Case Study Description of Amici's East Coast Pizzeria (A)
University of California, Berkeley-Haas collectionThe Amici's East Coast Pizzeria case study presents the history of Amici's East Coast Pizzeria, started by Peter Cooperstein and Mike Forter in 1987. The case study allows students to evaluate the company's launch in terms of opportunity identification, as well as to evaluate the company's scaling and growth strategy and options - all in the context of an entrepreneurial startup environment. The (A) case focuses on the history and the founding of Amici's, as well as its strategy, culture, and operations. The (A) case also presents several potential growth options such as selling the company; expanding within the Bay Area; expanding into different regions such as Southern California; franchising; expanding overseas; opening non-conventional distribution venues such as airports; sports venues; and small-location take-out venues; and selling pizza and other products through supermarkets and other retail locations. The (B) case shows what Cooperstein and Forter chose to do such as expanding into Southern California, opening a small venue in the San Jose Sharks arena, and opening a restaurant in Shanghai, China with partner Sophie Lo and her brother Jimmy Lo. Please note: this case also has a supplementary case available. The (B) supplement can be found using product number B5759.
Swot Analysis of "Amici's East Coast Pizzeria (A)" written by Naeem Zafar, Jack Fuchs includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amici's Pizzeria facing as an external strategic factors. Some of the topics covered in Amici's East Coast Pizzeria (A) case study are - Strategic Management Strategies, Growth strategy, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Amici's East Coast Pizzeria (A) casestudy better are - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, there is backlash against globalization,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Amici's East Coast Pizzeria (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amici's East Coast Pizzeria (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amici's Pizzeria, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amici's Pizzeria operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Amici's East Coast Pizzeria (A) can be done for the following purposes –
1. Strategic planning using facts provided in Amici's East Coast Pizzeria (A) case study
2. Improving business portfolio management of Amici's Pizzeria
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Amici's Pizzeria
Strengths Amici's East Coast Pizzeria (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amici's Pizzeria in Amici's East Coast Pizzeria (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Amici's East Coast Pizzeria (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Amici's Pizzeria digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amici's Pizzeria has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Amici's Pizzeria has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Diverse revenue streams
– Amici's Pizzeria is present in almost all the verticals within the industry. This has provided firm in Amici's East Coast Pizzeria (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Amici's Pizzeria has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amici's Pizzeria has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Amici's Pizzeria has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Amici's East Coast Pizzeria (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Amici's Pizzeria is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Amici's Pizzeria is one of the leading recruiters in the industry. Managers in the Amici's East Coast Pizzeria (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Amici's Pizzeria is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Amici's Pizzeria is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Amici's East Coast Pizzeria (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Amici's Pizzeria in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Amici's Pizzeria has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Amici's Pizzeria to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Leadership & Managing People field
– Amici's Pizzeria is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Amici's Pizzeria in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Amici's East Coast Pizzeria (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amici's East Coast Pizzeria (A) are -
No frontier risks strategy
– After analyzing the HBR case study Amici's East Coast Pizzeria (A), it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Interest costs
– Compare to the competition, Amici's Pizzeria has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Amici's Pizzeria has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Amici's East Coast Pizzeria (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Amici's Pizzeria 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Amici's Pizzeria supply chain. Even after few cautionary changes mentioned in the HBR case study - Amici's East Coast Pizzeria (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amici's Pizzeria vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Amici's East Coast Pizzeria (A), in the dynamic environment Amici's Pizzeria has struggled to respond to the nimble upstart competition. Amici's Pizzeria has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Amici's Pizzeria needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Amici's Pizzeria, firm in the HBR case study Amici's East Coast Pizzeria (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Amici's East Coast Pizzeria (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Amici's East Coast Pizzeria (A) can leverage the sales team experience to cultivate customer relationships as Amici's Pizzeria is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Amici's Pizzeria has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Amici's Pizzeria even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Amici's East Coast Pizzeria (A), it seems that the employees of Amici's Pizzeria don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Amici's East Coast Pizzeria (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Amici's East Coast Pizzeria (A) are -
Better consumer reach
– The expansion of the 5G network will help Amici's Pizzeria to increase its market reach. Amici's Pizzeria will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amici's Pizzeria is facing challenges because of the dominance of functional experts in the organization. Amici's East Coast Pizzeria (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Amici's Pizzeria to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amici's Pizzeria can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Amici's Pizzeria can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Amici's Pizzeria in the consumer business. Now Amici's Pizzeria can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amici's Pizzeria to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Amici's Pizzeria to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Amici's Pizzeria can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Amici's Pizzeria can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Amici's Pizzeria has opened avenues for new revenue streams for the organization in the industry. This can help Amici's Pizzeria to build a more holistic ecosystem as suggested in the Amici's East Coast Pizzeria (A) case study. Amici's Pizzeria can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Amici's Pizzeria can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Amici's Pizzeria can use these opportunities to build new business models that can help the communities that Amici's Pizzeria operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Amici's Pizzeria can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Amici's Pizzeria has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Amici's East Coast Pizzeria (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Amici's Pizzeria to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Amici's East Coast Pizzeria (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amici's East Coast Pizzeria (A) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amici's Pizzeria can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Amici's East Coast Pizzeria (A) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Amici's Pizzeria in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Amici's Pizzeria needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Technology acceleration in Forth Industrial Revolution
– Amici's Pizzeria has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Amici's Pizzeria needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Amici's Pizzeria can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Amici's Pizzeria
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Amici's Pizzeria.
Shortening product life cycle
– it is one of the major threat that Amici's Pizzeria is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Amici's Pizzeria business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Amici's Pizzeria.
Environmental challenges
– Amici's Pizzeria needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Amici's Pizzeria can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amici's Pizzeria with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Amici's Pizzeria in the Leadership & Managing People sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Amici's Pizzeria high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Amici's East Coast Pizzeria (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Amici's East Coast Pizzeria (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Amici's East Coast Pizzeria (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Amici's East Coast Pizzeria (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Amici's East Coast Pizzeria (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Amici's Pizzeria needs to make to build a sustainable competitive advantage.
