1 Values and Strategy Anthony Gatlin STR/581 Strategic Planning and Implementation March 5, 2018 Alex Medina VALUES AND STRATEGY 2 Values and Strategy CaliBurger is a fast-casual restaurant chain that opened its first store in Shanghai in 2012 (Hsu, 2012). This paper identifies an organization’s major components of the strategic management process and discusses how these components work together to create value for the organization. This paper will also evaluate CaliBurger’s mission statement, vision statement, motivation strategy, innovation strategy and people strategy. It will also discuss how the absence of one of these strategies affects the organization and its people. In addition, this paper will also explain the role of ethics and corporate responsibility in strategic planning, including how these direct their strategy. The discussion will then cover how the organization’s vision and mission aligns with this author’s values and vision and how the author’s role influences the company’s values and mission. Strategic Management Process The strategic management process is the full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above-average returns (Hitt, Ireland, & Hoskisson, 2015) The strategy management process involves analysis, strategy and performance. Successful companies use this process to establish the long-term course of action to become more effective than its competition. According to Hitt, Ireland and Hoskisson (2015), the process calls for the company to take note of environment external to the company as well as the company’s internal environment. The company uses analysis of the external and internal environment to formulate its mission and values. The mission and values go into the formulation of the strategy the company will use to outperform its competitors. Subsequently, that strategy is implemented, resulting in strategic competitiveness, and above average returns if executed correctly. VALUES AND STRATEGY 3 This process works to create value for the company because it uses the information obtained during the analysis phase to identify the internal strengths the company can leverage to make it more competitive. If the company has skills or other proprietary assets that are hard for others to replicate or that are too expensive for competing companies to replicate, those skills or assets will be a critical part of the strategy that is developed. The company must also understand the external environment and identify areas that it may legally exploit or that it is uniquely positioned to take advantage of as part of the developing strategy. The combined analysis will help management choose a vision and mission for the company by taking advantage of the strengths the company has internally and of the external opportunities which the company is able to manipulate in its favor. CaliBurger was created by Jonathan Wong, CaliBurger's chef de cuisine and director of training and development. He is a former manager at an In-N-Out store in Northern California (Hsu, 2012). His knowledge of how In-N-Out restaurants operate was a key internal strength for the startup franchise which looks and feels a lot like the stores of his former employer. The founders of Caliburger also saw that there was a great demand for American fast food in countries all over the world including China. This external environment and internal environment set the stage for the vision of the Caliburger founders, California style. The vision of the Golden state spirit and land of dreams is evident in the marketing that they chose to support their brand. CaliBurger executives state that the fresh taste of their burgers is best and use select, high quality ingredients to bring that California fresh flavor to customers yearning for the type of burger made famous by In-N-Out. They formulated a strategy to capitalize on the popularity of flavors In-N-Out had made famous. In fact, John Wong admits the model for their burgers is In-N-Out. Due to the similarity VALUES AND STRATEGY 4 of their offerings with the trademarked products of their American inspiration, CaliBurger found itself involved in a lawsuit that forced them to make some changes to their menu and packaging to satisfy the concerns brought forth by the lawsuit. They tweaked some items enough to satisfy the suit but left enough similarities to attract the customers that yearn for the iconic Double Double but live far away from In-N-Out locations in the western United States. CaliBurger has performed well in executing its strategy to compete where In-N-Out did not exist. It continues to grow its operations through franchising and it has restaurants, in China, Canada, Mexico, Kuwait, Malaysia, Philippines, Qatar, Saudi Arabia, Spain, Sweden, Taiwan, United Arab Emirates and even the United States. The company has opened stores in the same markets as In-N-Out. Part of the strategy the company is executing involves a very high-level innovation strategy which includes using robotics to perform some of the labor previously assigned to human employees. CaliBurgers is testing a robot in its Pasadena store that actually cooks hamburgers. The chain is using this as well as other tech innovations to wow customers. It is also testing facial recognition software that will recognize customers that belong to its loyalty program, provide quick access to that customer’s most common orders and allows the customer to pay using only the facial recognition. In addition to these technological advances, the store has connected to online gaming and allows its customers to compete in its restaurants as they eat their delicious “Cali Double” burgers according to the "Caliburger Always Fresh" (2016) website. The company clearly has its vision, mission and innovative strategies identified. This author did not see a clearly defined motivation and people strategy. These are very important to the success of the company and may cause them to falter unless this omission is addressed. The motivation and people strategy are important aspects to a growing company. The individuals VALUES AND STRATEGY 5 working for the company must know that they have a future with the company that aligns with their expectations otherwise other companies may attract key employees away from them. In-NOut is known for treating its employees well through thorough training and very competitive pay. Because of this, it is seen as a socially responsible corporate citizen with admiral ethics. CaliBurger must show that its ethics and social responsibility are on par with or even better than the company it has imitated. The fact that the company was founded based on the work and reputation built by In-N-Out puts it at a disadvantage from the point of view of all of the loyal fans of the original, including this author. That ethical question is one of the biggest hurdles that it will have to overcome. One way is to continue its innovative ways and do socially responsible work as a corporate citizen. Using fresh ingredients is one way that they are attempting to show social responsibility. Innovative use of technology is another favorable aspect of the company and may just be the competitive advantage they need to stay ahead of the competition as wages rise in the fast food industry. Their overall strategy has helped them grow into a global competitor to be taken seriously. VALUES AND STRATEGY 6 References Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic Management: Competiveness & Globalization: Concepts and Cases (11th ed.). Stamford, CT: Cengage Learning. CaliBurger always fresh. (2016). Retrieved from https://caliburger.com/ Hsu, T. (2012, February 10). In-N-Out vs. CaliBurger: Double-Double trouble in Shanghai. Los Angeles Times. Retrieved from http://articles.latimes.com/2012/feb/10/business/la-fichina-double-double-20120211 1 Values and Strategy Student Name STR/581 Strategic Planning and Implementation March 5, 2018 Professor VALUES AND STRATEGY 2 Values and Strategy CaliBurger is a fast-casual restaurant chain that opened its first store in Shanghai in 2012 (Hsu, 2012). This paper identifies an organization’s major components of the strategic management process and discusses how these components work together to create value for the organization. This paper will also evaluate CaliBurger’s mission statement, vision statement, motivation strategy, innovation strategy and people strategy. It will also discuss how the absence of one of these strategies affects the organization and its people. In addition, this paper will also explain the role of ethics and corporate responsibility in strategic planning, including how these direct their strategy. The discussion will then cover how the organization’s vision and mission aligns with this author’s values and vision and how the author’s role influences the company’s values and mission. Strategic Management Process The strategic management process is the full set of commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above-average returns (Hitt, Ireland, & Hoskisson, 2015) The strategy management process involves analysis, strategy and performance. Successful companies use this process to establish the long-term course of action to become more effective than its competition. According to Hitt, Ireland and Hoskisson (2015), the process calls for the company to take note of environment external to the company as well as the company’s internal environment. The company uses analysis of the external and internal environment to formulate its mission and values. The mission and values go into the formulation of the strategy the company will use to outperform its competitors. Subsequently, that strategy is implemented, resulting in strategic competitiveness, and above average returns if executed correctly. VALUES AND STRATEGY 3 This process works to create value for the company because it uses the information obtained during the analysis phase to identify the internal strengths the company can leverage to make it more competitive. If the company has skills or other proprietary assets that are hard for others to replicate or that are too expensive for competing companies to replicate, those skills or assets will be a critical part of the strategy that is developed. The company must also understand the external environment and identify areas that it may legally exploit or that it is uniquely positioned to take advantage of as part of the developing strategy. The combined analysis will help management choose a vision and mission for the company by taking advantage of the strengths the company has internally and of the external opportunities which the company is able to manipulate in its favor. CaliBurger was created by Jonathan Wong, CaliBurger's chef de cuisine and director of training and development. He is a former manager at an In-N-Out store in Northern California (Hsu, 2012). His knowledge of how In-N-Out restaurants operate was a key internal strength for the startup franchise which looks and feels a lot like the stores of his former employer. The founders of Caliburger also saw that there was a great demand for American fast food in countries all over the world including China. This external environment and internal environment set the stage for the vision of the Caliburger founders, California style. The vision of the Golden