SWOT Exemplar 2 - First Assignment, Uncle Tetsu SWOT PDF

Preview

Summary

First Assignment, Uncle Tetsu SWOT...

Description

Individual Assignment 1 SWOT Analysis for Uncle Tetsu’s Japanese Cheesecake

Course: COMM 101 Word Count: 1297!

Weaknesses

Strengths

•

Great international presence and brand recognition: Uncle Tetsu has managed to open 70 outlets across multiple continents (NuttallSmith, 2015) demonstrating that their products have overseas appeal. Their brand is well-known overseas, with over 200 people lining-up outside the opening for the Toronto store. (Kwan, 2018)

•

Rigid structure of a franchise: The format of a franchise, i.e, the tried and tested original model that all new outlets are based off of could hinder Uncle Tetsu’s success. For some people, a ‘‘New York cheesecake is unthinkable without cream cheese’’ (Sietsema, 2019), so strict adherence to the original formula could potentially be a weakness.

•

Limited product variety: Apart from the renowned cheesecake, Uncle Tetsu only offers 4 other products (“Products,” n.d.). Customers may be fatigued of consuming the same products over time. (but also seasonal flavours (Asian Journal Press, 2019)

•

Expensive: Uncle Tetsu seems to be pricier than its competition. For example, cheesecake at similarly rated competitors in Toronto such as ‘Wanda's pie in the sky’ (Carlberg, 2017) and Carole’s Cheesecake Cafe (“Carole’s Cheesecake Cafe - Toronto,” n.d.) seem to be approximately half the price (C, 2019).

•

Lengthy wait times: From long lines to lectures about the storage/consumption process, to lengthy preparation times, the process of purchasing cheesecake ends up taking very long which could decentivise potential customers and send them to ready-to-go competitors (NuttallSmith, 2015) (Sietsema, 2019)

•

Rising housing values: Housing values are outpacing wages, even with an increase in median family income. (“Imagine Austin Indicators,” n.d.). This could mean less people who are willing to purchase a luxury good.

•

High prevalence of cardiovascular diseases, diabetes & obesity (“Imagine Austin Indicators,” n.d.): This could potentially result in government intervention, ranging from healthier lifestyle campaigns, to providing monetary rewards for practicing healthier lifestyles. This could affect demand for unhealthy desserts such as cheesecake.

•

Median gross rent high (“Imagine Austin Indicators,” n.d.): Renting space for a store of significant size will increase costs of production, which would affect profits.

•

Decrease in percentage of trips by walking (“Imagine Austin Indicators,” n.d.): Often, people walk into a store when they see it on their way- rather than actively setting out with the intention of going to the said store. A decreasing amount in walking might mean less foot traffic in/by the store.

"

•

Good social media presence: The hashtag #uncletetsu appears in 84,657 posts (as of 12th September 2019). Lifestyle writers such as the Lonely Planet are also aware of its Instagram following (Stanton, 2019). A healthy social media presence can be a signifier of brand awareness and is important for a niche, foreign store.

•

Unique taste: This can ‘‘set it apart from other cakes’’ (Yogaretnam, 2019) as one customer claims. The unique consistency and flavouring could potentially create a market of customers who prefer Uncle Tetsu’s take on cheesecake over the traditional flavour.

•

One cake limit per customer: Limiting the supply serves 2 purposes: creating hype around the product and also keep customers returning to the shop rather then stocking up. (Kwan, 2018)

Opportunities

•

Decreasing unemployment rate: This would suggest more people with higher disposable income and thus more potential customers. (“Imagine Austin Indicators,” n.d.)

•

Foreign allure: The demographics seems to indicate a population with limited exposure to foreign culture, with an overwhelming white majority and 7% Asian minority (“Austin Population,” 2019). Uncle Tetsu is marketed as a Japanese store, from the logo to even the intricate packaging (Sietsema, 2019). This ‘foreign appeal’ may be alluring to the local population.

