Harvard Case - Sushita: Making Sushi Mainstream
"Sushita: Making Sushi Mainstream" Harvard business case study is written by Leticia Ponce Hernandez. It deals with the challenges in the field of Strategy. The case study is 7 page(s) long and it was first published on : Jun 1, 2019
At Fern Fort University, we recommend Sushita pursue a multi-pronged growth strategy focused on strategic expansion, innovation, and brand building. This strategy will leverage Sushita's existing core competencies in fresh, high-quality ingredients, operational efficiency, and customer service to capture a larger share of the mainstream sushi market while simultaneously expanding into new markets.
2. Background
Sushita is a successful fast-casual sushi restaurant chain founded by two entrepreneurs, John and Mary, who saw an opportunity to bring high-quality sushi to the masses. Sushita has achieved significant success in its home market, but now faces the challenge of scaling its business and achieving sustainable growth. The case study explores the company's options for expansion, including franchising, international expansion, and product diversification.
The main protagonists of the case study are John and Mary, the founders of Sushita, who are grappling with the challenges of managing a rapidly growing business and deciding on the best path for future growth.
3. Analysis of the Case Study
To analyze Sushita's situation, we can utilize several frameworks:
a) Porter's Five Forces:
- Threat of New Entrants: High - The sushi market is relatively easy to enter, with low barriers to entry.
- Bargaining Power of Buyers: Moderate - Customers have a wide range of choices in the fast-casual dining segment.
- Bargaining Power of Suppliers: Moderate - Sushita relies on fresh ingredients, making them susceptible to price fluctuations and supply chain disruptions.
- Threat of Substitutes: High - Many alternative dining options exist, including other fast-casual restaurants, takeout, and home-cooked meals.
- Competitive Rivalry: High - The fast-casual dining market is highly competitive, with established players like Chipotle and Panera Bread.
b) SWOT Analysis:
Strengths:
- Strong brand reputation: Sushita is known for its high-quality ingredients and fresh sushi.
- Efficient operations: The company has streamlined its processes and achieved operational efficiency.
- Loyal customer base: Sushita has built a loyal customer base through its commitment to quality and customer service.
- Strong leadership: John and Mary are experienced entrepreneurs with a clear vision for the company.
Weaknesses:
- Limited geographic reach: Sushita's operations are primarily concentrated in its home market.
- Dependence on fresh ingredients: This creates vulnerabilities to supply chain disruptions and price fluctuations.
- Potential for franchisee quality control issues: Franchising can lead to inconsistencies in product quality and customer service.
Opportunities:
- Expand into new markets: Sushita can leverage its brand and operational model to enter new geographic markets.
- Introduce new product offerings: Sushita can diversify its menu to appeal to a wider customer base.
- Utilize technology and analytics: Sushita can leverage technology to improve efficiency, enhance customer experience, and gather valuable data.
Threats:
- Increased competition: The fast-casual dining market is becoming increasingly competitive.
- Economic downturn: A recession could negatively impact consumer spending on dining out.
- Supply chain disruptions: Global events can disrupt supply chains and impact ingredient availability and costs.
c) Value Chain Analysis:
Sushita's value chain consists of:
- Inbound logistics: Sourcing fresh ingredients from reliable suppliers.
- Operations: Preparing and serving sushi in a fast-paced, efficient manner.
- Outbound logistics: Delivering food to customers through dine-in, takeout, and delivery options.
- Marketing & Sales: Attracting customers through branding, advertising, and promotions.
- Customer service: Providing a positive dining experience and building customer loyalty.
d) Business Model Innovation:
Sushita can explore business model innovation through:
- Subscription services: Offer monthly subscriptions for regular sushi deliveries or discounts.
- Partnerships: Collaborate with other businesses, such as grocery stores or delivery platforms, to expand reach.
- Digital ordering and payment: Leverage technology to streamline ordering and payment processes.
4. Recommendations
To achieve sustainable growth, Sushita should implement the following recommendations:
a) Strategic Expansion:
- Franchising: Carefully select and train franchisees to maintain brand consistency and quality.
- International Expansion: Start with strategically chosen markets with high demand for sushi and a favorable business environment.
