Harvard Case - Cassia at Home: A Restaurant Brand Moves to Home Kitchens
"Cassia at Home: A Restaurant Brand Moves to Home Kitchens" Harvard business case study is written by Shreshthi Mehta, Marilyn Anthony. It deals with the challenges in the field of Entrepreneurship. The case study is 14 page(s) long and it was first published on : Aug 8, 2022
At Fern Fort University, we recommend Cassia pursue a hybrid model, leveraging both traditional restaurant operations and the ?Cassia at Home? concept. This strategy will allow Cassia to capitalize on the strengths of each model, mitigate risks, and achieve sustainable growth.
2. Background
Cassia, a popular restaurant chain known for its authentic Southeast Asian cuisine, faces a critical juncture. The company?s traditional brick-and-mortar model is challenged by rising operating costs and changing consumer preferences. Cassia has launched ?Cassia at Home,? a platform connecting customers with home-based chefs offering Cassia?s signature dishes. This innovative approach addresses the demand for convenient, high-quality food while offering a potential solution to the challenges of the traditional model.
The main protagonists are:
- Cassia?s Management Team: Facing the need to adapt to a dynamic market, they are tasked with evaluating the ?Cassia at Home? initiative and deciding its future.
- Home-Based Chefs: They represent a new workforce, offering flexibility and cost-efficiency, but also requiring careful management and quality control.
- Customers: Cassia?s loyal customer base seeks convenience, authenticity, and value, presenting both opportunities and challenges for the new model.
3. Analysis of the Case Study
Strategic Framework: We apply Porter?s Five Forces framework to analyze the competitive landscape and identify key opportunities and threats:
- Threat of New Entrants: High, due to the ease of entry into the home-based food delivery market.
- Bargaining Power of Buyers: Moderate, as customers have various options for food delivery.
- Bargaining Power of Suppliers: Low, as Cassia can leverage its brand and established supply chain.
- Threat of Substitutes: High, with numerous food delivery platforms and home-cooked meal options available.
- Competitive Rivalry: High, with established players like Uber Eats, DoorDash, and other restaurant chains offering similar services.
Financial Analysis:
- Profitability: ?Cassia at Home? offers lower operating costs compared to traditional restaurants, potentially improving profitability.
- Cash Flow: The model?s low capital investment requirements can generate positive cash flow quickly.
- Risk Assessment: ?Cassia at Home? carries risks related to food safety, quality control, and brand reputation.
Operational Analysis:
- Scalability: ?Cassia at Home? can be scaled quickly by onboarding more chefs and expanding delivery areas.
- Technology and Analytics: The platform requires robust technology for order management, payment processing, and customer service.
- Activity-Based Costing: Cassia needs to analyze the cost structure of both models to determine optimal pricing and profitability.
4. Recommendations
1. Hybrid Model: Cassia should implement a hybrid model, retaining its existing restaurants while expanding ?Cassia at Home.? This approach leverages the strengths of both models:
- Traditional Restaurants: Provide a dine-in experience, showcase the brand, and serve as a training ground for chefs.
- ?Cassia at Home?: Offer convenience, expand reach, and capitalize on the cost-efficiency of home-based operations.
2. Strategic Partnerships: Cassia should explore strategic partnerships with established food delivery platforms, leveraging their existing infrastructure and customer base.
3. Quality Control and Brand Management: Cassia must establish rigorous quality control measures for home-based chefs, including:
- Training and Certification: Provide comprehensive training on Cassia?s recipes, food safety standards, and customer service.
- Ingredient Sourcing: Ensure consistent quality by providing chefs with access to Cassia?s approved suppliers.
- Quality Audits: Regularly audit chefs and their kitchens to maintain quality and safety standards.
4. Technology Investment: Cassia should invest in a robust technology platform for ?Cassia at Home,? including:
- Order Management System: Efficiently manage orders, track delivery times, and ensure accurate fulfillment.
- Payment Processing: Secure and reliable payment processing for customers.
- Customer Service: Provide responsive customer service channels for addressing issues and feedback.
