Cheese Cake Factory

...

Significantly, the economic cycle of the country is the main determinant that stands behind taking the decision of whether to eat at a restaurant or at home. If the economy situation in the country is going well and witnesses a growth, then the demand on the restaurants would be high and consumers would be able to pay more at restaurants. While, countries with a sluggish economy would be more likely to spend their money at home, hence the demand on restaurants would be low.

- Global Outlook :

In accordance with Restaurants Market Research in 2013, the global restaurant industry has been forecasted to measure its growth after the next 3 years, the results showed that it would increase at a compound annual growth (CAGR) of 7.2% and the revenues will witness a lift, rising from $2,457.1 billion in 2011 to $3,482.5 billion by the end of 2016 (King, 2013b).

- Analyzing Regions :

- The Cheesecake factory has already its existing footprint in the below regions:

1- America (North and South): 182 Restaurants

2- Middle East: 7 Restaurants

-No footprint in the below regions:

North Africa, Central and Eastern Europe and Asia.

While the US is sweeping the food service market, accounting for 25% of the global market in 2013 (Pearson, 2015), the Cheesecake Factory was responsive to that and have taken the full advantage in developing themselves locally and opened almost 186 restaurants in the US . Throughout those years, TCFI revenues were raising upward, growing from a range of 3% to 6% (Shankar, 2015).Since The Cheesecake Factory has a strong footprint in the U.S., that will weaken the probability of choosing it as a next considered site.

Considered Regions for expansion:

1- Asia

2- Europe

3- Middle East

4- North Africa

The Gross Domestic Product (GDP %) Annual Growth measurement is a good indicator on the health of the countries' economy. Inspecting each region's GDP through fixed number of years will ease the process of choosing a next expansion location for The Cheesecake Factory.

- Regions' GDP % (Annual Growth):

[pic 2]

Figure1: Asia, Europe, Middle East and North Africa GDP % Annual Growth (The World Bank, 2015a).

Europe and Central Asia accounted for a GDP of 2.1% in 2011 and then got decreased by 2.1% in 2012. Although 2013 and 2014 witnessed a growth, but 2014 has ended up with a GDP of 1.3%, which is less than what it was in 2011. That would indicate a non stability in the economic growth of this region(The World Bank, 2015a).

Middle East and North Africa have experienced a GDP of 3.8% in 2011, which is more than what Europe and Central Asia have accounted for at that year. Then, it increased by 0.6% to reach 4.4% in 2012, and that was the highest percentage the Middle East and North Africa have reached during the 4 years. After that, a noticeable decrease in the GDP% was shown in 2013 and 2014, reaching a GDP of 2.6% and 2.2% respectively. This reduction would make it a hard decision to consider these two regions as next expansion locations since the economy situation can be best described as a volatile one, giving no predictions about what could the future bring (The World Bank, 2015a).

East Asia and Pacific have accounted for the highest GDP in 2011 among all of the other compared regions. Maintaining a GDP of 4 %, 4.4% and 4.2% in 3 years a row can provide a great insight on how much their economy is stable. Giving that, in the last year, they have experienced a decrease by .06%, but nonetheless, they still retain a flourishing economy in comparison with all (The World Bank, 2015a).

Overall, Asia and Pacific regions look like good regions to invest in.

- Global Consumer Demand

A recent report by the National Restaurant Association highlighted that while people are getting health aware and tending to look at less-calories options at the menus, the restaurants at the same time are being responsive to that. Offering meals that have high nutritional values became the restaurants core of attention. A survey was conducted to ensure the correctness of that and 8 people out of 10 have confirmed. Also, the report came up with factors that people are considering when they want to dine out, these factors are such as choosing a restaurant that serves a quality and innovation in food at the same time, in which, they request meals that can't be made at home. And because we are in a technological era, people are liking to go to restaurants that offer technology trends, such as self-service kiosks and applications on smart phones that ease the process of ordering and paying, particularly, the number of those people have increased by 20-25% from year ago (National Restaurant Association, 2015).

Casual dining restaurants are attracting more visits from the customers year after year, this was proven when NPD Group; a Leading Global information Company has released figures that shows a growth in the visits; attracted more than 47 million visits compared to 5 years ago. Moreover, Casual dining restaurants' spending has increased by 2% this year in comparison with a year ago (NPD, 2015).

Moreover, the main determinant in each industry is the price and because The Cheesecake Factory is classified as a casual dining restaurant, this means that people who plan to visit such type of restaurants hold expectations to pay money that worth the service and quality provided (The Cheesecake Factory, 2015).

- Global Competition

The base of determining the global competitors for The Cheesecake Factory is those local, regional or global restaurants that are directly and indirectly classified as casual dining restaurants.

Generally, the chief competitors for The Cheesecake Factory include Applebee's, Longhorn Steakhouse, Olive Garden and Red Lobster. All of these restaurants are owned by just 2 companies, who are Darden Restaurants and Dine Equity.

Below are some of these 3 companies' basic metrics:

Restaurant

...