Question

Based on your analysis of Chuck E. Cheese’s strengths and weaknesses, which generic strategy would you recommend for the firm? Develop a brief strategic proposal for the firm and explain how your answer provides the best possible fit with the firm’s strengths and weaknesses.

Answer 1

Chuck E Cheese is an American fast food retail chain which provides a unique combination of food, entertainment and arcade at the same location. This brings whole new perspective of families having fun together at locations closer to home at a much cheaper cost. If we look at the major strengths of this retail chain we can see that they have large number of outlets and have placed themselves as a market leaders and the customers have adopted and absorbed these values fully. The few major weakness that they have they are still confined to US territory and the USP combination gives more focus on entertainment as a while rather than dining. If families wanted to go out to have quite place for food then this may not be the apt place.

One generic strategies that Chuck E Cheese can adopt to ensure the firm is sustainable in the long term is to go across the borders and explore the locations outside US territory. This would mean there are higher markets that can be tapped. If we do a detailed analysis of the fast food market across the globe, there are very few players who give the same value proposition as Chuck E Cheese does. The firm`s management should take the decision to explore the new emerging markets and start with a small pilot at a favorable location. If that is successful they should expand the stores into other regions too. The major factors which can help in standing out in the market are: cost leadership, differentiation and focus. In case of Chuck E Cheese they should focus solely on the differentiation factor so that they can provide a unique value proposition to the customers.

If we do a detailed proposal we should do the following activities:

• Identify the target markets

• Prepare value proposition models for each market

• Identify the differentiation factor from other fast food joints

• Do detailed analysis and get feedback from customers on their expectations

• Prepare the supply chain in such a way that the customers need can be met

• Do a soft opening or a pilot of a store in a location which has suitable target audiences

• Get proper feedback from the customers who visit the outlet

• Do analysis of the feedback and identify plans to mitigate the issues and challenges that arise

• Continuously incorporate the changes suggested by customers and measure the satisfaction levels

• If the customers are satisfied, plan for few more pilots. If they are not satisfied, drop the location and go back to drawing board to identify potential solutions

By doing these activities Chuck E Cheese can prepare themselves to obtain a market status which highlights them as a potential player which has differentiated characteristics as compared to other fast food outlets.

Strategic proposal for expansion

Intent: Expansion of Chuck E Cheese outlet into other territories

Background: Chuck E Cheese is an American fast food chain which provides unique combination of fun, food and entertainment. Ever since its inception they have been fully adopted by the customers and enjoy a favorable position in the market. There are few areas however, which can be improved, the major being expanding the business beyond existing horizons. This proposal intents to highlight the importance of doing a pilot at one location and take the learning to new areas if they are found feasible.

Vision, Values and Mission statement: they remain the same as Chuck E Cheese brand.

Analysis: The analysis part has been explain in the sections above before beginning of strategic proposal:

Expected goals: Validate various hypothesis that are developed regarding the products which can help in making Chuck E Cheese a differentiated player in the new region. The differentiated factors can help in expansion of Chuck E Cheese beyond existing regions.

Executive summary & Plan of action: the high level plan of action has already been detailed above. Sharing the same for reference.

• Identify the target markets

• Prepare value proposition models for each market

• Identify the differentiation factor from other fast food joints

• Do detailed analysis and get feedback from customers on their expectations

• Prepare the supply chain in such a way that the customers need can be met

• Do a soft opening or a pilot of a store in a location which has suitable target audiences

• Get proper feedback from the customers who visit the outlet

• Do analysis of the feedback and identify plans to mitigate the issues and challenges that arise

• Continuously incorporate the changes suggested by customers and measure the satisfaction levels

• If the customers are satisfied, plan for few more pilots. If they are not satisfied, drop the location and go back to drawing board to identify potential solution