III. Performance of The Firm: Market Performance
A. The Four Brands
In this section, the four brands of the Cheesecake Factory Inc. will be explored, but for the rest of the report
the firm’s largest (both in number of locations as well as market share) restaurant branch, The Cheesecake Factory,
will be the main focus of market performance.
The Cheesecake Factory’s upscale, casual brand is communicated through decorative murals featuring
themes of mythology, history, and astronomy. With details like Egyptian columns, earth-tone murals, and vaulted
ceilings, the restaurants become “fancy” in an accessible, non-specified way. The décor is not focused on one
particular style or culture which represents the broad range of menu items.
The Grand Lux Cafe décor communicates modern sophistication. Two locations are opened 24 hours a day
at casinos in Las Vegas.
RockSugar Pan Asian Kitchen is currently only open at one location in Los Angeles, California. It offers an
upscale, Southern Asian menu and all dishes are served family-style to encourage sharing and conversation. The
décor of the restaurant features design elements which mirror the restaurant’s Southeast Asian branding. The
restaurant also features a full-service bar with an extensive wine list and exotic cocktails, as well as an onsite bakery
which offers freshly-made desserts that combine traditional French style and Asian-influenced items.
B. Customers
With all menu options (excluding the cheesecakes) prepared in-house from scratch, entrees are priced $18$20 per person[v]. This range can be seen as a “middle of the road” pricing compared to other restaurants in the
Chain Restaurant Industry. For a full service, made to order restaurant, this price point could either be seen as a
choice for low-income, brand sensitive customers or middle-class, value sensitive customers.
The extensive menu offers a broad range of options with multiple regions’ cuisines, including Asian,
Italian, Mexican and Indian influenced dishes, as well as bakery products, all of which are in large portion sizes. In
addition to their high quality food product, quality is ensured of every employee hired. The servers are trained on the
menu and drink-to-food pairings much longer at the Cheesecake Factory than most other competitors[vi].
In a not rapidly expanding environment, The Cheesecake Factory stands to feel the same threats of survival
as all other full service, chain restaurants in their industry. The company’s strategies to remain successful nationally
and become successful internationally are focused on product development and promotion as explored below.
C. Product Development
The company centers their efforts on the consumer when developing products. The Cheesecake Factory
updates their main menu twice a year in response to consumer dining preferences, food trends, and nutritional
awareness [ix]. In August 2013, the company added 80 gluten-free options[vii] and in August 2011, the
SkinnyLicious menu was debuted which offers low calorie alternatives, each below 600 calories[viii], to menu
options. The company has also been reducing calories in the regular menu items such as the Bistro Shrimp Pasta
which has fallen to 2,440 calories from 2,980 calories by adding less sauce. The Kids’ Pasta with Alfredo Sauce is
down to 1,290 from 1,810 calories as well.[x]
D. Product Promotion
In terms of marketing techniques, Cheesecake Factory claims that they use much less advertising than their
rivals in the chain restaurant industry. The company’s 10-K Report of 2013 states that advertising costs are included
with other operating costs, and expenses were $5.8 million, $6.2 million and $7.3 million in fiscal 2012, 2011 and
2010, respectively[xi]. The company exclusively uses social media and word of mouth in the United States as
advertising. Some examples of the company’s social media promotion include the Facebook competition in 2012
called “Bad Holiday Moment Exchange” which involved customers uploading images of holiday moments in order
to win gift cards, free slices of cheesecake, and even “cheesecake for a year” [xii]. Another instance of Cheesecake
Factory’s marketing presence was during the same year: a Twitter competition involving New Year’s resolutions
and cheesecake giveaways[xiii]. In addition to these competitions, Cheesecake Factory uses special offers to spread
brand awareness including seasonal cheesecake flavors and, in celebration of National Cheesecake Day, cheesecake
slices for half price. To spread knowledge of such events, the company directly emails customers on their mailing
list. The company’s public relations do include a presence on local and national television for cooking
demonstrations and exposure for special events and deals. The company also partners with several premiere thirdparty gift card retailers which contributes to brand awareness while building gift card sales. To enhance word of
mouth promotion, the Cheesecake Factory depends heavily on location-based relationships with retailers in the same
developments, mall and hotel concierges, and neighborhood groups in the community.
In the international markets, the company has a greater need to promote their new restaurant sites as most
potential customers would be less aware of the Cheesecake brand. In these markets, the company does occasionally
engage in marketing and advertising opportunities including print, billboards, digital and radio. The initial openings
in Dubai and Kuwait generated extensive media coverage on their own throughout the Middle East as well.[xiv]
E. Demand and Market Share
In the US, the Cheesecake Factory currently holds a .9% brand share in the Full-Service Restaurants
Industry, and this number has been increasing steadily since 2004. In the Chained Consumer Foodservice Industry,
the company has consistently maintained .6% of the market. In comparison to the company’s presence in Chained
Consumer Foodservice covering all markets globally, the Cheesecake Factory has declined to .2% from .3% over the
past 9 years (See chart below) [xv].
