Category Archives: Analysis

Carrabba’s Comprehensive Marketing Plan

Executive Summary

Casual Dining concepts need to evolve to better serve lapsed consumers and to attract an ever-changing consumer set. Carrabba’s Italian Grills passion is taking care of people. This passion comes from the genuine hospitality founded on the idea that sharing food isn’t just about eating – it’s what connects people to one another.  Carrabba’s is authentic Italian and represents everything they are: heritage, passion for food, love of family, and hospitality in our hearts. Ada Carrabba’s full-service casual Italian dining experience gives consumers quality ingredients, handmade dishes, and cooked to order in a lively exhibition kitchen for consumers to smell and see. Moderately priced casual dining menu entrees are between $10-$30 dollars, featuring a mix of classics Italian American cuisines, individualized dishes with signature sauces, dips or other toppings cuisine.

Carrabba’s brand has matured and it will focus to connect with West Michigan couples. Customers for Ada Carrabba are typically within an 8 to 10 miles radius of Ada Carrabba’s and the average time that our consumers are willing to travel to the dining restaurant is around 17 minutes.  Advertisements will be targeting upper middle class families, couples, and business professionals around Ada and West Michigan.  Messages displaying award winning Italian-American recipes, large selections of wines from around the world, and an exciting family dining atmosphere to create sustainable sales and improve brand awareness. Ada Carrabba’s will use a mixture of push and pull promotional methods to help maintain consumer interest and have brand relevance, each family promotion concept leverages limited-time offers that is featuring seasonal specials. A consistent create message to customers is “The Carrabba’s family sharing award winning Italian American cuisine”.

Ada Carrabba’s chooses a direct-sales, channel because the business has access to the customer keeping all revenue under the control. Ada Carrabba’s will establish retail and online order purchase processes.  The Ada Carrabba’s will enter into a Bloomin’ Brands franchise agreements, the franchisees is required to pay an initial franchise fee and pay monthly royalties based on the percentage of gross restaurant sales (5.75%).



Business Name: Carrabba’s Italian Grill

Business Structure: Company Owned Restaurant

Business Owner: Bloomin’ Brands International is a world class casual dining company with about 95,000 team members and more than 1500 restaurants in 48 states in the USA.  Bloomin Brands consists of Outback Steakhouse, Bonefish grill, and Carrabba’s Italian Grill.

Estimated market share: 4.5%

Carrabba’s Italian Grill – In 2015, 247 U.S. Carrabba’s Italian Grill Restaurants were in operation. 244 were company owned and 4 were franchised.

Founding History – Two Sicilian boys from Texas who love to cook and eat and they loved the Sicilian food their parents and grandparents cooked.


Mission Statement

  • The Original Carrabba’s provides authentic homemade meals that draw on their rich American-Italian recipes.
    • “When you come to the Original Carrabba’s you are family”


Objective, Purpose, and Goals: Carrabba’s Italian Grills passion is taking care of people. This passion comes from the genuine hospitality founded on the idea that sharing food isn’t just about eating – it’s what connects people to one another.  Carrabba’s is an authentic Italian and represents everything they are: heritage, their passion for food, their love of family, and hospitality in their hearts.


Products/ Services: Carrabba’s is full-service casual Italian dining experience offering authentic Italian cuisine passed down from the founder’s’ family recipes, they use quality ingredients to prepare fresh and handmade dishes cooked to order in a lively exhibition kitchen. Featuring a wood-burning grill inspired by the many tastes of Italy, our customers enjoy signature Sicilian dishes with a Deep-South twist, including appetizers-soups and salads- chicken, beef, and pork entrees, seafood, pastas, and pizzas.


Unique Selling Proposition: Carrabba’s food is straight from Italian family recipes brought into this country by our ancestors, used for generations and taught to us by Mama Mandola.  Carrabba’s makes sure that everything is perfect to ensure customers feel special by treating them like part of their family and create memories that last a lifetime.


Situation Analysis


External Factors

Key Industry Competitors

  • Bravo Cucina Italiana
  • Macaroni Grill
  • Magiano’s
  • Olive Garden ( Direct Competitor)
  • Uccello’s Ristorante
  • Vitale’s Restaurant


The Cooperative Environment

  • National Restaurant Association (NRA) – Provides industry news, research, sponsoring events, networking opportunities, and representation, among other things.
  • The NRA conserve program, is a broad initiative that helps restaurants implement conservative practices. The program serves as a catalyst of new solutions, garnering and generating ideas from across the restaurant industry for conservation solutions.
  • Bloomin’ Brands supply chain management.
  • Cooperation between Back of House employees and Front of house Employees


The Competitive Environment

National Industry Trends

  • Major fast food chains and a wide range of other establishments offer meals to eat in or takeaway is a common substitute for consumer in the market
  • The Chain Restaurants industry has a low level of market share concentration, the four largest industry players are estimated to account for about 21.3% of available market share.
  • The restaurant industry is highly competitive with a substantial number of restaurant operators that compete directly and indirectly with Carrabba’s Italian Grill in respect to price, service, location and food quality, and there are other well-established competitors with significant financial and other resources.
  • There is active competition for management personnel, attractive suitable real estate sites, supplies and restaurant employees. In addition, competition is also influenced strongly by marketing and brand reputation
  • Wages and associated labor costs represent the industry’s single biggest cost.


Direct Competitor

Olive Garden – Is owned by Darden Restaurants has more than 800 location in North America.

In 2015, Olive Garden recently launched a dramatically revised menu incorporating culinary buzzwords:

Plates for sharing, lighter fare and smaller portions with prices, specialty items with mix-and-match customizability, and gluten free dishes.

  • One of Olive Garden’s most expensive menu items is $23.99
  • Similar menu price points compared to Carrabba’s Italian Grill.


Vitale’s Restaurant – Are a local competitor of Ada Carrabba’s.  They offer a similar products with Italian American entrée dishes, appetizers, and alcoholic beverages.


The Economic Environment

            National Industry Trends

  • The industry’s annual sales are projected to reach $799 billion in 2017
  • Industry’s share of food dollar is 48 percent
  • Industry sales constitute 4 percent of the U.S. GDP.
  • The Chain Restaurant Industry has average a profit margin equivalent to 4.3% of revenue earned during the past 5 years (2012-2017).
  • Industry Revenue will grow an annual rate of 2.0% to 2020.
  • Licensed chain restaurants typically earn between 15% and 25% of the check value through sales of alcoholic.

