* NASCAR Partnership
* Excellent food
* Differentiated brand
* Creativity of owners
* Excellent marketing
* Low infrastructure costs
* Mobile restaurant
* Little brand competition
* Service flexibility
* Proprietary recipes
* Community support/interests
* Professional marketing image
* Lack of cash flow
* Leadership working for two companies
* Loss of founder means all lies on Vaughn
* High travel costs for events outside of Atlanta
* Licensing decision reduces the opportunity of franchise income * Limited distribution capabilities
* Expansion is expensive
* Non-centralized staff
* Lack of business credit
* Limited menu
* Use of ACT funds to finance HHBBQ operations pierces the corporate veil. * Limited catering experience
* Aramark/Pepsi Center opportunity
* NASCAR as growth partner
* Growth within Atlanta
* Brand awareness through additional licensing and potential franchising * Merchandise sales
* Brick-and-mortar Flagship locations
* Popularity of Food Trucks
* Hooters Restaurants
* Other barbecue restaurants
* Customer reluctance to patronize a polarizing brand
* Loss of trade-secret information
* Legal costs
* Economic downturn/slow economic growth
* Rising fuel and transportation costs
* Pitmasters BBQ uses similar logo and brand image:
1. If you were in Kyle Vaughn’s position, which strategic option would you take? Explain your reasoning. Hottie Hawg’s Smokin BBQ was presented with an opportunity for tremendous growth early on in the life of the company that would test the limits of HHBBQ’s ability to raise capital, produce the quantity of food required and maintain the quality of the product while protecting the brand name and mark they had worked to cultivate. The Aramark/Pepsi Center contract would guarantee HHBBQ at least 100 events, projected at 16,000 people per event, and make HHBBQ the exclusive BBQ vendor for the arena.
We believe of the two strategy alternatives HHBBQ had, the correct choice would be to pursue the Aramark contract. As a company that is looking to expand, passing up an opportunity of this magnitude might not occur again. Either of these two strategies are viable and possess pros and cons, but pursuing the Aramark contract would grant HHBBQ more potential rewards than passing. HHBBQ has already worked with one professional sport in NASCAR and the opportunity to serve customers of the NBA and NHL are markets that are too valuable to pass on.
Once the decision to accept the Pepsi Center deal is made, HHBBQ will face more decisions on how best to handle supplying the needed food for the events. HHBBQ would have to re-locate the “18 Squeeler”, an open-air smoker on wheels, to Denver to prepare the BBQ or rent a local kitchen until a permanent commissary was set up. HHBBQ faced legitimate concerns regarding the ability of the Squeeler to meet the high food demand of the Pepsi Center and whether the legal costs, potential loss of food quality and possibility of compromising the brand image when dealing with a rented kitchen would make the deal not profitable.
From the case study, the first 18 Squeeler was available one week after the initial conversation between Vaughn and Rybka. To meet the demand of the Pepsi Arena, HHBBQ should purchase an additional Squeeler so the food quantity and quality are not compromised. Once cash flow has begun and enough capital is raised to open a Denver commissary, the two Squeelers would be freed up to once again to perform at local events within the community and allow one Squeeler to return to Atlanta to service the home market.
These are challenges that service firms face when attempting to match their products to the needs of their target markets (Ferrell & Hartline, 197)....