state spirit and land of dreams is evident in the marketing that they chose to support their brand. CaliBurger executives state that the fresh taste of their burgers is best and use select, high quality ingredients to bring that California fresh flavor to customers yearning for the type of burger made famous by In-N-Out. They formulated a strategy to capitalize on the popularity of flavors In-N-Out had made famous. In fact, John Wong admits the model for their burgers is In-N-Out. Due to the similarity VALUES AND STRATEGY 4 of their offerings with the trademarked products of their American inspiration, CaliBurger found itself involved in a lawsuit that forced them to make some changes to their menu and packaging to satisfy the concerns brought forth by the lawsuit. They tweaked some items enough to satisfy the suit but left enough similarities to attract the customers that yearn for the iconic Double Double but live far away from In-N-Out locations in the western United States. CaliBurger has performed well in executing its strategy to compete where In-N-Out did not exist. It continues to grow its operations through franchising and it has restaurants, in China, Canada, Mexico, Kuwait, Malaysia, Philippines, Qatar, Saudi Arabia, Spain, Sweden, Taiwan, United Arab Emirates and even the United States. The company has opened stores in the same markets as In-N-Out. Part of the strategy the company is executing involves a very high-level innovation strategy which includes using robotics to perform some of the labor previously assigned to human employees. CaliBurgers is testing a robot in its Pasadena store that actually cooks hamburgers. The chain is using this as well as other tech innovations to wow customers. It is also testing facial recognition software that will recognize customers that belong to its loyalty program, provide quick access to that customer’s most common orders and allows the customer to pay using only the facial recognition. In addition to these technological advances, the store has connected to online gaming and allows its customers to compete in its restaurants as they eat their delicious “Cali Double” burgers according to the "Caliburger Always Fresh" (2016) website. The company clearly has its vision, mission and innovative strategies identified. This author did not see a clearly defined motivation and people strategy. These are very important to the success of the company and may cause them to falter unless this omission is addressed. The motivation and people strategy are important aspects to a growing company. The individuals VALUES AND STRATEGY 5 working for the company must know that they have a future with the company that aligns with their expectations otherwise other companies may attract key employees away from them. In-NOut is known for treating its employees well through thorough training and very competitive pay. Because of this, it is seen as a socially responsible corporate citizen with admiral ethics. CaliBurger must show that its ethics and social responsibility are on par with or even better than the company it has imitated. The fact that the company was founded based on the work and reputation built by In-N-Out puts it at a disadvantage from the point of view of all of the loyal fans of the original, including this author. That ethical question is one of the biggest hurdles that it will have to overcome. One way is to continue its innovative ways and do socially responsible work as a corporate citizen. Using fresh ingredients is one way that they are attempting to show social responsibility. Innovative use of technology is another favorable aspect of the company and may just be the competitive advantage they need to stay ahead of the competition as wages rise in the fast food industry. Their overall strategy has helped them grow into a global competitor to be taken seriously. VALUES AND STRATEGY 6 References Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic Management: Competiveness & Globalization: Concepts and Cases (11th ed.). Stamford, CT: Cengage Learning. CaliBurger always fresh. (2016). Retrieved from https://caliburger.com/ Hsu, T. (2012, February 10). In-N-Out vs. CaliBurger: Double-Double trouble in Shanghai. Los Angeles Times. Retrieved from http://articles.latimes.com/2012/feb/10/business/la-fichina-double-double-20120211 1 Environmental Scan Student Name STR/581 Strategic Planning and Implementation March 12, 2018 Professor ENVIRONMENTAL SCAN 2 Environmental Scan CaliBurger is a fast-casual restaurant chain that opened its first store in Shanghai in 2012 (Hsu, 2012). As a relatively new company, it is essential that the company perform an environmental scan to be successful. As part of that process, the company must determine how to create value and sustain competitive advantage using the environmental scanning strategy. This paper will discuss this aspect as well as evaluate the company’s external environment, assess the company’s general environment and evaluate the organization’s industry operating environment. Environmental Scanning Strategy An integral part of the determination of how to create value and sustain competitive advantage is through environmental scanning. According to Hitt, Ireland and Hoskisson (2015), although challenging, scanning is critically important to a firms’ effort to understanding trends in the general environment and predict their implications. This is particularly the case for companies competing in highly volatile environments. CaliBurger management has made a bold move to step into a highly competitive industry. An analysis of the industry shows that this highly competitive market has a