The Social Environment

            National Industry Trends

  • Over a 3 year period, per capita income has increased and unemployment has eased, consumer confidence has improved, and therefore giving rise to greater spending on sit down meals.
  • Customer spending is forecasted to increase with an avg. annual rate of 2.7% during the next five years.(
  • Consumers have become more aware of issues related to weight and obesity, nutrition and foods safety then they were before. For many restaurants the health factor has become a key focus of their marketing strategy and has encouraged businesses to target a new segment.
  • According the US Census Bureau the average consumer spends about 5.2% of their annual expenditures on food and beverages outside the home.
  • According to the National Restaurant Association study, 20% of consumers use technology when choosing a full-service restaurants.
  • According to the NRA, an estimated 67% of consumers use smartphones to look up restaurants directions, a number that climbs higher the younger the customers are.


The Legal Environment

National Industry Trends

  • Agency responsible for providing guidance and regulation for restaurants is the US Food and Drug administration’s (FDA).
  • The industry is subjected to laws and regulations relating to the preparation and sale of food, including regulations of product safety, nutritional content and menu labeling. Therefore, requiring licenses to serve food and alcohol
  • Carrabba’s operations are also subject to federal and state laws for immigration, employment, minimum wages, overtime, tip credits, worker conditions and health care.
  • Industry players must monitor changes in government regulations in areas such as food safety, employees and staff, and cash handling.
  • The Americans with Disabilities Act, is federally mandated requirement for the disabled wages and benefit and if not followed, may face fines or risk losing their operating license.
  • Franchising is regulated at the federal level by the US Federal Trade Commission. According the FTC there are three elements of a franchise
    • The franchise has a trademark under which the franchisee is given the right to distribute goods and services.
    • The franchisor has significant control of or provides significance to the franchisee’s method of operation.
    • The franchisee is required to pay the franchisor at least $500 before opening business.

Internal Factors

Figure 1.1

Structure – U.S Industry-Carrabba’s Financial Performance

Year Sales              ($ million) % Change Operating Income            ($ million) % Change
2010 3,634.0 0.2 146.7 4.4
2011 3,793.0 4.4 185.2 26.2
2012 3,934.0 3.7 156.1 -15.7
2013 4,084.0 3.8 196.7 26.0
2014 4,173.0 2.2 163.7 -16.8
2015 4,315.3 3.4 171.8 4.9

Culture Bloomin Brands Inc.

  • As of December 27, 2015, Bloomin’ Brands owned 20% of their restaurant sites and leased the remaining 80% of their restaurant sites from third parties.
  • Income from operations of $230.9 million in 2015 compared to $192.0 million in 2014 , which was primarily due to lower impairments and restaurant closing costs, lower general and administrative expense and an increase in operating margin at the restaurant-level,
  • Before they add an item to the core menu, a research and development (“R&D”) team performs a thorough review of the item, including conducting consumer research, in order to assist Carrabba’s Italian grill in determining the viability of adding the item.
  • Bloomin’ Brands has a dual distribution system which uses vertical integration channels and market governance. There is a relationship between the firm’s distribution strategy and its intangible value with Carrabba’s Italian Grill.
  • Carrabba’s is part of Bloomin’ national distribution program that includes food, beverage, small wares, and packaging goods in all major markets.


Bloomin’ Brands CEO Liz Smith recognizes a growing consumer awareness that it’s costing more and more to eat out then to cook at home.

New Product Market Research –

Bloomin Brands Implements a 12-month pipeline of new menu and promotional items across all concepts that allows them to quickly make adjustments in response to market demands. Research and development for new menu items and significant product changes, they have a testing process that includes direct consumer feedback on the product and it’s pricing. R&D expense was $6.5 million, $5.8 million, and $6.4 million for fiscal years 2015, 2014, and 2013, respectively.

Porter’s Five Forces


Threat of New Entrants

  • The barriers of entry in the Italian chain restaurant industry are low and steady.
  • Franchise Agreements – Entry to the industry can happen through signing a franchise agreement, which includes outfitting and equipment, as well as training and computer systems.


Threat of Substitute Products

  • Food service chains like McDonald’s where customers pay before eating and do not receive table service is a possible.


Bargaining Power of Suppliers –

Food and beverages are usually purchased from wholesalers, particularly from those that can guarantee both prompt delivery and quality foodstuffs.

  • Prices can be affected due to supply, market changes, increased competition, the general risk of inflation, changes in laws, shortages or interruptions in supply due to weather, and other conditions beyond Carrabba’s control.
  • Increased prices or shortages could affect the cost and quality of the items Carrabba’s Italian Grill and in turn would require Carrabba’s to raise prices, limit their menu options or implement an alternative processes or products.
  • In 2015, commodity costs increased by 3.7% and Carrabba’s increased their prices at each location in the range of 2.1% to 2.7%.
  • In short term, many of the cost increases cannot be passed into the consumer, therefore portion sizes and other inputs into food service must be monitored.


  • Selling Industries


Frozen Food wholesaling

Dairy wholesaling

Egg & Poultry Wholesaling

Fish & Seafood Wholesaling

Beef & Pork Wholesaling

Fruit & Vegetable Wholesaling

Beer Wholesaling

Wine & Spirits Wholesaling



Bargaining Power of Buyers

  • The food service industry is affected by consumer preferences and perceptions, including the increasing prevalence of food allergies. Changes in these preferences and perceptions may lessen the demand for Carrabba’s products, which would reduce sales and harm business.
  • Carrabba’s Italian Grill’s key buyers are household consumers in the U.S. The decline of industry revenue during the recession illustrates the extent to which the industry’s performance is reliant on positive income levels, high consumer confidence and a growing economy. Indicating price sensitivity in the market.
  • Young millennial adults in the age bracket 24 to 35 have more disposable income than previous generations because of social trends and spend more of their food budget on eating out than any other age group.


SWOT Analysis



  • Brand Name: A strong brand name is a major strength for Carrabba’s. This gives them the ability to charge higher prices for their product and services because customers are placing additional value associated with the brand.
  • Supply Chain: Carrabba’s strong supply chain helps them obtain the right resources and shipping can be executed in a timely manner. Carrabba’s are managed by a custom distribution company that only provides products approved from the Bloomin’ Brand system.
  • An award-winning Italian American cuisine inspired by the many tastes of Italy.
  • Utilizes a global core menu policy to ensure consistency and quality in their menu offerings.
  • Carrabba’s New product development
  • An attractive customer base of high income consumers.



  • Italian food in general is not unique.
  • Mature Market: Mature markets are competitive. In order for Carrabba’s to grow in the market they need to increase market share which to difficult and expensive.
  • Bloomin Brands Carrabba’s Italian grill reported declines in U.S. customer traffic which fell 4.5 percent in the final quarter of 2016, while it has dropped 3.7 percent Since Jan. 1.


