California Pizza Kitchen Inc

Topic 

California Pizza Kitchen Inc

Assignment Steps 

Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products. 

Scenario: Imagine you are a business consultant to a firm of your choice. You have been asked to analyze, advise, and create recommendations on how the firm can ensure its future success in its current market. 

Work with your instructor to choose a firm that matches the following criteria: a publicly traded company operating in the U.S. market. Note: A publicly-traded company is a private-sector firm owned by its shareholders/stockholders. 

Prepare a minimum 1,050-word analysis of economic data and business data to explain how the core economic principles impact the sustainability of the firm and what actions the firm can take to ensure success. 

Address the following:

  • Identify the market structure your chosen firm operates in, analyze your chosen firm’s current market share, and identify the firm’s local/global competitors. Analyze the barriers to entry in this market to illustrate the potential for new competition and its impact on your firm’s future in the market. Hints: Be sure you review the barriers to entry discussed in the course text.  You might consider presenting the data graphically.
  • Identify and explain trends in current macroeconomic indicators for the last three years including:
    • The current stage of the business cycle.
    • Real gross domestic product (GDP).
    • Inflation is measured by the consumer price index (CPI).
    • Unemployment rate.
    • Federal funds rate.
    • The current rate for borrowing funds such as the so-called “prime rate.”  Note: A requirement of the Week 1 Influence of Economics on Household Decision Making report was to gather data on the CPI, GDP, and interest rates, so you should consider reviewing the feedback you received on the Week 1 report.
  • Evaluate trends in demand over the last three years and explain their impact on the industry and the firm. Include quarterly (last two quarters) and annual sales (last three years) figures for the product your firm sells. Create business strategies by analyzing information and data related to the demand for and supply of your firm’s product(s) to support your recommendation for the firm’s actions. Remember to include a graphical representation of the data and information used in your analysis.
  • Examine available, current data and information, such as pricing and the availability of substitutes, and explain how you could determine the price elasticity of demand for your firm’s product. Assess how the price elasticity of demand impacts the firm’s pricing decisions and revenue growth.
  • Apply the concepts of variable and fixed costs to your firm for informing its output decisions. For instance, analyze how different kinds of costs (labor, research, and development, raw materials) affect the firm’s level of output.
  • Based on the data gathered and analysis performed for this report write a conclusion in which you:
    • Create business strategies, including price and non-price strategies, based on your market structure to ensure the market share and potential market expansions and explore global opportunities for your business in a dynamic business environment and provide recommendations.
    • Develop a recommendation for how the firm can manage its future production by synthesizing the macroeconomic and microeconomic data presented.
    • Propose how the firm’s position within the market and among its competitors will allow it to take your recommended action.
    • Recommend strategies for the firm to sustain its success going forward by evaluating the findings from demand trends, price elasticity, current stage of the business cycle, and government policies. 

Cite a minimum of three peer-reviewed references and a minimum of two government economic data sources/references. 

Answer Preview 

Barriers to entry

The primary barriers to entry in the industry include economies of scale and location. Economies of scale imply that average costs can decline with the expansion of the business, but high start-up costs imply a barrier to the entry of new firms.

Excellent location determines how the restaurant is visible to the local population and businesses that support the business. New restaurants in the U.S. might find it hard to spot strategic locations or find such locations that face high mortgage or rental rates.

The barriers might influence the performance of California Pizza Kitchen, Inc. positively as it enjoys a loyal customer base. Potential new entrants might face challenges unseating the restaurant as it offers a different experience.

Word Count: 1300