moderate threat of new entry, buyers have the power, there are many substitutes and suppliers lack power. According to Statista (2018), there over 240, 000 quick service restaurants in the United States alone. Most of these are made up of franchises, which must compete for the business of hungry patrons. Due to the size of most of the current successful franchises, the threat of a new entry to the industry is moderate. The size of the existing franchises also give them power over their suppliers. The economy of scale and the many substitutes for quality ingredients allow the franchisers to negotiate favorable terms from the suppliers. ENVIRONMENTAL SCAN 3 In addition to Cali Burger’s inspirational competition, In-N-Out regionally in the US, there are several significant competitors in the global market including McDonalds, Wendy’s, and Yum (the parent company of KFC, Pizza Hut and Taco Bell). These companies are very well managed and compete on a global scale. They all have managed to expand globally using franchising models which have been proven to be successful. Each has well defined supply chains and partnerships with suppliers in their local markets. CaliBurger has worked to create value in its product and sustained a competitive advantage by identifying the desire for the flavors created by In-N-Out in areas of the world that are not served by the original. On top of filling that need, the company has identified areas where it can improve upon the existing models and offer value in areas of entertainment and innovation that would help them stand apart from the current leaders in their general environment. Although the external environment has several challenges for the fast-casual restaurant class, companies are finding ways to adapt to trends and continue to grow. Health consciousness and the trend away from unhealthful fatty foods, have slowed the growth of some fast food restaurants which previously relied on fast, cheap and fatty foods as an integral part of their business model. In addition trends towards vegetarian or low carbohydrate offerings have caused companies to adapt and provide offerings like burgers with no meat (grilled cheese) and burgers with no bun (protein style). Companies like CaliBurger and In-N-Out can survive this trend by adding innovative offerings to their menu to satisfy their core audience while providing alternatives for those who prefer a different meal experience. CaliBurger has leveraged its internal strengths to make it more competitive in the industry operating environment. In an environment that has many fast food restaurants selling ENVIRONMENTAL SCAN 4 essentially, the same product, its skills and assets are a critical part to surviving against competition. While it started in China with little direct competition to what it offered, it has expanded to challenge the supremacy of the In-N-Out Double Double in the very markets that In-N-Out thrives in. It has gone where its primary competition lives and beyond. It has been able to take the basic plan of creating a quality “California” style burger and deliver it to those places where In-N-Out has not. CaliBurger’s co-founder and former manager at an In-N-Out store has used his knowledge of how In-N-Out restaurants operate to take the “Cali style” burger to the next frontier. They saw the great demand for American burgers all over the world. They took this information and created a product and a franchise system to compete on the world stage. As long as they are able to market the fresh taste of their burgers and maintain the select, high quality ingredients that have made customers yearn for the burger made famous by In-N-Out and provide added value by using innovative techniques to keep customers engaged while at the restaurant, they have a good chance of succeeding. This fast-casual restaurant chain must use an effective environmental scanning strategy to compete on the world stage. The information gained from this scan is essential to the company’s ability to create value and sustain a competitive advantage. This has been a discussion of this aspect as well as an evaluation of the company’s external environment, an assessment of the company’s general environment and an evaluation of the organization’s industry operating environment. Through the use of innovative use of new technology like a burger-flipping robot and gaming entertainment League of Legends, the company is creating value and giving itself a competitive advantage. These are some of the key aspects they will use to stay ahead of the competition well into the coming years as they continue their worldwide expansion. These ENVIRONMENTAL SCAN innovations will be keep them ahead of the competition and counter industry pressures. By being first to the market with employee cost reducing technologies that will give them an edge against the pressure of rising costs they can maintain an advantage against the competition as wages and other costs rise in the fast food industry. 5 ENVIRONMENTAL SCAN 6 References Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). Strategic Management: Competiveness & Globalization: Concepts and Cases (11th ed.). Stamford, CT: Cengage Learning. Number of establishments in the United States fast food industry from 2004 to 2018*. (2018). Retrieved from https://www.statista.com/statistics/196619/total-number-of-fast-foodrestaurants-in-the-us-since-2002/ Hsu, T. (2012, February 10). In-N-Out vs. CaliBurger: Double-Double trouble in Shanghai. Los Angeles Times. Retrieved from http://articles.latimes.com/2012/feb/10/business/la-fichina-double-double-20120211
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