Recipe For Success: Case Analysis

Recipe for Success: Case Analysis
Cafe Cupcake (CC) is a fast-casual restaurant chain that offers artisan cupcakes and light fare
throughout the south-eastern United States and Texas. This case chronicles the growth and
evolution of Cafe Cupcake. It also considers the specific human resource challenges the
company's leaders face at the end of the case as they attempt to scale CC's business concept.
By 2018, Cafe Cupcake had achieved several significant milestones. It operated 35 cafes with
almost 700 employees. Its unique restaurant concept and distinctive cupcakes fuelled rapid
growth, which led to a more complex, vertically-integrated organisation.
The original founding team of Emma Bisset and Aneisha Davis recently added Dr. Jonathan
Patel, an expert in organisational behaviour and human-resource management, who turned
down a partnership offer at a leading consulting firm to become Cafe Cupcake's chief
operating officer. The case looks at the organisation from the partners' point of view.
Anticipating continued rapid growth, the partners question how Cafe Cupcake should respond
to strategic, human resource, and organisational challenges that lie ahead. The Cafe Cupcake
case highlights the organisational challenges that companies face as they grow and evolve.
Marketing strategy of Cafe Cupcake needs to meet two broad objectives – carefully selecting
target market and designing marketing activities to achieve desired positioning in the hearts
and minds of the target market. Customer analysis by marketing managers of Cafe Cupcake
can include – growth rate of the industry, potential market size of both the overall market and
target segment, tangible and intangible product features desired by consumers in the industry,
core purpose of buying the products, frequency of purchase, recent purchases, industry
trends, income levels etc.
The core function of marketing strategists and marketing managers is to design marketing
activities that can help Cafe Cupcake to thwart competitive pressures from established
players as well as potential entrants. Marketing managers of Cafe Cupcake have to make
decisions regarding where to position the brands respective to Cafe Cupcake own brands
portfolio and competing brands and if Cafe Cupcake should compete directly with the
competitors or find niche positions within segments, along with considering what type of
competition there are in the industry that Cafe Cupcake operates in. If the competition
intensity is high then the profitability is usually low in any industry. Thus, it will require Cafe
Cupcake to spend higher resources on marketing efforts. Technological innovations can result
in making present positioning less profitable so Cafe Cupcake should continuously innovate
and look for new opportunities.
In international markets the critical question in front of Cafe Cupcake is how much to localise
based on local preferences. Rest of the decisions from production to marketing is based on
this critical decision. Opportunities to localise the production and other processes to reduce
risk of organisation wide supply chain risk in international market. Operating in international
markets can expose Cafe Cupcake to theft of Patents, Copyrights and other Intellectual
Property Rights. Any marketing and diversification decision should be taken after evaluating
these risks. Most global organisations such as Cafe Cupcake are diversifying rapidly to
reduce delivery and supply chain risks. Cafe Cupcake should also focus on it.
Cafe Cupcake charges a premium compared to its competitors, this has provided Cafe
Cupcake resources to not only thwart competitive pressures but also to invest into research
and development. Strong Balance Sheet and Financial Statement of Cafe Cupcake can help it
to invest in new and diverse projects that can further diversify the revenue stream and
increase Return on Sales (RoS) & other metrics. Superior product and services quality can
help Cafe Cupcake to further increase its market share as the current customer are extremely
loyal to it.
There is enough evidence that with such a high quality of products and services, Cafe
Cupcake can compete with other global players in the international market. The products and
brand portfolio of Cafe Cupcake is enabling it to target various segments in the domestic
market at the same time. This has enabled Cafe Cupcake to build a diverse revenue source
and profit mix. Cafe Cupcake has a highly successful track record of both launching new
products in the domestic market but also catering to the various markets based on the insights
from local consumers. As an incumbent in the industry, Cafe Cupcake has strong
relationships with its suppliers and other members of the supply chain.

Recipe For Success: Case Analysis

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