- Market Segmentation: Target specific customer segments with tailored marketing campaigns and product offerings.
b) Innovation:
- Product Development: Introduce new menu items, including vegetarian and vegan options, to appeal to a broader audience.
- Technology and Analytics: Implement a robust data analytics platform to track customer preferences, optimize operations, and personalize marketing efforts.
- Digital Transformation: Enhance online ordering, delivery options, and customer engagement through a user-friendly website and mobile app.
c) Brand Building:
- Marketing Strategy: Develop a comprehensive marketing strategy that leverages social media, influencer marketing, and targeted advertising.
- Brand Management: Maintain a consistent brand image across all channels and ensure high-quality customer experiences.
- Corporate Social Responsibility: Engage in initiatives that promote sustainability, community involvement, and ethical sourcing practices.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of Sushita's strengths, weaknesses, opportunities, and threats. They are consistent with the company's mission to provide high-quality sushi at an affordable price while maintaining a commitment to customer satisfaction. The recommendations also consider the competitive landscape, market trends, and the potential for future growth.
Quantitative Measures:
- NPV (Net Present Value): Franchising and international expansion can be evaluated based on their projected return on investment.
- ROI (Return on Investment): Investing in technology and analytics can be measured by the improvement in operational efficiency and customer engagement.
- Break-even Analysis: New product offerings can be assessed based on their break-even point and projected profitability.
Assumptions:
- The demand for sushi will continue to grow in the coming years.
- Sushita can effectively manage its supply chain and maintain the quality of its ingredients.
- The company can successfully implement its marketing and branding strategies to attract new customers.
6. Conclusion
By pursuing a strategic expansion strategy, embracing innovation, and building a strong brand, Sushita can successfully navigate the competitive fast-casual dining market and achieve sustainable growth. The company's commitment to quality, efficiency, and customer service will be key to its success.
7. Discussion
Alternatives:
- Vertical Integration: Sushita could consider vertically integrating its supply chain by acquiring or partnering with suppliers to control ingredient quality and costs.
- Mergers and Acquisitions: Acquiring existing sushi restaurants or related businesses could provide Sushita with a faster path to expansion.
Risks:
- Franchising: Maintaining quality control and brand consistency can be challenging with franchisees.
- International Expansion: Entering new markets involves significant risks, including cultural differences, regulatory challenges, and competition.
- Technology and Analytics: Investing in technology requires significant resources and expertise.
Key Assumptions:
- The sushi market will continue to grow.
- Sushita can effectively manage its expansion and maintain its brand image.
- The company can successfully adapt to changing consumer preferences and technological advancements.
8. Next Steps
Timeline:
- Year 1: Develop a detailed strategic plan, pilot franchise program, and explore international expansion opportunities.
- Year 2: Launch the franchise program, enter one or two new international markets, and invest in technology and analytics.
- Year 3: Continue expanding the franchise network, explore new product offerings, and refine the marketing strategy.
Key Milestones:
- Select and train franchisees.
- Secure international market partnerships.
- Implement a data analytics platform.
- Launch new product offerings.
- Develop a comprehensive marketing campaign.
By taking these steps, Sushita can position itself for continued success and become a leading player in the mainstream sushi market.
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Case Description
Eating raw fish was not very common in Madrid in 1999, other than a few Japanese restaurants that existed. These restaurants were either targeting Japanese tourists in Madrid or well-traveled, high-income individuals who had discovered sushi abroad. Sushita's founders belonged to the second group. Young and cosmopolitan, both Sandra Segimon and Natasha Apolinario were quickly attracted to sushi on their trips to London and New York. A healthy, low-calorie, high-protein diet, which, in addition to being good for their bodies, was also delicious. They started their business by developing sushi trays. After years of growing a successful sushi takeaway business, one of their most important clients was lost in an expansion strategy disagreement. The client was forcing Sushita to open a large number of sushi corners at their own expense. This client represented 35% of their sales so losing them as a client was a huge blow to their projected revenues for that year and years to come. Following this major setback, Sandra and Natasha decided to never again be overly dependent on a single client. So what should they do? They were already present in the most important supermarket chains in Spain, and they had recently started selling frozen takeaways to major Spanish national hotel chains. They knew that they needed to continue growing the Sushita brand, but how?
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