Hottie Hawgs Bbq Case Study

Hottie Hawgs Smokin BBQ Case Study Team 16 Strengths * NASCAR Partnership * Excellent feed * secern nock * Creativity of owners * Excellent marketing * Low infrastructure costs * Mobile restaurant * Little speck competition * Service flexibility * proprietorship recipes * Community support/interests * Professional marketing image Weaknesses * lose of immediate payment flow * Leadership working for two companies * Loss of founder means on the whole lies on Vaughn * High travel costs for events outside of Atlanta * Licensing decision reduces the opportunity of franchise income * Limited distri unlession 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 Opportunities * Aramark/Pepsi midst opportunity * NASCAR as harvest-feast partner * Growth within Atlanta * Brand awareness through additional licensing and potential franc hising * Merchandise sales * Brick-and-mortar Flagship locations * Popularity of Food Trucks Threats * Hooters Restaurants * separate barbecue restaurants * Customer reluctance to patronize a polarizing put up * Loss of trade-secret information Legal costs * Economic downturn/slow economic harvest-feast * Rising fuel and transportation costs * Pitmasters BBQ uses similar logo and smear image 1. If you were in Kyle Vaughns position, which strategic option would you take? Explain your reasoning. Hottie Hawgs Smokin BBQ was presented with an opportunity for tremendous growth early on in the life of the fellowship that would test the limits of HHBBQs ability to raise capital, produce the quantity of food required and maintain the lumber of the harvest-feast while protecting the brand name and mark they had worked to cultivate.The Aramark/Pepsi center field contract would guarantee HHBBQ at least snow 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 have a bun in the ovening 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 as well as valuable to pass on. Once the decision to accept the Pepsi affection deal is made, HHBBQ will face more decisions on how best to handle supplying the need 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 furbish up up.HHBBQ faced legitimate concerns regarding the ability of the Squeel er to meet the high food demand of the Pepsi Center and whether the legal costs, potential loss of food quality and possibility of pliant the brand image when dealing with a rented kitchen would make the deal not profitable. From the case study, the send-off 18 Squeeler was available one week after the sign 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 hard currency flow has begun and rich 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 fraternity and allow for 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). HHBBQ will experience on the job training while learning how to best forecast the correct a mount of food needed to serve the arena and the number of new employees to take in and train to accommodate the number of visitors to the arena.Because most services are dependent upon people (employees, customers), HHBBQ must(prenominal) avoid past mi involvements in variations in quality and difference such as everywherestaffing, food waste, and less than ideal image promotion (Ferrell & Hartline, 198) to maintain high service quality and profitability. Although service quality is a prejudiced phenomenon (Ferrell & Hartline, 198), this particular marketplace would not allow for service customization but allow HHBBQ to focus on food quality and speed of service to meet their customers needs. . small talk on the decision to license the Hottie Hawgs brand preferably than enter into a franchise agreement with Seymour. In the companys situation, is it better to provoke easier expansion through franchising or maintain tight control over brand image through licensing? Explain. At this early stage in Hottie Hawgs Smokin BBQs history, it is important to cultivate the brand image carefully and with almost obsessive attention to detail.The offering of tasty barbecue served by attractive women in a fun and laid-back environment is in its introductory stage (Ferrell & Hartline, 217), and will soon move into the growth stage if all goes well. Hotties must work to grow and build brand equity and establish a differential advantage in the market. This is done through careful setment of the product and brand over this time. Public relations, advertising and incentives are critical at this stage in the brands life, as it sets the tone for the growth and maturity stage.Will this be honourable another barbecue joint or will Hotties stand out among a sea of ribs and wings? Rybka initially envisioned a brand so extreme and offensive (as) to purposely alienate a large portion of the population (Ferrell & Hartline, 519) Allowing a franchisee to potentially dilute this bran d is a encounter they should not be willing to take. The branding strategy employed by HHBBQ depends on the extreme offensiveness they are building, and a franchisee that doesnt have the like tough guts that Vaughn and Rybka have may not be capable of sticking to their vision.Vaughn has done an excellent job and thus far in growing a different style of BBQ restaurant in the southeast, and should protect the emerging brand image fiercely in order to