5. Marketing and Branding: Cassia needs to communicate the value proposition of ?Cassia at Home? to its target audience:
- Highlight Convenience: Emphasize the ease and speed of ordering and delivery.
- Promote Authenticity: Showcase the quality and authenticity of Cassia?s cuisine.
- Offer Value: Competitive pricing and promotions to attract customers.
5. Basis of Recommendations
1. Core Competencies and Consistency with Mission: The hybrid model leverages Cassia?s existing culinary expertise and brand reputation while expanding its reach and adapting to evolving customer preferences.
2. External Customers and Internal Clients: The model caters to customers seeking convenience and quality while providing opportunities for home-based chefs to earn income and gain experience.
3. Competitors: The hybrid model allows Cassia to compete effectively with both traditional restaurants and food delivery platforms.
4. Attractiveness:
- Financial Analysis: The hybrid model offers the potential for increased profitability and cash flow.
- Risk Management: The model mitigates risks by diversifying operations and leveraging the strengths of both models.
Assumptions:
- Customer Demand: There is sufficient demand for convenient, high-quality Southeast Asian food.
- Chef Availability: A pool of qualified and reliable home-based chefs is available.
- Technology Adoption: Customers are comfortable ordering and paying online.
6. Conclusion
By adopting a hybrid model, Cassia can navigate the challenges of the evolving restaurant industry while capitalizing on the opportunities presented by the ?Cassia at Home? concept. The strategy combines the strengths of both models, mitigating risks and creating a sustainable path for growth.
7. Discussion
Alternatives:
- Exclusive ?Cassia at Home? Model: This approach would focus solely on the home-based platform, potentially leading to faster growth but also increasing risks.
- Traditional Restaurant Only: This option would maintain the status quo, but may result in declining market share and profitability.
Risks:
- Food Safety: Maintaining consistent food safety standards across multiple home-based kitchens is crucial.
- Brand Reputation: Negative reviews or incidents involving home-based chefs could damage Cassia?s brand.
- Technology Failure: Technical issues with the platform could disrupt operations and customer experience.
Key Assumptions:
- Customer Acceptance: Customers are willing to embrace the ?Cassia at Home? concept.
- Chef Quality: Home-based chefs can consistently deliver the quality and consistency expected of Cassia.
- Regulatory Compliance: Cassia can navigate the regulatory landscape for home-based food operations.
8. Next Steps
Timeline:
- Month 1: Develop a pilot program for ?Cassia at Home? in a limited geographic area.
- Month 3: Evaluate the pilot program, refine operations, and expand to additional areas.
- Month 6: Establish strategic partnerships with food delivery platforms.
- Year 1: Fully integrate the hybrid model, including marketing and branding initiatives.
Key Milestones:
- Quality Control System: Implement a rigorous quality control system for home-based chefs.
- Technology Platform: Develop and deploy a robust technology platform for ?Cassia at Home.?
- Marketing Campaign: Launch a targeted marketing campaign to promote the hybrid model.
By taking these steps, Cassia can effectively leverage the ?Cassia at Home? concept to achieve sustainable growth and maintain its position as a leader in the Southeast Asian cuisine market.
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Case Description
Beginning with an ambitious, lean start-up effort in the highly competitive restaurant industry in Auckland, New Zealand, a husband-and-wife team built a small empire of successful fine dining Indian restaurants. Then came the disruption of the COVID-19 pandemic, which exposed their extreme vulnerability to external forces and the subsequent volatility of the restaurant industry. Their quick pivot to launching a line of Indian sauces for home cooks, Cassia at Home, was an instant success. As the couple contemplated different paths to recovery from the pandemic disruption, they wondered how they should expand their newest business into a sustaining brand and what the future of the existing restaurants would look like. Should they continue to expand the new retail business, abandon the move into manufacturing and broader distribution, or even focus on reviving their existing restaurant businesses? An earlier version of the case was awarded Second Place in the 2021 John Molson Business Ownership Case Writing Competition sponsored by the Bob & Raye Briscoe Centre in Business Ownership Studies, John Molson School of Business, Concordia University.
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