Introduction and Overview
P. F. Chang’s China Bistro, Inc. is a full-service upscale restaurant which predominately serves Asian-inspired cuisine. There are 197 owned and operated Bistros nationwide, and no global locations currently exist. While the corporate office location is set in Scottsdale, Arizona, the company was originally incorporated in Delaware. Throughout this report, the stock symbol (PFCB) and the shortened title (P.F. Chang’s) will be used interchangeably to identify the organization as a whole. This business was incorporated in January 1996 and made its first initial public offering December 1998. Pei Wei Asian Diner, incorporated December 1999, is the subsidiary of P. F. Chang’s and while it has a sizeable influence on PFCB as a whole, it will not be further mentioned in this report as to simplify the presentation of overall strategic performance. Thus, PFCB will be treated as if it were a stand-alone restaurant.
The “Message” or mission statement that the company exudes and actively pursues is all about the people; “We are truly glad that you are here and we will do everything we can to make you want to come back” (Website, Careers). It is also the driving force behind everything the business does. The values on which the company was founded and operates include Integrity, Trust, Respect, Passion, Commitment, Accountability, and Partnership. Other main focuses include service, teamwork, impression and diversity. To execute the aforementioned, P. F. Chang’s aims to provide customers with a “remarkable dining establishment, employ people who exhibit productive, pleasant, and eager behavior, and create a team committed to doing everything possible to provide an Optimal Dining Experience to every Guest thus making them feel like they have truly been served.” In addition, “greater prosperity is promoted with a warm and inviting atmosphere and diversity is established by blending its staff to facilitate a more fulfilling career” (Website, Careers).
This report will address industry positioning by illustrating a Strategic Group Map and explaining the grouping, direct competitors, and operational strategies of PFCB. Next, the restaurants’ performance will be evaluated according to competition, financials, and threats. Then, the prominent strategic problems will be addressed and relevant recommendations made. Any additional information or comments that are not in the body of the report will be enclosed in the appendix along with any sources and/or references used.
P. F. Chang’s Positioning Strategy
Strategic Group Map
The U.S. Census Bureau defines full-service restaurants as “…establishments primarily engaged in providing food services to patrons who order and are served while seated (i.e. waiter/waitress service) and pay after eating. These establishments may provide this type of food services to patrons in combination with selling alcoholic beverages, providing carry out services, or presenting live nontheatrical entertainment” (NAICS). While this is a very accurate explanation of this segment within the industry, it is extremely broad and simple. Within the full service segment, companies fall into various groupings and rank further based on Price, Quality, and Image; as seen in the Strategic Group Map above. In particular, P.F. Chang’s can be categorized as Casual Dining, but is better suited within the Ethnic Cuisine category. The Ethnic Cuisine group includes higher priced meals from various worldwide locations, such as Italy, China, and Mexico, which are served in a culturally reminiscent environment to evoke authenticity. In designating this cultural classification, restaurant chains like Maggiano’s and the Olive Garden, which are subsets of multi-brand organizations, are being compared against a sole operating business. Keep in mind, using these multi-brands presents a weakness: diluting of the financial calculations.
Direct Competitors and Major...
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