Opportunities –

  • Online Market: Expands Carrabba’s ability to reach a much wider customer base for relatively little expense. Customer can order online and when visiting utilize Ada Carrabba’s Carry out service.
  • New Markets: Serving additional customer groups or marketing segments. New products can help Carrabba’s expand their business and diversify their portfolio.
  • Expanding to new geographical markets



  • Slowdowns in market growth (Matured)
  • Increasing intensity of competition among industry rivals. Industry economics are making it tougher for Bloomin’ Brands and its peers to make a dollar with the intense competition and greater numbers of restaurants in the market.
  • Volatile Costs: Food prices fluctuate meaning Carrabba’s must plan for scenarios where costs could go up.
  • Change in Tastes: Consumers can change their tastes very fast.
  • Substitute Products: The availability of substitute products can hurt Carrabba’s ability to raise prices, because consumers can switch to a different product.


Target Market Description


Primary Customers


Carrabba’s brand has matured and it will focus to connect with West Michigan couples.

  • Target audience is married or considered to be in a relationship phase.
  • Typically have a bachelor’s degree or higher.
  • Have a median household income above $80,000 dollars. Are considered to be in the highest quintile and fourth quintile of income in the market segment.
  • Men and Women between the ages of 24-54.

Attracting more affluent West Michigan family segments.

  • Families considered to be from Generation Y and Millennials Generations
  • Age groups 24-54 and have at least a child under the age of 18.
  • Have a median household income of above $60,000 dollars. Are considered to be in the middle quintile or above in income in the market segment.


Secondary Customers


White and Blue Collar business professionals

  • Men and Women between the ages of 24-54 years old.
  • Have a medium income above $50,000 dollars. Are considered to be in the middle quintile or above in the market segment..
  • Have disposable income to eat out.
  • Are looking for a lunch and dining experiences.


Major Market Segments for Carrabba’s Italian Grill can be inferred on the basis of annual expenditure on foods and beverages outside the home depicted in Figure 1.1.


Figure 2.1


  • Lowest income spends – $1,086 per year, versus highest income spends – $5,366 per year. While the three middle-income quintiles represents and contribute to 52% of demand focused on middle of the range chain restaurants.


  • Information from U.S. Census Bureau indicates that spending patterns within the income brackets are still relevant and the industry’s major market segmentation have not changed dramatically after the recession.


Consumer Demographics 

  • Targeted consumer demographics are based around West Michigan Kent County. I have selected 5 potential cities/townships to analyze in coordination with an implementation plan to establish a new restaurant location. Information is based on 2010 and 2015 U.S. Census.


Figure 2.2

Number of Households in West Michigan

Total Households 492,598
Family Households 336,702
Non-family Households 155,900
Households With Children 171,364
Households Without Children 321,213
Average People Per Household 2.63


Family Households – 68.4 %   Non-Family Household – 31.6%



  • Kent County Population– 602,622
    • 1% – Caucasian
    • 2% – African American
    • 4% – Asian
    • 7% – Native American
    • 7% Hispanic or Latino
  • Kent County Age Distribution
    • Under the age of 18 – 28.3%
    • 18 to 24 – 10.5%
    • 25 to 44 – 31.2%
    • 45 to 64 – 19.7%
    • Over the age of 65 – 10.4%


Kent County Income Distribution (2010 Census)

  • Median income for a household in the county was $45,980.
  • Median income for a family was $54,770.
  • Males had a median income of $39,878 versus $27,364 for females
  • Per capita income for the county was $21,629.


Prospect Cities Populations (2010 Census)

  • East Grand Rapids – 10,694
    • Under the age of 18 – 6%
    • 18 to 24 – 0%
    • 25 to 44 – 5%
    • 45 to 64 – 4%
    • Over the age of 65 – 7%
  • Grand Rapids188,040
    • Under the age of 18 – 0%
    • 18 to 24 – 1%
    • 25 to 44 – 5%
    • 45 to 64 – 7%
    • Over the age of 65 – 6%
  • Grandville15,378
    • Under the age of 18 – 8%
    • 18 to 24 – 7%
    • 25 to 44 – 3%
    • 45 to 64 – 6%
    • Over the age of 65 –               6%
  • Ada Township13,142
    • Under the age of 18 – 6%
    • 18 to 24 – 4%
    • 25 to 44 – 6%
    • 45 to 64 – 3%
    • Over the age of 65 – 1%
  • Walker 23,537
    • Under the age of 18 – 9%
    • 18 to 24 – 9
    • 25 to 44 – 7%
    • 45 to 64 – 3%
    • Over the the age of 65 – 1%
  • Wyoming 72,125
    • Under the age of 18 – 1%
    • 18 to 24 – 5%
    • 25 to 44 – 9%
    • 45 to 64 – 5%
    • Over the age of 65 – 9%


Prospect City Income Distributions (Census 2015)

  • East Grand Rapids
    • Median income for a household in the city was $112,000
    • Median income for a family was $98,967
    • Males had a median income of $66,528 versus $42,383 for females
    • Per capita income for the city was $55,483
  • Grand Rapids
    • Median income for a household in the city $40,355
    • Median income for a family was $44,224
    • Males had a median income of $33,050 versus $26,382
    • Per capita income for the city was $21,027
  • Grandville
    • Median income for a household in the city $53,572
    • Per capita income for the city was $26,463
  • Ada Township
    • Median income for a household in the township was $121,439
    • Median income for a family was $87,972
    • Males had a median income of $61,795 versus $36,288 for females
    • Per capita income for the township was $51,767
  • Walker
    • Median income for a household in the city was $50,903
    • Median income for a family was $58,912
    • Males had a median income of $37,438 versus $28,372 for females
    • Per capita income for the city was $26,583.
  • Wyoming
    • Medium income for a household in the city was $46,849
    • Median income for a family was $50,000
    • Males median income $35,772 versus $25,482 for females
    • Per capita income for the city was $22,39



Figure 2.3

Education (2015 Census) High school graduate or higher, percent of persons are 25+ Bachelor’s degree or higher, percent of persons age 25+
East Grand Rapids 98% 79.3%
Grand Rapids 85.1% 36.6%
Grandville 92.5% 32.9%
Ada Township 97.7% 63.6%
Walker 94.0% 31.5%
Wyoming 84.0% 20.7%


Consumer Geography

  • Customer for a Carrabba is typically within an 8 to 10 miles radius of Ada Carrabba’s
  • The average time that a consumer is willing to travel to a Casual Dining Restaurant is 17 minutes.


Figure 2.4


Consumer Behaviors and Perceptions

  • On average a consumer visit to a casual dining restaurant is substantially longer than at Fast Casual or Quick Serve. Carrabba’s casual dining concept needs to capitalize on this time with consumers to build a relationship that will trigger return visits and increase the concept’s net promoter scores.
  • Based on the average time spent dining is 1-2 hours per visit at Carrabba’s.


Carrabba’s Online Google Consumer Reviews


Erica Byers Pelton 5 months ago- 4 of 5 stars

They have a wide variety of items on the menu to choose from and everything is good. We have always had excellent service here and it is a great atmosphere. It is a little pricer than the other chain restaurants around but the food quality is excellent. It is not affordable enough for us to go regularly but definitely on special occasions.


