No Marshmallows, Just Term Papers
1. Assess Boston Chicken’s business strategy. What are its critical success factors and risks?
Boston Chicken was founded by Scott Beck in 1989. Mr. Beck’s business strategy was to operate a food service store that would compete with established fast-food restaurants and pizza restaurants by offering a product that more resembled a “home-cooked meal,” which potential customers would value more than “fast food,” which potential customers would value as unhealthy.
Boston Chicken executed a rapid growth strategy, growing from 34 stores in 1991 to 534 stores to 1994, taken advantage as the “first mover” to distribute “rotisserie-cooked chicken” and other products associated with traditional home cooking. Their rapid growth rate did not go unnoticed, as rival companies, such as KFC, introduced similar products after Boston Chicken’s success. In order to keep up with competition, Boston Chicken continued to add new products to its menu.
In order to improve its’ performance, Boston Chicken must continue to improve economies of scale. This included building “flagship stores” that was responsible for preparing food for up to 20 satellite stores. This improved the quality and freshness of food, as well as increased utility of facilities. Boston Chicken also continued to improve operations by signing long-term agreements with suppliers. Possible risks include the following:
* Threat of substitute of products: there is no lack of fast-food or casual food options for the American consumer. The idea of a home cooked meal on the go makes sense for double-income couples who might not have time to prepare a meal after work. However, Boston Chicken is not their only alternative.
* Boston Chicken assisted Area Developers (who acted as the franchisees). Boston Chicken provided credit to franchise developers, as well as to Progressive Bagels, a retailer of fresh gourmet developers. In case of a decrease of business, these loans might...