maintain and develop jibe to the companys vision. A license agreement, where complete control notify be exercised over the quality of the food, the brand image, logos and marketing materials allows Vaughn to control the rush of the company, while realizing income from licensed sales.The brand is the most valuable asset to this emerging company in fact, the brands image was the cornerstone of the companys success thus far according to Lee, and therefore, should remain the top priority at this stage in the game (Ferrell & Hartlien, 526). It should also be notable that by licensing the product rather than franchising, HHBBQ has been able to avoid many unnecessary expenditures that go along with franchising. Had they sold Seymour a franchise, they may have had to invest more in him in terms of training, product knowledge, and other resources that HHBBQ cannot spare at the current time.Licensing provided Seymour an avenue to invest without much overhead expense, and dummy up provided HHBBQ with licensing revenue and fees. 3. Assume that Hottie Hawgs is successful with the Aramark/Pepsi Center opportunity. What should Vaughns next move be to continue that growth and success? Vaughns efforts, with the success of the Aramark/Pepsi venture will have resulted in the beginning of the growth stage of HHBBQ BBQ. This continuing growth stage has happened because sales appends will have been occurring rapidly due to the compendium of the product (Ferrell & Hartline, 219).Additionally, Hottie Hawgs BBQ will want to 1. gain a strong and defensible market position and 2. Earn profit to repay debts as well as generous profit to justify miserable forward with the business (Ferrell & Hartline, 219). In order to do this, Vaughns next moves should be to pursue one flagship brick & mortar location, more 18 squeelers to expand the ambit of the product line, look for more venue arrangements that could be profitable, potentially pursue venture capital, and pursue more licensing agreements. Pursuing a flagship brick & mortar restaurant should be an important next step for Vaughn.Up to this point, Vaughn has not built a brick & mortar location because traditional storefronts require heavy upfront investment funds costs (Ferrell & Hartline, 521). However, with the specie flow that a successful Aramark/Pepsi Center opportunity will bring, it will be the right time to invest in a flagship location. A major benefit to creating a flagship store front in Atlanta, GA will be that HHBBQ will be able to finally focus some resources on the opportunities in Atlanta for local catering parties and events in this major metropolitan playing field (Ferrell & Hartline522).This will create more cash flow for the company, and the increased straw man in the Atlanta metropolitan area should help to strengthen the position of the company by fulfilling the event catering need that has not been met there as of yet (Ferrell & Hartline, 213). Purchasing more 18 squeelers to increase the reach of the product line should be a next step for Vaughn. The 18 squeeler was one of the first pieces of equipment bought by Rybka and has proven to be invaluable (Ferrell & Hartline, 519).This smoker allows HHBBQ to reach out to people over a wide geographic area, resulting in increased brand awareness which helps build more brand equity (Ferrell & Hartline, 205). Investing in more 18 squeelers will allow HHBBQ to continue expanding the awareness of its high quality product, which will help set up future associations a nd increased cash flow. In fact, the food truck industry, of which HHBBQs squeeler would be intended part, is growing at a rate of 18. % in North Florida which shows that there are still incredible growth opportunities in this arena, although competition is increasing as well (Haughney, 2). Vaughn should also look for more venue arrangements. These arrangements are great opportunities because they offer tremendous upside potential through solid revenues, profits, and exposure (Ferrell & Hartline, 525). Partnering with major arenas such as the Pepsi Center is ideal because massive amounts of people will see and try the product and take that favorable opinion about the brand home with them.HHBBQ is poised to increase cash flow considerably if they can establish similar arrangements with some of the NASCAR events that they are already affiliated with, other popular arenas such as the Amway Center in Orlando, FL, Turner Field in Atlanta, GA, or busy venues such as major zoos, amusement parks, or even in airports. Venture dandy is another way for HHBBQ may be able to help fund growth after the successful Pepsi Center opportunity. Selling a minority stake of the company for cash may be a very smart move in order to fund future growth.HHBBQ will have enough viability now that there will certainly be interested parties. Venture Capital firms, such as Seed Capital, which provides investment in new start-ups, populate to make a return on their investment (Haughney, 3). HHBBQ could fund major expansion with a large influx of cash, as well as use more support staff to handle the increased demand for product. Increasing the amount of licensing agreements for HHBBQ is also a smart move. Licensing agreements allow HHBBQ to receive substantial cash flow while allowing the company to maintain quality control over both brand and product (Ferrell & Hartline, 524).These controls are still very important, because HHBBQs brand image and great tasting food help set the company a part from competitors. Additionally, HHBBQ currently only has a licensing agreement in the Denver, CO area which means that an incredible growth opportunity exists here. Adding a few other major markets would be a wise move to ensure viable cash flows for HHBBQ. 