Sarah Miller a year ago – 5 of 5 stars

The atmosphere is quiet. The food is always good. They now have smaller appetizers available, which is nice for couples. They always put bread with oil on the table. Easily one of my favorite places to eat out.


Gerard Louis a year ago – 5 of 5 stars

My fiancée and I went here for my birthday. We were promptly greeted when we walked in. Our waiter, Caleb, was great! He had the right balance of helpfulness and not hovering. He was also very knowledgeable about the menu and helped us pick a good wine that paired really well with our dinner. The food was phenomenal, I had the lobster ravioli and it was sinfully delicious!



Objectives and Strategies for the Target Market(s)


Objectives – Advertisements targeting upper middle class families, couples, and business professionals around West Michigan displaying award winning Italian-American recipes, a large selection of wines from around the world, and an exciting family dining atmosphere to create sustainable sales and improve brand awareness.

Ada Carrabba’s creative marketing content will focus on the restaurant brand image with “The Carrabba Family always sharing their great food and experiences with you” that marketing message will create an intangible market-base with West Michigan families. Ada Carrabba’s will spend advertising dollars first on lead generations, then on consumer retention, with generating awareness last.


Advertising Strategies and Public Relations Marketing –

  • Ada Carrabba’s will use advertising programs through Bloomin’ Brands national promotions.
  • Ada Carrabba’s will connect with consumers by brand visibility, conducting local marketing, online digital marketing, direct mailing, highway billboards, and promoting point-of-sale materials to consumers.


Traditional Advertising


Local traditional advertising is what most people think of when talking about advertising or marketing. This includes the “usual” venues for media placement, such as newspaper, radio, broadcast television, cable television, or outdoor billboards.
Typical collateral materials needed for your business – like stationery, business cards, or brochures – would also fall under traditional advertising. These are the products that people normally expect from an established business, and are useful for building your business’ brand, identity, and image.


Print Media

  • Newspaper Press Releases – Targeting consumers in the Grand Rapids Press circulation and describing the unique and exciting family dining experience with award winning Italian American cuisine.
  • Flyers – Promotional print media handouts at trade shows and local events telling consumer about Carrabba’s 2016 award winning Italian dishes.


Video Media

  • Local T.V Broadcasting – using continuity scheduling and spreading media spending evenly across months. With an annual budget of $44,000 a year, continuity scheduling would allocate exactly $4,000 per month. This method ensures steady brand exposure over each purchase cycle for individual consumers. It also takes advantage of volume discounts in media buying.
  • Online Video Advertising – Using bloomin’ brands national T.V branding efforts to help our location to draw consumer’s attention.


Local Radio Broadcasts

  • Verbal descriptions to describe Carrabba’s Authentic Italian inspired dishes. Using local broadcasting stations around West Michigan.


Local Billboards

  • Targeting high volume traffic highways around Grand Rapids, specifically U.S. 131 North and U.S 196 East.




Online Advertising With culture trends leading to a digital-savvy consumer market, full service chain restaurants are continuing to invest in technology. Online channels are vital for restaurant chains like Carrabba’s Italian Grill, because online presence, brand awareness, and digital marketing strategies are effective due to the amount of time consumers now spend on their desktops, tablets, and smartphones. Ada Carrabba’s uses digital advertising and publishing networks to help the restaurant be more efficient with advertising expenditures. Online mediums will help to execute and develop relevant and timely campaigns and promotions based on local consumer demand.


Social Media Platforms and Search Engine Marketing Strategies

Objective –Is to have customer engagement and feedback from an online medium.


Facebook – Post on social media platform 2-3 times a week with community news and responses.

Twitter -Post on social media platform 2-3 times a week with community news and responses.

  • Both will promote Carrabba’s loyalty programs and contests to local consumers.
  • Discuss and inform consumers about Daily Chef Specials and new product launches.


Mobile marketing – Contacting new and loyal customers with mobile promotions

  • Targeting iPhone and Android smartphones for advertising and promotional content. According to the NRA, an estimated 67% of consumers use smartphones to look up restaurants directions, a number that climbs higher the younger the customers are.
  • Text messaging contest will attract brand awearness.

Using a CPC model, Ada Carrabba’s can connect with mobile internet users with Google mobile ads


Email marketingOffering food and beverage promotions

  • com page discussing the 25 email marketing statistics “44% of email recipients made at least one purchase last year based on a promotional email. (” and “7 in 10 people say they made use of a coupon or discount from a marketing email in the prior week. (2012 Blue Kangaroo Study)”.
  • According to a study by ExactTarget, 77% of consumers prefer to receive permission-based marketing communications through email. Companies that have the ability to manage, organize, and execute email campaigns while including the scheduling emails at a specific time and date, creating triggered campaigns.


Paid Search Advertising – Key to success is picking the right Keywords.

  • Using Google analytics.
  • PPC advantages is the ability for marketers to become the most relevant search term for a webpage online. Carrabba’s will do this by paying per click, this method becomes an effective short term boost in web traffic to Carrabba’s.
  • A clear disadvantage for this method is that PPC marketing methods will be constrained by budget factors for the business. Therefore when the budget runs out so does Carrabba’s online marketing in PPC.


Search Engine Optimization – Key to Success is consistent online creative social promotions, social content and Ada Carrabba’s information.

  • Searches drives an incredible amount of both online and offline economic activity.
  • Higher rankings in the first few results are critical to visibility.
  • Being listed at the top of the results not only provides the greatest amount of traffic, but also instills trust in consumers as to the worthiness and relative importance of the company or website.
  • An advantage for SEO with the business is it can be more efficient in the cost per click overtime after the webpage is established with an authoritative page ranking.
  • Some disadvantages are the high upfront costs in building website content and for the long term benefits and it gaining the attention of consumers.


Marketing to Target Lifestyles

  • Communicators – Individuals who like expressing themselves, whether it’s face to face, mobile to mobile, or social networking sites, and emailing people. Are working or attending college and are interested in sports, pop culture, and latest trends.
  • Knowledge-Seekers – Are Individuals who want to gain information to educate themselves about the world. They want to hear from like-minded people during a purchasing decision.
  • Networkers – Are Individuals who like to establish and maintain relationships. Have a busy lifestyle, they are considered professional, trade worker, or managing at home. Use social networking to keep in touch with people is a heavy internet user



Marketing Position and Mix Summary



Offering the finest in food, service and atmosphere with the casual price.


Easy in store and online purchasing – Creating and applying simple and easy purchase methods for consumers


Carrabba’s Italian Casual Dining Menu

Offers authentic Italian cuisine passed down from the founder’s’ family recipes, Carrabba’s uses the best ingredients to prepare fresh and handmade dishes cooked to order.


