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Karam Pizza Case Study

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Updated: Jun 17th, 2019

Strengths

Unusual menu choices

Since its establishment, Karam Pizza has seen a tremendous growth because of the extraordinary menu choices its clients have. Karam Pizza brings together wide variety of Italian and Indian cuisines. This extraordinary menu is the Karam’s biggest strength that increases its competitive advantage.

Quality food

Along with providing unique menu, the pizzerias are also committed to providing quality products to its customers. Given the fact that the competitors are capable of copying and introducing the pizzeria unique menu, the only way to differentiate its food is through quality. This will ensure the customers sustainability.

Large customer base accruing from the working vicinity

The large pull of customers is strength to the business. The customer base consists of the delivery businesses as well as the increasing number of the office workers. These large pools of customers will result into increases in pizzeria sales revenues. This will eventually be used for its expansion and growth.

Strong reputation

The reputation of the business as the only restaurant that offers unique and best quality is another strength of the business. The reputation ensures increased clientele as well as helping in building the brand loyalty. The strong reputation the business has built in the last three years will help it retain its customers. It will also aid the business gain the needed competitive edge.

Weaknesses

Incapacity to service the incoming customers

The pizzeria-limited capacity to service large pool of walk-in customers contributes negatively to its sales revenues. As the restaurant reputation grew the capacity to serve its customers especially during dinnertime was limited.

The limitations were seen in terms of the quantity of food as well as efficiency in delivering services. Order delays together with low food productions have made the restaurant lose some of its customers who made it succeed.

Limited funds

The restaurant lack of funds is a hindrance to its rapid expansion. Karam Pizza is just a mere one-shop restaurant. Therefore, it has not generated enough pool of capital to expand on its operations. Moreover, the restaurant is not large enough to benefit from the economies of scale. Lack of enough capital has a negative effect on its capacity to deliver services to its clientele

Very focused on specific kinds of food

Another weakness the restaurant is facing is the lack of diversification. The restaurant specializes only on one of its combined cuisines. Unlike its competitors that have diversified offers, the restaurant only offers one best combination.

This would lead the restaurant into losing its competitive edge. This is because some independent competitors are adding favorite items into their menus thus luring more customers who are loyal to Karam Pizza.

Opportunities

Rapid growth reported in the market segment

There is growth potential in the restaurant business as more and more cuisines are needed. Moreover, the growing number of the working class in the community the restaurant operates provides a new opportunity for the business growth. Besides the growing number in the walk-in customers, there is simultaneous growth in the number of business within the area. This also presents a growth opportunity for the business.

New menus that are without direct competitors

The restaurant has an opportunity to offer new menus that are not presented by other competitors. Offering a new menu that is different from those in the market can provide the restaurant with an increased competitive edge. The opportunity to offer new menu with no direct competitors will increase the demand for its food items thereby increasing the customer base.

Increased demand for take away

The restaurant should take advantage of the increasing demand for take-away. The increasing number of take-away customers that throng the restaurant during evening hours offers an incentive for the growth of the restaurant. The restaurant should increase its capacity to meet the rising demand that will eventually provide revenues for expansion.

The potential to expand the business

There are several opportunities for the business to expand particularly into new areas. Moreover, the business can expand its services into the business-to-business basis. Other areas where the business can expand its services are the business functions including sales meetings and birthday lunches.

Threats

Competition emerging from well-established restaurants

The biggest threat facing the restaurant is competition from large and well- established restaurants. These restaurants already have networks around the town where Karam is operating. Moreover, independent competitors that offer some of its combinations also pose serious threats to the business.

Competitors are likely to adopt the same menu

The combinations that are being offered by the pizzeria can easily be copied by other restaurants. Currently, the independent is already offering some of its combinations luring some of its customers to their businesses. This result is reduced number of its customers and sales revenue. Besides, the pizzerias are facing the threat of increases in prices of inputs as well as the cost of doing business.

Alternatives that would meet pizzerias’ objectives

Increase its capacity and efficiency

Karam Pizza has the alternative of increasing its capacity to meet the needs of all its customers. In essence, the restaurant should thrive to ensure that both the walk-in and business customers are serviced as required. The advantage is that the business will continue to expand its sales at the same time building its reputation and brand image.

Another advantage is that the business will not continue to lose its customers instead, increase its customer base. However, increasing the capacity can be costly to the business. The other disadvantage is that the pizzeria will be forced to charge different prices. Lower prices will be charged to individual walk-in customers while higher prices will be charged to business deliveries.

Expand into the business-to- business deals

Though the business-to-business deals might not be potential now, it offers the best opportunity for the future. As the number of business increases, the business-to-business deliveries are viable for the future growth. The advantage of business-to-business deliveries is that they are highly priced thereby increasing revenue for the business.

Another advantage is that such deliveries are undemanding since they only require a few staffs to accomplish. The disadvantage with these kinds of businesses is that they are prone to competition. Furthermore, they may take long before making any payments.

Reducing prices

With increased competition from independent pizzerias offering similar combination of cuisines, Karam Pizza can opt for price reductions. However, to attain the reduced prices objective, the business must offer large quantity of food at the same time increasing its efficiency.

Mass production will cover the cost while ensuring that the business enjoys economies of scale. However, in situations where the customer base reduces, the reduction of prices will not be viable. Moreover, the competitors can also reduce their prices. This will have an adverse effect on the business strategy.

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IvyPanda. (2019, June 17). Karam Pizza. Retrieved from https://ivypanda.com/essays/karam-pizza/

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"Karam Pizza." IvyPanda, 17 June 2019, ivypanda.com/essays/karam-pizza/.

1. IvyPanda. "Karam Pizza." June 17, 2019. https://ivypanda.com/essays/karam-pizza/.


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IvyPanda. "Karam Pizza." June 17, 2019. https://ivypanda.com/essays/karam-pizza/.

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IvyPanda. 2019. "Karam Pizza." June 17, 2019. https://ivypanda.com/essays/karam-pizza/.

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IvyPanda. (2019) 'Karam Pizza'. 17 June.

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