External Environmental Analysis
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MJ Cahill |
External Environmental Analysis
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Executive Summary
In this paper we have been asked to accomplish an external environment analysis of the California Pizza Kitchen. In the introduction section, the purpose, the outcomes, and the methodology adopted have been mentioned. . As part of the research for this paper, a PEST analysis was accomplished as well as looking at the Porter’s Five Forces Analysis. (QuickMBA, 2007; Value Based Management, 2009)
As part of the PEST analysis, the California Pizza Kitchen has to abide by numerous government regulations (federal and state), but it has not reflected negatively on the profits. The California Pizza Kitchen company will more than likely face some economic constraints in terms of costs of the supplies, expansion plans, credit supply, and insurance costs as it continues to move forward as a company. The California Pizza Kitchen is currently working through postings of the company’s possible sale again and may have to deal with negative impact on its future profits and EPS because of its lack of control on franchising and licensing partners. The company 's profitability is also being affected by the current economic downturn with consumers being more conservative with their spending and consumer preferences about the current menu offerings will change especially in terms of nutrition and health related issues. The California Pizza Kitchen is abreast with technological advancements in the industry.
As part of the review of the Five Forces Analysis, one of the key points of the analysis is that bargaining power of suppliers is quite low as the nature of supplies is generic and easily available. The threat of new entrants to the pizza industry is very high, which can be attributed to very low entry barriers in the restaurant industry. The bargaining power of buyers is moderate as consumers are generally loyal as far as they get value for money. Threat of substitutes is again moderate as
MJ Cahill |
External Environmental Analysis
|
Executive Summary
In this paper we have been asked to accomplish an external environment analysis of the California Pizza Kitchen. In the introduction section, the purpose, the outcomes, and the methodology adopted have been mentioned. . As part of the research for this paper, a PEST analysis was accomplished as well as looking at the Porter’s Five Forces Analysis. (QuickMBA, 2007; Value Based Management, 2009)
As part of the PEST analysis, the California Pizza Kitchen has to abide by numerous government regulations (federal and state), but it has not reflected negatively on the profits. The California Pizza Kitchen company will more than likely face some economic constraints in terms of costs of the supplies, expansion plans, credit supply, and insurance costs as it continues to move forward as a company. The California Pizza Kitchen is currently working through postings of the company’s possible sale again and may have to deal with negative impact on its future profits and EPS because of its lack of control on franchising and licensing partners. The company 's profitability is also being affected by the current economic downturn with consumers being more conservative with their spending and consumer preferences about the current menu offerings will change especially in terms of nutrition and health related issues. The California Pizza Kitchen is abreast with technological advancements in the industry.
As part of the review of the Five Forces Analysis, one of the key points of the analysis is that bargaining power of suppliers is quite low as the nature of supplies is generic and easily available. The threat of new entrants to the pizza industry is very high, which can be attributed to very low entry barriers in the restaurant industry. The bargaining power of buyers is moderate as consumers are generally loyal as far as they get value for money. Threat of substitutes is again moderate as
References: Allen, M. (2001). Analyzing the Organizational Environment. Retrieved Mar 7, 2011, from http://www.selectknowledge.com/resources/moduleDetails.asp?ModuleID=86&ModuleCourseID=4 Bensoussan, B.E., & Fleisher, C.S. (2008). Analysis without paralysis: 10 tools to make better strategic decisions. USA: FT press. Retrieved from http://www.mindshifts.com.au/book4.html California Pizza Kitchen 2009 Annual Report [Abstract]. Retrieved from http://files.shareholder.com/downloads/CPKI/1148960364x0x404945/7854C49E-E60F-4CC6-810D-DEA31E72FC2F/2009_Annual_Report.pdf California Pizza Kitchen Website. (2009). 2009 CPK Annual Report. Retrieved Mar 7, 2011, from http://investor.cpk.com/annuals.cfm Grant, R. M. (2005). Contemporary Strategy Analysis. Retrieved Mar 7, 2011, from http://www.contemporarystrategyanalysis.com/ Henry, A. (2008). Understanding Strategic Management. Retrieved Mar 7, 2011, from http://www.oup.com/uk/orc/bin/9780199288304/01student/mcqs/ QuickMBA. (2007). Porter’s Five Forces: A Model for Industry Analysis. . Retrieved Feb 4, 2011, from http://www.quickmba.com/strategy/porter.shtml Value Based Management. (2009). PEST Analysis (2009). Retrieved Feb 4, 2011, from http://www.valuebasedmanagement.net/methods_PEST_analysis.html