  1. Chef Specials –
    1. Carry-out family dinner bundle – A Budget-minded dinner will be a familiar option for family consumers that want quality food to take home.
    2. Amore Mondays
    3. Tasting Tuesday
    4. Pizza & Wine Wednesday – Customer can create a custom pizza and pair it with a unique wine.
  2. Appetizers & Small plates – Price Range –
    1. Appetizers7 options available
    2. Small Plates – 6 options available
  3. Soups and Salads – Price range –
    1. Soups3 options available
    2. Salads – 5 options available
    3. Combos
  4. Entrees – Price Range –
    1. Authentic homemade pasta Italian food with Mama Mandola’s family recipes
    2. Freshly flame grilled beef, pork, veal, chicken, and seafood style entrees.
    3. Custom made wood-fire pizzas
    4. Combinations
  5. Under 600 & and Gluten Free – Price Range –
    1. Under 600 – 31 options available
    2. Gluten Free – 35 options
  6. Desserts – Price Range –
    1. Sweet Italian Treats 5 options available
  7. Beverages – Price Range –
    1. Wine – Carrabba’s offers wine sourced from across the world and invite you to explore Carrabba’s selections that offer a variety of New World Familiarity, Old World Classics and Interesting Gem’s. Our wine list includes over 30 wines sold by the glass, so you can always find the perfect pairing to go alongside one of our made from scratch Italian favorites.
    2. Italian sangria & Cocktails – 10 options available
    3. Italian beers – 2-5 options available
    4. Cold Beverages –14-16 options available


  • Wood-Fire Grill: The wood-fire grill preparation infuses food with delicious flavor through natural burning wood, which perfectly complements Carrabba’s signature grill baste.
  • Freshness: Carrabba’s food quality is unmatched in the category. Dishes are made from scratch, in an open kitchen for the entire restaurant to see.
  • Sourcing: Carrabba’s sources its ingredients from all over the world, e.g. vinegars from the Modena region in Italy and ricotta salata from Sardinia, to ensure the most authentic and fresh flavors go into the dishes.
  • Nutrition: Approximately 31 dishes on the revamped menu are under 600 calories. Designed and managed by registered dieticians, Carrabba’s gluten-free menu offers 33 options, including a gluten-free pasta option.



Carrabba’s Italian Casual Dining Service

Front of house service that embodies Carrabba’s Italian Grill commitment to hospitality.

  • Prompt and attentive customer service
  • Management and staff members have clean and professional uniforms to distinguish themselves from customers
  • Professional mannered staff with energetic and positive attitudes
  • Ready to make menu recommendations and wine paring, if asked. No detail is ever too small to pay attention to when dining.
  • Escorting patrons to the table, holding the chair for women.


Offering Carry Out Service

  • Food is cooked to order and safely packaged for consumers to take home
  • Order is completed to customer satisfaction and completed after set specific time within 30 minutes


Carrabba’s Italian Casual Dining Atmosphere

Inside and Outside Restaurant Presentation

  • Scenic outside patio dining and seating.
  • Lighting will be subtle, leaning toward dim (romantic).
  • Music playing subtly in the background will reflect the theme, such as classical for a traditional fine dining restaurant


Exhibition Style Kitchen and Bar. – Ada Carrabba’s open kitchen atmosphere is where guests can see and smell fresh flavorful Italian dishes being prepared.

  • Ada Carrabba’s open kitchen atmosphere includes the Kitchen Counter, where guests can experience exhibition style cooking as dishes that are prepared right in front of them.
  • See and experience the process of preparing a handmade pizza and smell the wood-fire oven from the dining room.
  • Ada Carrabba’s modern bar design includes open bar seating, an elegant back wall display for customers to choose alcoholic beverages, and several community tables where friends can meet to enjoy favorite dishes and cocktails.

Modern Tableware and Furniture

  • Open family dining room tables that seat up 4 to 8 customers
  • Secluded section with dining tables for couples
  • Comfortable booths with seating for 4
  • Linen tablecloths
  • Fine china, wine glassware and flatware
  • Centerpiece Candlelight paired with authentic Olive oil bottles


Destination Attraction

  • A unique destination attraction will be a replica of a famous Italian wishing fountain.


Distribution Strategy


Business to Consumer Model – Exclusive Distribution.

Ada Carrabba’s chooses a direct-sales, channel because the business has access to the customer keeping all revenue under the control. Ada Carrabba’s will establish retail and online order purchase processes.


After analyzing consumer demographics in Kent County and West Michigan.  A restaurant location will be established at retail location in Ada Township’s business district. Covering Primary target demographics within a 10 mile radius.  Reasons for this decision are as follows.

  • Household median income in the Ada Township is $121,439 dollars
  • Percentage of the age population between the ages 25-65 in the area is over 50%.
  • The percentage of consumers with at least a bachelor’s degree is around 63%. This resonates with Carrabba’s sophisticated authentic Italian dining experience.

Ada Carrabba’s will implement a “Total cost of ownership” (“TCO”) approach that focuses on the initial purchase price, coupled with the cost structure underlying the procurement and order fulfillment process. The reason for that choice is:

  • The TCO approach includes monitoring commodity supplier markets and trends that execute product purchases at the most advantageous times.


 Price Strategy 

  • Ada Carrabba’s Italian Grill will seek to serve upper middle class families and the couples segment with a focus on matching expected and perceived brand value.
  • Moderately priced casual dining menu entrees are between $10-$30 dollars, featuring a mix of classics Italian American cuisines, individualized dishes with signature sauces, dips or other toppings cuisine.
  • Ada Carrabba’s Restaurant will use a Cost-plus pricing that includes all the overhead costs that are occurred when running a restaurant, including rent, wages for waitstaff and cooks. Utilities water, gas, and electricity to power the kitchen and dining room.
  • Profit includes wages for the owner, as well as the ability to conduct repairs on the restaurant and expand the restaurant, this percentage should be added onto the cost of any food item, leading to prices that pay for food and overhead costs, and result in a profit.


Management SupervisionAda Carrabba’s will be prepared when executing core turnaround initiatives that will stop loss of profits and more importantly, drive enterprise value through a robust and sustainable business platform.  Area Operating Partners and Restaurant Managing Partners will have completed a comprehensive training program that emphasizes Bloomin Brand operating strategy, procedures and standards.


Bloomin’ Brands Corporate Team – Services and structures Ada Carrabba’s supply chain organization and costs they are responsible for all food and operating supply purchases.  As well as a large percentage of purchases of field and corporate services.  This customized relationship enables Ada Carrabba’s staff managers to effectively manage and prioritize their supply chain. Keeping product prices moderate for consumers compared to competitors in the area.



