Food and Dining

  • coca-colaThe recent decision of India’s parliament to allow 100 percent foreign ownership of companies in India is big news to many multinationals that have been dying to get in on the action in the world’s second most populous market, and the massive Coca-Cola Company is no exception. Indeed, with a full re-entry to the country it abandoned in the late 1970s, there’s essentially no corner of the world that will now be without the seemingly ubiquitous white-on-red script of the most successful soft drink in history. But one other major region has given Coke headaches since at least the early 1960s, and going there today one might be hard pressed to find the classic can for sale. Indeed, Coca-Cola has faced a number of challenges in the Middle East, but learning how to turn them into opportunities there could teach the soft drink giant some important lessons it will need for success in India.

  • Anheuser-Busch InBevA corporate strategy article by Thunderbird students Andrea Bly, Sangeetha Nagaratnam, Joseph Rosing, David Roudybush and William Todd

    Can, or even should, the global leader in brewing take on the numerous craft beer companies, whose sole focus is on satisfying the unique tastes of their local customers?

    Blame the Carmel Macchiato. Or maybe the Mocha Frappuccino. I am not sure exactly when the tipping point struck, but at some time post-millennium, the U.S. society morphed into an environment where consumers attempt to display individualism through their sophisticated and differentiated purchases. Accordingly, companies were anxious to provide expanded and unique assortment to meet the evolving consumer demand. Starbucks now has 87,000 different combinations of drinks, which dwarfs the 31 flavors of Baskin Robbins that offered significant variety for many generations of Americans. [1]

  • gap-china476A corporate strategy article by Thunderbird students Manya Andrews Dotson, Wes Herche, Brie Lam, William Randle and Jonathan Walters

    Abstract: Can a cut and paste application of the Chipotle strategy lead to another runaway restaurant success in an industry rife with pressures on profitability? Was it the business model that fueled Chipotle’s meteoric rise? Or was it that CEO Steve Ells took a food we already knew and loved, the burrito, and made it taste even better? Or, are the two inseparable? Will replicating Chipotle’s strategy yield another blue ocean success story?

    The foodie blogs are abuzz … a new naked light bulb has been lit in a stainless steel restaurant in Washington DC’s Dupont Circle. Firmly planted in a neighborhood where restaurants such as Panera Bread, Cosi and Starbucks dot the grid, it fights for purchase in a bloody — if tasty — battle for the upscale business lunch crowd fed up with traditional fa(s)t food (though, there’s some of that around there too). It boasts artisanal tofu, farm fresh ingredients, and free-range meats charred to medium-rare perfection right under the customer’s nose. It would be hard to believe that an Asian restaurant this good could be using the same playbook as the blazing burrito chain, Chipotle.

  • Boston Beer CompanyA corporate strategy article by Thunderbird students Andrea Bly, Jennifer Garcia, Liang-Kuan “Albert” Ho, Steve Juntunen and Kara Nguyen

    Shares of The Boston Beer Company, Inc. (NYSE: SAM) closed Friday, December 16, 2011 at $103.05, up 40% since October. The company, who spearheaded the craft beer revolution in the US, has grown to produce over 32 varieties of beer under the company’s flagship brand, Samuel Adams Boston Lager and a variety of malt beverages and hard cider products under brand names Twisted Tea and HardCore Cider.

    Under its Samuel Adams line, Boston Beer Company leads the craft brewery industry with annual revenues of $500 million in 2010. They have outperformed the uninspired beer market this year, reporting solid increases in sales and profits every month in 2011. This exploding success in the specialty market occurred against the backdrop of dismal growth in the mass market. But even within the specialty segment, Boston Beer has outperformed rivals with 6.6% volume growth in 2011, compared to 5% growth in the craft beer category.

    This spectacular performance has attracted a lot of attention. Currently trading at 25 times the consensus earnings; should investors call it quits before a crash or will The Boston Beer Company be able to leverage recent success into sustainable growth?

  • ebay in ChinaA corporate strategy article by Thunderbird students Joel Baughman, Srinivas Chundi, Mikhail Kholyavko, Chintan Patel and Chris Vadner

    There are striking similarities between the colonial powers of past and contemporary beer conglomerates. For years, there has been an uneasy quiet in the world beer markets as brewers have carved out territories and regions for themselves, often finding themselves in close proximity with competitors. Until now, they have appeared reluctant to disturb the status quo and encroach on competitors’ turf in pursuit of increased market share. Nevertheless, consolidation has accelerated in recent years, leading to high industry concentration. The growth in demand for beer in emerging markets, coupled with saturation and stagnation in developed markets, promises to unsettle this uneasy calm and force brewers to rethink their strategy. As these large conglomerates come under increasing pressure from restless investors looking for revenue and profit growth, any gentleman’s agreement that might exist is less likely to be honored in the future. Major players are poised to engage in full-blown competitive conflict in order to conquer new markets.

  • mcdonaldsBy Shawn Duncan, Srikant Akula, Zarmineh Rab, Roman Yasinsky, Isabella Delboni and Philippe Richard

    McDonalds is the world’s biggest food service retailer serving more than 60 million customers each day in over 30,000 retail locations in 118 countries. McDonalds is growing at an annual rate of 3-8% worldwide. Annual revenues are in excess $24 B with a net income of $4.9 B. Earnings per share $4.59 with a dividend yield at nearly 3%. McDonalds has over 385,000 employees in its various stores around the world.

    In early 2002, after posting a fist quarterly loss McDonalds began a major restructuring of its operations. Over 700 restaurants worldwide were closed and many employees were laid off. McDonalds exited from several countries where brand had a negative perception.

  • McDonald's strategy in IndiaBy Alick Gordon, Arvind Deshmukh, Deviki Gupta, Sam Hung and Chul Won Baek

    Like many young men his age, Rohan was a bit nervous about his first date with Neha. They had been friends for many years, but this was the first time they had been out on their own together. After ordering their food, the waitress responded with the ubiquitous question, “Would you like fries with that?” “Yes please,” responded Rohan before paying and carrying his and Neha’s trays of food back to their table.

    Unlike in the United States, where most young adults would never think of going on a date to McDonald’s, in India it is a widely accepted and welcomed destination. McDonald’s India has carved a niche for itself in an increasingly competitive Indian fast food market by adapting itself in ways uncommon for the company in other parts of the globe. Through the company’s focus on teenagers and young adults as well as a highly specialized menu, McDonald’s has found success in India when many people said it could not be done.

  • chipotle1By Matthew Blong, Richard Kim, Rebecca Knowles, Wei Li, Eri Miyagi and Ryan Scalise

    Stephen Lindner’s eyes lit up as he pulled a hefty burrito wrapped in foil out of a brown bag covered with the catch phrases “I think about Chipotle every time my stomach growls” and “one delicious bite left in the bottom!

    When asked what he liked so much about Chipotle, the graduate student at Thunderbird School of Global Management in Glendale, AZ – famished as he began to devour his burrito – immediately responded, “because it tastes good!”

    Without knowing it, Lindner exemplifies the effect that Chipotle’s strategic advantage has on its customers.  Namely, that Chipotle tastes great because it serves classic Mexican entrees made from organic and locally sourced meats and produce, all under the banner of the company’s motto, “Food with Integrity.”  And like Lindner, few Chipotle customers realize that good taste is, in fact, a direct result of organic ingredients.