied employee will concentrate in the company work resulting in other objective achievement.Strategies for Achieving Objectives and Goals
The use of innovation is the best strategy that leads to achievement of absolute customer satisfaction. One example is that given by the company in the times of regression where the company changed the menu by reducing to quantities that were affordable to many people. Moreover, the innovation of new menu items and ways of service is bound to generate customer satisfaction. The classic designs also works to attract customers (Yee, 2007)The improvement of efficiency by the employees is a sure way of satisfying the customer. The efficiency is the ability to offer the required product and service at the required outlet within the acceptable time. This will include the time a customer enters the restaurant and the time they are served plus the way of service. Thus a lot of investment on employee trainings and workshops will result in efficiency and quality. When it comes to employee trainings, it is important that all employees are trained too so that each business process meets the required quality. This will enable teamwork and achievement of required absolute customer satisfaction thus making the restaurant be most wanted (Douglas, 2009).The other strategy is that of cost-cutting applied in the various processes. According to the company's 2009 annual report, the company saved $27 million out of cost-cutting measures. Therefore this strategy works well to achieve the strategic objective maximization of stockholders wealth (Wong & Wong, 2004) The company prepares policies that allow for only necessary expenditures to be incurred. According to the annual report of the company (2009), the management applies disciplines approach in spending very carefully while managing all the necessary costs.The other strategy is that the company is investing in expansion opportunities (Cheesecake, 2009). This will enable the company to increase its customer base by penetrating into new markets. This strategy ensures that the company increases its revenues and as a result achieves the shareholders' wealth maximization objective. There are available resources and excellent operation managers who ensure that this objective is achieved (Luo,1999).The other strategy is marketing campaigns done to achieve target revenues. The marketing techniques for existing outlets are mainly by "word of mouth" from the satisfied customers (Reid & Bojanic, 2009). That is why the achievement of absolute satisfaction is the core objective. Moreover, for the new outlets, the company will advertise in the radios, televisions as well as elaborate launch campaigns. The awareness has a direct impact on the number of customers coming to the company.The other strategy engaged for successful marketing is the differentiation of restaurants and operations management (Cheesecake, 2009). The company strives to differentiate itself from other competitors so as to become unique. This differentiation is achieved due to innovative products and unique customer care service. The benefit of differentiation is to enable current and potential customers to single out the company from the pool of all other competitors. It requires the company to offer those extra and unique products or services not offered by competitors.The employee satisfaction objective is achieved by developing an effective human resource management. This is achieved by training and education programs sponsored by the company. Moreover, the employees are offered attractive remuneration packages and other personal benefits. The focus on employee problems and solving them will create a sense of concern and belonging to the company thus offering their best in terms of serving the company purpose.The company maintains excellent operating cash flow levels which is crucial for paying off any debts and thus maintaining a financially stable balance sheet (Cheesecake, 2009). By reduction of debt, the company is able to reduce the financing costs, and as result meet the objective of shareholders' wealth maximization. Prudent financial management is applied by the company so as to meet its goals of stable financial position.Cheesecake factory is indeed of the companies that established itself for many years since its inception and has managed to develop a brand name that it uses in its operation. However, the company is faced numerous challenges that need to be addressed in order to meet the objectives of the company. The company needs to address issues of expansion and welfare of workers of workers so as to ensure in order to promoter expansion and retaining of workers who are an important asset to the company. At the moment the company is at its best in terms of operations management and financial position. However, the area of operation of Cheesecake Factory Inc. is limited to a locality in Atlanta, a reason why the paper recommends the company's expansion to other territories. This is because the company has a strong financial base as well as technical knowledge to open outlets in other regions and even go beyond the country borders. This is for the reason that the company has a huge opportunity to expand yet it is limiting itself to a local market where it has gained enough reputation to cross boundaries. There are very few barriers in relation to entering new markets due to unfavorable legislations. Thus the Cheesecake Factory Inc. should utilize the available opportunity and for sure it is going to grow beyond the expectations of all its stakeholders.