The strengths and weaknesses any business possesses, along with its opportunities and threats faced incorporate internal and external factors in creating realistic strategies. Also known as SWOT, this analysis brings about a report of the environment in relations to action and approach. The internal factors, strength and weakness go hand in hand with external factors, opportunities and threats, to portray a full substantial scan of a firm. The resources a corporation carries can be analyzed and benefitted through SWOT analysis to fully make use of its advantages. The weaknesses inside of a firm can be turned around and used as a point to turn around into a strength.
The Cheesecake Factory, a popular distributor and restaurant of desserts originating from Detroit, Michigan opened its first Canadian location in Yorkdale, Toronto. As a well-known brand-named business, a strong customer base already resonates within the country, allowing the company's ethics and menu to be easily replicated to Canadian establishments. Its strong and stable reputation can just as effectively be introduced to Canada. The unique and innovative decorations of the restaurant make it an upscale atmosphere with casual impressions. The various segments in the menu allow the Cheesecake Factory to stick out amongst the highly competitive amount of restaurants in dense cities. The Cheesecake Factory holds recognition from word of mouth within communities, popular influencers, and steady suppliers that would support the transition of the business from one country to another.
In a new environment, there is no data to back up previous knowledge or experience within Canada to give the Cheesecake Factory an idea of Canadian preferences or tastes. The lack of background can make it difficult to market correctly to target the new, considerably foreign audience. Additionally, there is close to no accurate estimate of how high demand will hit. Zacks Equity Research (p.7) claims “[the] Cheesecake Factory's shares have declined 25% year to date, as against the industry's growth of 10.4%” proving the investment return may not be as high as hoped for.
The frail areas of the Cheesecake Factory hold benefits as the more deficient areas can be used as a targeted area to create more advancement. Because of the numerous unfavourable factors, opportunities can be constructed. Further celebrity endorsement, such as rapper Drake, who “is an unabashed fan (Farooqui, Salmaan p.2)” can bring about a sense of nationalism to the business' brand. Cheesecake Factory could take the circumstances to further drive sales in new channels, such as retail and online means. The busy location of an attractive shopping mall will lend support to hitting the target audience of younger generations.
Potential threats intertwine with weaknesses around the environment. The value proposition differences between Canadian and American portions are significant especially as more and more American restaurants enter Canada. The current financial state of interest rates around Canada could affect the success rate of Cheesecake Factory as they may be negatively impacted. A consumer loss could occur with increased awareness of health and wellness, contradicting the main desserts the restaurant carries.
The threats and weakness imposed upon Cheesecake Factory can be a figurative bridge, that may be hard to cross. This obstacle is the path to achieving success through times of hardship for business. Internal strengths are advantages, which can be taken advantage of for opportunities and minimize weakness and threats. The Cheesecake Factory's first Canadian location can use its strong, already existent brand name to benefit from the lack of background data to play around with new methods of marketing, sales channels, and endorsements to eliminate threats such as value proposition and competition. A crucial form of strategic planning and formulation, SWOT analysis not only emphasizes where a business can improve on, but the reasoning behind it.
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