Ada Carrabba’s will use a mixture of push and pull promotional methods to help maintain consumer interest and have brand relevance, each family promotion concept leverages limited-time offers that is featuring seasonal specials. A consistent create message to customers is “The Carrabba’s family sharing award winning Italian American cuisine”


Push Methods

  • Cooking Trade shows
  • Personal Selling by FOH
  • Search engine optimization

Pull Methods

  • Advertising
  • Branding
  • Content Marketing (Word of Mouth)
  • Sales promotion/ Discounts
  • Paid search advertising


Marketing Research/ Decision process


Local Test GroupsCarrabba’s can continuously evolve their product offerings to improve their efficiency and based on consumer trends and feedback.


Online and Text Message SurveysTracking consumer satisfaction data with online and mobile surveys after visit.


Collecting Online Analytic Data – Utilizing SEO webmaster tools with Google. Ada Carrabba’s can control spending on local SEO and Paid search advertising tactics with search engine websites.


Nielson Consumer Graphic Data– purchasing and using strategic tactics to better target our promotions to West Michigan consumers.


 Coordination with Business Functions


Franchising The Ada Carrabba’s will enter into a Bloomin’ Brands franchise agreements, the franchisees is required to pay an initial franchise fee and pay monthly royalties based on the percentage of gross restaurant sales (5.75%). Coordinating with Bloomin’ brands for supply distribution chain.  Initial franchise fees are $40,000 for U.S. franchisees


Local PartnershipWith Ada Township’s business district committee to coordinate with local businesses for local events.


Sales Forecast and Expense Budget


Selected Sales Data Following is sales mix by product type and average check per person for Company-owned restaurants during fiscal year 2015:


Figure 5.1

Selected Sales Data – 2015 U.S. Market Carrabba’s Italian Grill
Food and non-alcoholic beverages 85%
Alcoholic Beverages 15%
Average check per person ($USD) $21


Figure 5.2      

Cost of Sales Fiscal Year Fiscal Year
(Dollars in Millions) 2015 2014
Cost of sales $1,419.7 $1,435.4
% of Restaurant sales 32.6% 32 .5%

Cost of sales, consisting of food and beverage costs, increased slightly as a percentage of Restaurant sales in 2015 as compared to 2014.


Figure 5.3

Labor and Other Related Expenses Fiscal Year Fiscal Year
(Dollars in Millions) 2015 2014
Labor and Other Related $1,205.6 $1,219.0
% of Restaurant sales 27.7% 27.6%

Labor and other related expenses include all direct and indirect labor costs incurred in operations, including distribution expense to Restaurant Managing Partners, costs related to field deferred compensation plans, and other field incentive compensation expenses.


Figure 5.4

Other Restaurant Operating Expenses Fiscal Year Fiscal Year
(Dollars in Millions) 2015 2014
Other Restaurant Operating $1,006.8 $1,049.1
% of Restaurant sales 23.1% 23.8%

Other restaurant operating expenses include certain unit-level operating costs such as operating supplies, rent, repairs and maintenance, advertising expenses, utilities, pre-opening costs and other occupancy costs. A substantial portion of these expenses is fixed or indirectly variable.

Sales Forecast and Cash Flow


 Expense Budget   


Implementation Plan


Year 1


Quarter 1 – Staff Placement, begin promotional campaigns, and startup costs


Quarter 2 – Increase online and traditional promotional campaigns


Quarter 3 – Initiate measurements on promotional methods


Quarter 4 – Communicate promotional strategy with Bloomin’ Brands


Figure 3.2

Planned Promotion/advertising mediums

Expected Brand Improvement Cost ($) Target Date
Search Engine Marketing and

Online Advertising; customer reviews and online information:,, and Promoting happy hour and & chef specials
Social Media campaign with Facebook and Twitter. Promotions through loyalty program with mobile text messaging that will encourage customer engagement. Medium expenses because of promotional discounts
Mailers and regional print advertising: promotional discounts Awareness Campaigns Coupon, media placement and print costs 11/01/2017

Month before and continued after launch

Press Release – Describing the unique atmosphere and display attraction at Ada Carrabba’s Awareness and consumer interest TBD 10/07/2017

2 months before Grand Opening

Billboard Advertising  Campaign Awareness and consumer interest 10/01/2017

2 months before and maintain for 8 months after, then reevaluate.

 Grand Opening Special Event Attract the local community and nearby cities


Management Processes

  • Establishing information security, privacy, cashless payments, gift cards and consumer credit, protection and fraud.


Online Creative Content

SEO Creative Content Example: Figure 3.1


Wine and Dine at Carrabba’s


Red Wines


Cabernet Sauvignon:  is the name of both the grape and the wine it produces. The primary taste of this wine is blackcurrant, a sweet earthy taste unlike other berries. Fresh gooseberry and passionfruit flavour-aromas and hints of raspberry, combined with the floral aromatic notes of carnations and roses.

Cabernets are hearty and rich and thus go best with tomato-based red sauce and are terrific with steaks or chops—like lamb chops with frizzled herbs. The firm tannins in these wines refresh the palate after each bite of meat. BIG, BOLD, ROBUST.

  • Best paired with: Red Sauces


Carrabba’s Wine Selection

  • Beringer Founder’s Estate, Cal.
  • Dark Horse , California
  • Coppola Diamond, California
  • Lohr “Seven Oak”, California
  • Louis Martini, California
  • Sequoia Grove, Napa Valley, Cal.


Italian Chianti is a strong, bold red wine that is perfectly suited for flavorful, well-seasoned sauces. It pairs best with tomato-based red sauces, but will also work with cream- or oil-based sauces. CHERRIES, BERRIES AND SPICE.

  • Best paired with: Red Sauces Also: White Sauce and Oil-Based Sauces


Carrabba’s Wine Selection

  • Gabbiano Chianti, Tuscany
  • Santa Cristina Chianti Superiore, Tuscany


Merlot is not as harsh as other reds, merlot is mellow with flavors of plums, black cherry, violets, and orange. It is best paired with tomato-based red sauces.

  • Best paired with: Red Sauces


Carrabba’s Wine Selection

  • Ecco Domani, Italy
  • Robert Mondavi Private Selection, California
  • Markham, California


Pinot Noir is a light red wine with flavors that include earth, vanilla (from the oak), and jam. This versatile wine goes well with tomato-based red sauces, but will also work with cream- or oil-based sauces.  Recipes made with ingredients like mushrooms and truffles taste great with reds like Pinot Noir and Dolcetto, which are light-bodied but full of savory depth.

  • Best paired with: Red Sauces Also: White Sauce and Oil-Based Sauces


Carrabba’s Wine Selection

  • Mark West, California
  • Coppola Votre Santé, California
  • Elouan, Oregon


Sangiovese is a hefty red wine that goes wonderfully with spicy Italian dishes. Best paired with tomato-based red sauces, it will also work with cream- or oil-based sauces.

  • Best paired with: Red Sauces Also: White Sauce and Oil-Based Sauces


Zinfandel, is a deep red wine. Spicy and peppery, with a hint of berries or dark cherries, this wine goes best with thick, tomato-based red sauces.  The words rustic and rich describe Zinfandel. SMOOTH AND VELVETY.