•

Rapidly growing city: Multiple sources have reported Austin to be 1 of the fastest growing major cities in the US (McCann, 2018) as well as 1 of the best places to start a business (Spiegel, 2016) (Kiernan, 2019). Austin also seems to be attracting many Silicon Valley firms, with Google and Oracle opening offices and Apple opening a $1 billion campus (Laura Begley Bloom, 2019). These indicators point towards success in Austin.

•

Participation in arts and culture by the city (“Imagine Austin Indicators,” n.d.): This could interest more of the population in experiencing foreign culture

Threats

Analysis There seems to be some crossover between Uncle Tetsu’s strengths and weaknesses. For example, their unique taste can both be seen as positive and negative under different scenarios. If we look at their stores in the culturally similar cities of Ottawa and New York City, for example, we can see that while one customer enjoys the different texture and taste (Yogaretnam, 2019), another customer feels somewhat disappointed, perhaps as he was “expecting the taste of cheesecakes as New Yorkers know it” (Sietsema, 2019). This could also potentially be attributed to a greater cheesecake culture in New York, but more likely than not, it probably comes down to preference, tastes and familiarity. Data about trends of preferences may not be readily available but Uncle Tetsu’s international success is an indicator that there is a wide demographic of people who enjoy Uncle Tetsu’s unique style. ! Speaking of their international appeal, a lot of the franchise’s strengths comes from hype around their brand; such as their social media following, long waiting times and the one cake per customer limit (Kwan, 2018). This plays well with the opportunity of their foreign allure in a relatively unexposed, mostly white city of Austin (“Austin Population,” 2019)- at least in comparison with cities cities such as Vancouver which are ethnically and culturally more diverse (“Vancouver Population 2019,” 2019). Alongside this, there is also Austin’s increased participation in the promotion of arts and culture (“Imagine Austin Indicators,” n.d.). Together, these factors seem to suggest a great interest in Uncle Tetsu’s cheesecake, at least initially. Potential problems that might arise after the initial openingafter the novelty and hype dies down. ! As previously mentioned, there are crossovers between their strengths and weaknesses, based on the circumstance. After a period of regular operations, i.e, after the initial opening, factors like one cake per customer could turn into a weakness. While this factor initially created hype and kept customers wanting to return to the store, after a period of regular operation, this rule (as well as the lengthy preparation times) could disincentive customers from returning. This is because the novelty would have worn off and under regular operations, customers would prefer faster service. Similarly, their limited product variety (“Products,” n.d.) and expensive items (C, 2019) could prevent customer retention even people enjoy the products. Once again, the greatest indicator that suggests this will not be the case is their international success. 70 outlets over multiple continents (NuttallSmith, 2015) is a strong indicator of a successful business model, and therefore should not expect any major upsets in Austin. However, it is important to note that most of their American and Canadian stores are relatively recent and thus are somewhat limited in reliability as indicators. ! As for the city of Austin, although there are some negative indicators, overall the city seems to have an upward trajectory. Reports of their rate rapid rate of growth (McCann, 2018) could potentially make Austin a completely different city over the next decade or two. The most concerning threat might possibly be the lack of walking. Uncle Tetsu could continue to build on their social media and marketing strengths to combat this by perhaps introducing seasonal flavours, as they seem to be doing in California (Asian Journal Press, 2019). !

Recommendation While there are concerns over the longevity of customer retention based on Uncle Tetsu’s internal strengths and weaknesses, their incredible intentional success seems to imply a strong business model that would succeed in most major cities. With that in consideration, and with abundant factors suggesting a promising future for the city of Austin, it would be sensible for Uncle Tetsu to expand to Austin, Texas. !