Geographies
Categories
2007
2008
2009
2010
2011
2012
World
Chained Consumer Foodservice
0.3
0.3
0.3
0.2
0.2
0.2
North America
Chained Consumer Foodservice
0.5
0.6
0.6
0.6
0.6
0.6
North America
Full-Service Restaurants
0.6
0.7
0.7
0.7
0.7
0.8
USA
Chained Consumer Foodservice
0.6
0.6
0.6
0.6
0.6
0.6
USA
Full-Service Restaurants
0.7
0.7
0.8
0.8
0.8
0.9
There are some specific threats which come from this recent growth overseas. In Latin America, the
American-style Mexican food items offered may not be authentic enough for the taste of native consumers. The
target customers would have to be American tourists or people who are specifically looking for an AmericanMexican experience. By locating branches in tourism-rich areas, the previous consumer target market seems the
more profitable. Similarly, in the Middle East, the company’s menu items will have to be completely changed to
comply with Islamic dietary laws, no matter the consumer target market. Alshaya was able to use their existing
supply chain to duplicate the US menu while upholding the brand’s global level of quality. They omitted alcohol and
followed the halal guidelines in local preferences, completely changing the brand’s image to fit its geographical
location.[xvii]
In terms of demand in general, despite location of the restaurant, there are a couple threats for the
Cheesecake Factory to be aware of. With substitutes offering less expensive and quicker food products, customers
are likely to trade down for the offerings at fast casual restaurants, quick-service restaurants, and even grocery
stores. Growing preferences for healthier foods would also be a huge threat against the high caloric and high fat
content of the majority of menu offerings.[xviii]
Endnotes
[v] Stern, Gary M. "Taking A Wider View Of Restaurant Menus." Investor's Business Daily (2012): A08. Business
Source Complete. Web. 16 Sept. 2013.
<http://web.ebscohost.com.pitt.idm.oclc.org/bsi/detail?vid=10&sid=70abf192-7dd5-49df8234306dffb33796%40sessionmgr12&hid=10&bdata=JnNpdGU9YnNpLWxpdmU%3d#db=bth&AN=8432602>.
[vi] Ruiz, Gina. "Cheesecake Factory Cooks Up a Rigorous Employee Training Program."
Workforce.com.Workforce Management, 24 Apr. 2006. Web. 27 Oct. 2013.
<http://www.workforce.com/articles/cheesecake-factory-cooks-up-a-rigorous-employee-training-program>.
[vii] "Overheard." Wall Street JournalJun 17 2013. ProQuest. Web. 15 Sep. 2013 .
[viii] Stern, “Restaurant Menus” see endnote [xi]
[ix] "The Cheesecake Factory Incorporated SWOT Analysis." Cheesecake Factory Incorporated
(The) SWOT Analysis (2013): 1-8. Business Source Complete. Web. 15 Sept. 2013.
[x] Nassauer, Sarah. "Where Calories are Hiding --- Restaurant Strategies to Hit the Right Numbers;Exemption for
'Soup of the Day'." Wall Street Journal. Jul 30 2013. ProQuest. Web. 27 Oct. 2013.
[xi] The Cheesecake Factory Inc. (2013). Form 10-K 2010. Retrieved from SEC filings on
http://investors.thecheesecakefactory.com website.
[xii] Pasarow, Susan. "The Cheesecake Factory - Investor Relations - RSS Content." Investor Relations. Murphy
O’Brien Public Relations, 27 Nov. 2012. Web. 24 Oct. 2013.
<http://investors.thecheesecakefactory.com/phoenix.zhtml?c=109258&p=RssLanding_pf&cat=news&id=1761975>.
[xiii] The Cheesecake Factory Incorporated. The Cheesecake Factory Is Helping Guests Keep
Their New Year's. The Cheesecake Factory Inc. Murphy O’Brien Public Relations, 05 Jan. 2012. Web. 25 Oct.
2013. <http://investors.thecheesecakefactory.com/phoenix.zhtml?c=109258&p=irolnewsArticle&ID=1645420&highlight=>.
[xiv] The Cheesecake Factory Inc., “10-K report”, see endnote [xvii]
[xv] Passport, Appendix 1
[xvi] Peters, Jill. "RSS Content." The Cheesecake Factory Inc. TCF Co., Feb. 2013. Web. 17 Sept. 2013.
<http://investors.thecheesecakefactory.com/phoenix.zhtml?c=109258&p=RssLanding&cat=news&id=1787137>
[xvii] Friend, Elizabeth. "From Franchisees to Foodservice Leaders, Global Partners Are Gaining Ground."
Passport. Euromonitor.com, 08 Mar. 2013. Web. 21 Oct. 2013.
[xviii] “SWOT Analysis”, see endnote [xv]