  • Best paired with: Red Sauces


Carrabba’s Wine Selection

  • Joel Gott Zinfandel, California


White Wines


Chardonnay white wine can taste semi-sweet or sour, heady or light. Typical flavors are apple, tangerine, lemon, lime, melon, and oak. Like most white wines, it is best paired with cream- or oil-based sauces, considered to be delicious with fish like salmon or any kind of seafood in a lush white sauce.  Can also be served with a light, tomato-based red sauce. CITRUS, APPLES, OAK.

  • Best paired with: White Sauce and Oil-Based Sauces Also: Red Sauces


Carrabba’s Wine Selection

  • William Hill, California
  • Kendall-Jackson, California
  • Decoy by Duckhorn, Sonoma County, California
  • Franciscan Cuvée Sauvage, Napa Valley, California


Pinot Grigio are actually the same white grape, with two different names: In Italy and California this wine is known as Pinot Grigio.  Light seafood dishes, like seafood tostada bites, seem to take on more flavor when matched with equally delicate white wines, such as Pinot Grigio or Arneis from Italy This wine is best paired with cream- or oil-based sauces, but can hold its own with tomato-based red sauces, as well. DRY AND DELICATE

  • Best paired with: White Sauce and Oil-Based Sauces Also: Red Sauces


Carrabba’s Wine Selection

  • Ecco Domani Pinot Grigio, Italy
  • Chloe Pinot Grigio, Italy
  • Santa Margherita Pinot Grigio, Italy


Sauvignon Blanc wine often tastes of grass and apple, and has a soft, smoky flavor. Sauvignon Blancs tend to be crisp and acidic, which make them a nice match for cream- or oil-based sauces. Goes well with tart dressings and sauces.  ZESTY, AROMATIC, FRESH.

  • Best paired with: White Sauce and Oil-Based Sauces


Carrabba’s Wine Selection

  • Riondo Prosecco, Italy
  • Noble Vines 242, California
  • Kim Crawford, Marlborough, New Zealand


Measurement Methods

Key measures that we use in evaluating our restaurants and assessing our business include the following.

  • Average restaurant unit volumes —average sales per restaurant to measure changes in consumer traffic, pricing and development of the brand
  • Comparable restaurant sales —year-over-year comparison of sales volumes for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants;
  • System-wide sales —total restaurant sales volume for all Company-owned, franchise and unconsolidated joint venture restaurants, regardless of ownership, to interpret the overall health of our brands
  • Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income, Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance, which definitions, usefulness and reconciliations are described in more detail in the “Non-GAAP Financial Measures” section below; and
  • Consumer satisfaction scores —measurement of our consumers’ experiences in a variety of key product and service areas.


Required Staff


Job Title Quantity Expected staff turnover Skills necessary Date required
Restaurant Manager 1 * Prior restaurant experience and Bloomin Brand manager course 01/15/2018
Kitchen Manager 2 * Prior restaurant experience and Bloomin Brand manager 01/15/2018
Assistant Kitchen Manager 2 * ** 09/01/2018
Line/Prep Cook 10 * ** 09/01/2018
Information technology Support 2 * ** 09/01/2018
Bartender 4 * ** 09/01/2018
Servers 10 Every year ** 09/01/2018
Hostesses 4 Every year ** 09/01/2018
Busser/Dishwasher 6 * ** 09/01/2018
Human resources 1 * ** 09/01/2018


  • *- These positions do not have high turnover rate. Most of Carrabba’s employees are loyal to the business.
  • **- No skills required.


Recruitment Options 

 All manager positions are on a 3 year contract, which is done through a management program. All hourly positions are employed from Carrabba’s website at https//  These positions are as followed: host, bartender, server, head waiter server, assistant kitchen manager, line cook, and carry out services, trainer, dishwasher, and busser.  The human Resource Manager does all hiring and firing with the approval of the restaurant manager.


Training Programs

 All employees will receive in-house training consisting of a three day training session in that position.  During training sessions, employees are taught all of the needed skills for that position.  Once the training session is completed, employees enter a two-day shadow program, where they are expected to perform all duties next to trainer for that position.

Retaining employees is a critical piece that is often overlooked and can provide much needed consistency and stability for concepts that are in a turnaround phase.






Case Study Apple Inc. 2015 


This case study will include an overview of Apple’s past, present, and future market position in computer hardware, software, smartphones, and digital content.  The case study focuses on Apple’s strong market presence in high-end electronics and their leadership role in the computer and communication industry.

Analysts wondered what would happen to Apple with Steve Jobs gone.  Despite their success, some observers worried that Apple had become overly dependent on iPhone sales and pondered how long Apple would sustain its growth without the introduction of truly innovative new product.  CEO Tim Cook claims that Apple watch, Apple Pay, Apple TV, and corporate customers were big growth areas for the company.  Cook confidently exclaimed that Apple’s product “pipeline” was the strongest he had ever seen.  With a high rate of innovation and emphasis on excellence in product design, Apple succeeds with its relatively high selling prices.  This position indicates Apple’s effectiveness in using its generic strategy and intensive growth strategy.

However, Apple’s current market position has investors concerned because of Apple’s no growth in revenue and declining sales. With the smartphone market maturing and Apple still looking for its next big thing, Apple needed a new product segment to boost company profits. Apple’s new CEO Tim Cook took the company into the wearable technology market.  Cook aimed high for new product success but entering a market that was already in competition was not to Apple’s strength to gain success. It’s clear they are losing innovation in the electronic and becoming dependent on past products.  Consumers and investors were disappointed in overall unit sales after the introduction of Apple’s new product the Apple Watch.

Depending on the industry segment, Apple’s competitors include Samsung, Amazon, Microsoft and Google. Throughout most of 2013 and as of 2014, Apple’s main competitor in the smartphone market is Samsung’s line of Android-powered phones. Another competitor is Google who developed the Android software and is a major competitor of Apple in the smartphone operating system market.


Economic Positives

  1. In the final quarter of 2014 Apple posted record profits of $18 Billion, the largest quarterly profits in corporate history. Spurred by the release of the iPhone 6 and sales were strong in China.
  2. Apple’s iPhone accounted for 69% of its revenue.
  3. Apple generated $10.2 billion in revenues from the sale of music, book, videos, and applications. Over time Apple also paid out more than $25 billion to developers for the 75 billion apps downloaded to iPhones, iPods, and iPads.
  4. Apple generated more than 60% of the cell-phone industry’s total profits in 2013. With only 8.3% unit market share.


