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Company Analysis Of Zoes Kitchen

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ZoÐ"«Ð²Ð‚™s Kitchen is a successful restaurant in a new segment of a matured restaurant market. This company creates an at home atmosphere for the consumer to give the perception of an at home meal. There are a lot of competitors within the market and for just this company alone. Though, ZoÐ"«Ð²Ð‚™s is differentiated enough as a whole to not actually have a true competition. There are upcoming threats in the fast-casual market from fast-food chains entering the market through mergers and adding healthier foods to the menus. The purpose of this analysis is to inform and forge a conclusion of what this company should do about its future.

It is with reason to think this company needs to expand or do something to keep its current competitive advantage. Otherwise in this growing market the company will fall to far behind the larger restaurant chains that are gaining substantial interests in this new market.

ZoÐ"«Ð²Ð‚™s kitchen was a natural extension of ZoÐ"« Cassimus’s own kitchen. It was a place livened by her love of family and warm hospitality. Marcus and Zoe opened the first restaurant in Homewood, Alabama, in 1995 only serving lunch 5 days a week. By Dec, 2005 there were 16 locations in 5 states. The menu included a healthy selection of receipts that were carefully created from scratch, which produced the freshest food and also promoted good health. Her son John took it from a single family restaurant into one of the leading concepts in the fast-casual restaurant industry. This fast-casual dining classification was the newest segment to emerge in the maturing industry.

John Cassimus, president, CEO and son of Marcus and Zoe Cassimus, graduated from the University of Alabama in 1990 as a four time football letterman. Once graduated he worked as a financial partner where he really fine tuned his marketing and sales skills. He is described as a hard worker, optimist, excellent salesman, true entrepreneur, and visionary. These attributes are a major contributor to his success in the business world. In 1993 was his start up; which was an apparel company named J-Rag Inc. In 1996 when the company became the leader in imprinted sportswear to cycling manufacturers, he sold it. The next two years of his life where dedicated to traveling and promotion of his new business venture in the company Compensation Management Associates. It was during this time that he turned all his attention towards promoting and helping the family business grow into what it is today. From the beginning John wanted to operate ZoÐ"«Ð²Ð‚™s like a world-class company.

Strategic growth became the company’s main priority. Its main focuses were: growing and achieving economies of scale, finding excellent site locations, and obtaining a steady and predictable cash flow. ZoÐ"«Ð²Ð‚™s was suddenly gaining brand awareness and a big loyal customer base.

Family’s of all sizes that want a dining experience with warm hospitality with garden fresh ingredients to promote healthy recipes. Full home dinners are offered for customers to simply pick it up and have it ready as if Zoe made it herself in your own kitchen. Businesses are also invited to have ZoÐ"«Ð²Ð‚™s deliver boxed lunches to get away heavy, sleepy, eat-while-we-meet fare. These boxed lunches are great for corporate meetings, picnics, and tailgate parties. They pride themselves on having the right balance of convenient, tasty food that’s healthy too. Wholesome isn’t just an afterthought, which is why a nutritionist was hired to analyze the nutritional content of all the recipes. These characteristics have an appeal to almost every fast food lover with the idea of home cooking in mind.

In resent reports there is suggestion that even though the restaurant industry had grown rapidly from 1970 to 2005 it was now regarded as mature. One on which was the McKinsey Quarterly, it projected annual growths of only 2% until the year 2010. Many of the larger company’s in the industry where hurting do to not enough profitability from what they were offering their customers. This consisted on not enough fresh food that was quickly served in a casual environment. The only new growth was projected to come from the segment with strong potential called the “fast-casual”. Even though these fast casual chains were a small part of the overall market they were able to grow by offering the consumer demands. A major challenge for the fast-casual restaurants was how to benefit from economies of scale, while purchasing from small, specialized food suppliers, and maintaining a high level of quality. If fast food companies attempted to move into the fast-casual segment, there would be many obstacles, despite experience and innovative strategy. Most consumers have little time to visit and enjoy sit-down restaurants, but also wanted to eat healthy high quality foods. The fast-casual chain was able to overcome this dilemma and fill these needs and demands with the necessary supply and requirements. This new market was really starting to take off and by the end of the millennium fast-casual was expected to be worth around $35 billion and account for more than half of all food-service growth. In 2005 the restaurant industry included over 870,000 restaurants and employed 11.6 million workers. Fast casual chains which is what ZoÐ"«Ð²Ð‚™s was a part of was growing a very fast pace. In just 2004 the industry grew by 13% and brought in $7.5 billion in sales or 2.5% of the whole $300 billion industry. The restaurant industry as a whole only grew by 4.5%.

In conducting a five forces model and looking at ZoÐ"«Ð²Ð‚™s competitors, ZoÐ"«Ð²Ð‚™s seems to differentiate itself very well. Pressures from competitors and rivals seem to be very strong. Restaurants within a five minute driving time of ZoÐ"«Ð²Ð‚™s are a threat and a strong competitor. Restaurants in general are starting to offer healthier food items on menus. The area of potential new entrants seems to also be very strong. Research has shown that major fast food chains are gaining strength in the market. McDonalds has recently purchased a Mexican Grille and Wendy’s has combined with a CafÐ"© Express. In the area of supplier of raw materials, it seems to be weak because ZoÐ"«Ð²Ð‚™s is still large enough to have a strong bargaining power. Firms in other industries seem to be fairly moderate. Even though there is not a lot of competition right now in fast-casual, Panera, Breada, and other restaurants in the fast-casual still offer moderate pressures. Competitive pressures towards the buyer aspect would be listed as moderate to strong. Though, ZoÐ"«Ð²Ð‚™s has a large loyal



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