References 1. Asian Journal Press. (2019, August 30). Popular Japanese cheesecake brand searches for “elite taste testers” in CA — Asian Journal News. Retrieved September 13, 2019, from Asian Journal News website: https://www.asianjournal.com/lifestyle/eat-drink/popular-japanese-cheesecake-brand-searches-for-elite-tastetesters-in-ca/! 2. Austin Population. (2019, June 7). Retrieved September 13, 2019, from Worldpopulationreview.com website: http://worldpopulationreview.com/uscities/austin-population/! 3. C, L. (2019). [Tripadvisor Review: It’s ok...wouldn’t line up for it.]. website: https://www.tripadvisor.ca/ShowUserReviews-g155019-d7933088r693415634-Uncle_Tetsu_s_Cheese_Cake-Toronto_Ontario.html ! 4. Carlberg, A. (2017, November 27). Wanda’s Pie in the Sky. Retrieved September 13, 2019, from blogTO website: https://www.blogto.com/bakery/ wandaspieinthesky/! 5. Carole’s Cheesecake Cafe - Toronto. (n.d.). Retrieved September 13, 2019, from Zomato website: https://www.zomato.com/toronto/caroles-cheesecake-cafeyorkville/menu! 6. Imagine Austin Indicators. (n.d.). Retrieved September 12, 2019, from data.austintexas.gov website: https://data.austintexas.gov/stories/s/TopTrends/bbi9-bw4t/!

7. Kiernan, J. S. (2019, May 6). Best Large Cities to Start a Business. Retrieved September 13, 2019, from WalletHub website: https://wallethub.com/edu/best-cities-tostart-a-business/2281/! 8. Kwan, T. (2018, May 16). Photos: A sneak peek inside Metro Vancouver’s first Uncle Tetsu location. Retrieved September 12, 2019, from The Straight Georgia Straight website: https://www.straight.com/food/1076981/photos-sneakpeek-inside-metro-vancouvers-first-uncle-tetsu-location! 9. Laura Begley Bloom. (2019, May 31). Is Austin, Texas, The Best City In America?(Forbes. Retrieved from https://www.forbes.com/sites/ laurabegleybloom/2019/05/31/is-austin-texas-the-best-city-in-america/ #2052bff965c5! 10. McCann, A. (2018, October 2). Fastest-Growing Cities in America. Retrieved September 13, 2019, from WalletHub website: https://wallethub.com/edu/fastestgrowing-cities/7010/! 11. Nuttall-Smith, C. (2015, April 24). Uncle Tetsu Japanese Cheesecake: What’s $10, a lineup and your time worth? Retrieved September 13, 2019, from The Globe and Mail website: https://www.theglobeandmail.com/life/food-and-wine/ restaurant-reviews/uncle-tetsu-japanese-cheesecake-whats-10-a-lineup-andyour-time-worth/article24099905/! 12. Products. (n.d.). Retrieved September 12, 2019, from Uncle Tetsu’s Japanese Cheesecake website: http://uncletetsu-ca.com/products/!

13. Sietsema, R. (2019, September 6). New York’s First Uncle Tetsu Has Japanese Cheesecake That’s a Light and Airy Dud. Retrieved September 13, 2019, from Eater NY website: https://ny.eater.com/2019/9/6/20833824/uncle-tetsu-firstlook-review-robert-sietsema-nyc! 14. Spiegel, D. (2016, August 11). How we chose the Metro 20: America’s Best Places to Start a Business. Retrieved September 13, 2019, from CNBC website: https:// www.cnbc.com/2016/08/11/how-we-chose-the-metro-20-americas-bestplaces-to-start-a-business.html! 15. Stanton, M. (2019, August 16). An Insta-famous Japanese bakery opens in NYC Lonely Planet. Retrieved September 13, 2019, from Lonely Planet website: https://www.lonelyplanet.com/articles/uncle-tetsu-cheesecake-nyc! 16. Vancouver Population 2019. (2019, May 11). Retrieved September 12, 2019, from Worldpopulationreview.com website: http://worldpopulationreview.com/worldcities/vancouver-population/! 17. Yogaretnam, S. (2019, July 26). Uncle Tetsu cheesecake diehards line up early for Elgin Street debut. Retrieved September 13, 2019, from Ottawa Citizen website: https://ottawacitizen.com/news/local-news/uncle-tetsu-cheesecake-diehardsline-up-early-for-elgin-street-debut!...