4. If the Aramark/Pepsi Center opportunity turns out to be unsuccessful, what should Vaughn do to ensure the ongoing viability of Hottie Hawgs?If the Aramark/Pepsi decision proves unsuccessful, then Hottie Hawgs would have the opportunity to focus on other investment opportunities. As they do not have an excess of cash flow, it is our belief that Hottie Hawgs would initially benefit from raising capital. This time would also allow the fledgling company to build experience, maturity, and further develop within the growth stage, while having the additional financial flexibility that would come with more capital. Once Hottie Hawgs has raised ample capital, they would then be able to focus on licensing/franchising, and more Sque elers.This capital would also allow Hottie Hawgs to consider the possibility of a brick and mortar restaurant. Hottie Hawgs has already established that they can attain profitability with the Squeelers once they verify the proper amount of food necessary. So the investment or licensing in additional Squeelers units would allow them to effectively manage the companys growth. If the decision were to prove unsuccessful, Hottie Hawgs could also take that opportunity to move their operations back to closer to their home base. Atlanta, which has a population of over four million, would be a prime location for Hottie Hawgs to grow.Atlanta, which is a major metropolitan market, hosts NASCAR, MLB, NFL, and NBA, all of which could be potential events or venues where Hottie Hawgs could find success. This would also allow Hottie Hawgs to continue to attend successfully proven events, in their proximity, like the Billfish Tournament in Panama City. As noted in the case, Eric Rybkas initial appro ach for Hottie Hawgs branding was to, create enough negative publicity to make the brand infamous, and then slowly morph the brand enough to be mainstream. To ensure viability, Hottie Hawgs can take this unsuccessful decision and turn it an opportunity.They would now have the ability to change their brand to a more mainstream and socially pleasing brand. As we know from our text, a brand is a combination of the companys name, symbol, and design. Taking an opportunity to refine these would fit well into Eric Rybkas initial intent and direction of the company. This unsuccessful decision can also be turned into an opportunity for Hottie Hawgs to consider improvements or revisions of existing products. As noted in our text, these improvements or revisions can create a greater perceived value for the customer.In these challenging economic times, Hottie Hawgs could also consider cost reduction strategies. As noted in our text, cost reduction strategies would allow Hottie Hawgs to maintai n a level of performance, but do so, at a lower price. This would allow Hottie Hawgs to appeal to the most cost conscious customers, but maintain the level of performance that has brought them initial success. This strategy could be achieved by considering lower cost meat providers, lower priced ingredients, or reducing costs in other facets of the restaurant, such as plates, utensils, cups, or napkins.Hottie Hawgs could also consider a co-branding strategy. Hottie Hawgs could contract and have Coke and Hottie Hawgs brand marks on their cups. They could also co-brand with locally prevalent companies to put their advertising on Hottie Hawgs to-go bags or boxes, along with Hottie Hawgs brand marks. Overall, it is our determination that if the Aramark/Pepsi decision proves to be unsuccessful, Hottie Hawgs still has a multitude of opportunities to maintain viability. Hottie Hawgs can consider licensing/franchising opportunities.They can make a decision to raise capital to obtain more Sq ueelers. They can consider other venues, like Atlanta, with the reasons that we noted above. Lastly, they can consider reconfiguring some of their strategies, utilizing concepts from the text, that would allow them to refine some of their strategies in an effort to maximize the fulfillment of the customers needs, while attracting a greater customer base. Even if the Aramark/Pepsi decision is unsuccessful, that does not mean that Hottie Hawgs is void of alternatives that can allow them to maintain viability and rofitability. O. C. Ferrell & Michael D. Hartline Marketing Strategy, Fifth interpretation 2011 Haughney, Kathleen. Keep On (Food) Trucking. 850businessmagazine. com. 850 Business Magazine. Web. 02 March 2013. http//www. 850businessmagazine. com/index. php? option=com_content&view=article&id=601%3Akeep-on-food-trucking&catid=64%3Aq-and-a&Itemid=1 Couret, Jacques. ARC Metro Atlanta Population Hits 4. 17 zillion bizjournals. com. Web. August 09, 2012 http//www. bizjournals. com/atlanta/news/2012/08/09/arc-metro-atlanta-population-hits. html? page=all