Case 33: California Pizza Kitchen Essay

1082 Words Jul 25th, 2011 5 Pages
Case 33: California Pizza Kitchen

California Pizza Kitchen (CPK) was co-founded in 1985 in Beverly Hills, California by Rick Rosenfield and Larry Flax. Rosenfield and Flax both hold the title of Co-President, Co-CEO, and Co-Chairman of the Board of Directors for California Pizza Kitchen. Susan Collyns, Chief Financial Officer, currently leads the financial team at California Pizza Kitchen which is faced with reducing the corporate income-tax liability while balancing the goal of the management team to grow the business. California Pizza Kitchen is in the food industry business. California Pizza Kitchen is a casual dining restaurant chain that specializes in innovative and non-traditional pizzas. California Pizza Kitchen also
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In addition, Kraft Foods spent 5% of gross sales on marketing California Pizza Kitchen branded pizzas which was more than the 1% of gross sales that California Pizza Kitchen spent on their own marketing. In order for California Pizza Kitchen to continue to successfully grow their business they will need to look at many factors prior to moving forward. California Pizza Kitchen is facing the pressures of increased minimum wage pay requirements, the increasing cost of commodities, and weakening industry sales. Aside from these pressures, California Pizza Kitchen must also realize what is at stake if they continue to grow the business. California Pizza Kitchen should keep in mind the rate at which they grow so that they do not lose quality, patrons, or drive up their costs, which would contradict their concept of “designer pizza at off-the-rack prices”. California Pizza Kitchen’s revenues have increased more than 16% despite the weakened profit percentages of the food industry, whereas, California Pizza Kitchen’s competitors have experienced feeble earnings growth and sales. As costs rose in every direction, California Pizza Kitchen decreased their labor costs by .3%, kept costs of food, beverage, and paper-supply constant at 24.5% (percentages based on second quarter 2006 to second quarter 2007). California Pizza Kitchen credited these strong performance numbers to the operational improvements and enhancements they had

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