  1. In 2008 iPod sales start to decline.
  2. iTunes store experienced a decline as much as 13% in the first half of 2014. And in response launched iTunes radio an ad supported streaming service.
  3. Ipod sales have been falling for 7 straight years and iPad had suffered a significant decline in sales, down 22% from Q4 in 2013.
  4. Personal Computer’s sales have been slowly declining as market saturation increases. However, Apple has a large market share in the over $1000 Pricing segments for consumers and it has been a strong factor to their success. Also, after industry innovations in featured based approaches a PC’s life expectancy has been increasing and therefore creating longer gaps of purchases for consumers.

Social Culture Positives

  1. Apple is a well trusted computer technology brand in the market. After 2001 when the Mac iOS X was introduced it was perceived as an industrial-strength OS favored by computer professionals.
  2. Apple doesn’t have to buy users it already has over 750 million, and those users have all paid to use Apple’s product; $650 per person to get a new iPhone.
  3. Apple’s digital hub strategy debut was with the iPod in 2001, follow by the iPhone in 2007, then iPad in 2010. Integrating Apple’s iTunes desktop software and music store completed their vision for an online entertainment hub. 2003 Windows PC compatible.
  4. July 2008 the App store was an addition to Apple’s digital hub. The app store was the first outlet that made it easy to distribute, access, and download applications directly into the iPhone. By the end of 2014, over 1.4 million applications were available.

Social Negatives

  1. Online music stores, Napster, and and challenges from a variety of online music of online music streaming services, such as Pandora, Spotify radio, Rhapsody. In some markets, music labels made more money from spotify than iTunes.
  2. Apple not only wanted consumers to directly look at the eye-catching Macintosh designs, but also wanted people to use and experience Apple’s software inside their retail stores and it account for 12% of their sales.

Legal Positives

  1. By 2014 Apple won two large judgements against Samsung in U.S Courts.
  2. By April 2012 , Amazon’s market share in e-books had fallen to 60% because of Apple’s push into the e-book market content.

Legal Negatives

  1. Intense competition in the smartphone industries led to numerous lawsuits on design and intellectual property which creates a patent wars.
  2. The court ruled that Apple’s pricing strategy for digital books had in fact colluded with five publisher to raise prices, and in late 2014, agreed to pay %400 million in damages.

Rivalry among Existing Competitors

  • Apple’s direct competition in the smartphone software market comes from Android, an open and free platform developed by Google and Windows from Microsoft Corp. As more manufacturers entered the market, innovation on the Android platform exploded.
  • In 2014 Android-based phones controlled 81% of market share compared to Apple’s 15%. The share for Apple’s iOS fell gradually with the growth of Android, from its peak of nearly 19%.
  • After Google announced “AndroidWear” in 2014, extending the Android platform to watches, LG, Motorola, and Samsung subsequently introduced watches based on the software platform.

Threat of New Entrants

  • Among headset manufacturers, Samsung Corp. was Apple’s most direct competitor. Samsung is a huge company that make chips, PC’s, TVs, and appliances as well as phones.  Samsung became a volume leader in 2011 with the introduction of its Android-based Galaxy handset and remained the market leader in 2014 with 24.5% share.
  • Lenovo had emerged as the third largest player in the smartphone industry holding 7.4% of the handset industry
  • A new player from China called Xiaomi, which brought it first smartphone to the market in 2011 and entering into 2015, it had cracked the top five in smartphone sales.

Threat of Substitute Products

  • In a broad sense, all firms in an industry compete with industry producing substitute product. For Apple they cover a broad range of computer electronic products leaving them subject to a wide range of product substitutes. But for the smartphone industry its substitute would be the personal computer and iPads.

Bargaining Power of Suppliers

  • The supplier that captured most of the value in smartphones was Qualcomm, which largely controlled the two most important protocols for wireless service.
  • Three companies dominated the ARM CPU business in smartphones in 2014. Qualcomm had about 54%, Apple roughly 15%, and MediaTek from Taiwan had just under 14%.  Jobs bought two ARM microprocessor design companies for $400 million between 2008 and 2010.

Bargaining Power of Buyers

  • Apple has a lot of buyers in the market ranging from Corporate suppliers to retail consumers.
  • Apple has a high end pricing model but it focuses on key features that differentiate the company and its products from competitors. They do not use pricing but instead these key features including seamless connectivity, and cutting edge aesthetics in design.

Identifying and describing the root cause

The Case study focuses on Apple’s stagnations of their revenue streams in the software, smartphone, personal computers, and digital content markets.  Apples has always been a leader in innovation when it comes to computer technology but industry competitors are copying Apple’s industry standards.


  • A clear problem for Apple is Android delivering fast and fresh ideas at a regular clip, putting Apple’s iOS on the defensive and causing its critics to complain that Apple’s platform was looking dated and old. Several products in Apple are starting to loose their revenue stream because of competition from companies like Samsung, Amazon, and Google are developing similar products at lower costs in the market.


  • In 2014, the Apple Watch, Apple’s entry into the wearable technology. Apple was not the first in the category, but it was expected to be the largest.  The Apple Watch had to be charged every day, it only worked with iPhones, and it was expensive.  Prices started at $349 for the basic model.  Moreover there was already significant competition in the market offering a similar product at lower costs.  Competitor Pebbles sold for $150.

SWOT Analysis


  • Apple’s vertical integration gives them a competitive advantage because it allows them to innovate in software, hardware, and services. It owns chip manufactures, controls manufacturing, follows extremely strict software standards, and operates in a nearly closed ecosystem of retail stores to control their costs.
  • Apple’s development environment is superior to the competition because they can predict what customers want in the market. Productivity applications with their user interface was designed with simplicity in mind.


  • With the loss of CEO and founder Steve Jobs stakeholders company has big expectations even with aftermarket adaptations by Google, It’s clear that Apple no longer has total control of their critical technology that would drive Apple’s differentiation in the market.
  • There is a crowded field of cross-platform alternatives to Apple’s offerings: Microsoft’s  Skype, Facebook WhatsApp, and a variety of other third party tools, resulting in a lot of apps with overlapping functionally.


  • Apple announced a partnership with IBM to design enterprise app enlisting IBM’s sales force and business connections to sell apple mobile devices to enterprise customers. CEO Tim Cook pointed out, iPhones and iPads were present in 90% of Fortune 500, but rate of participation was low, providing Apple with an opportunity to advance mobility in the enterprise.
  • Samsung has had recent trouble with their Note and Galaxy handset product lines. Their batteries have been overheating and in some cases exploding causing harm to users.


  • Apple had at least three potential serious competitors for tablet: (1) manufacturers using Google’s version of Android software; (2) Amazon, which used a modified version of Android; and (3) Microsoft Windows-based tablets, and by the end of 2014 Android had capture 70% share.
  • Currently, Google, Microsoft, and Amazon have entered the fray by setting up their own ecosystem, including devices, books, games, music, and storage services.


Analysis and Decision Making

Strategic decision making is an ongoing process that involves crafting strategies to achieve goals and altering strategies based on reviewed outcomes.  Apple’s goal is to increase their revenue stream in the smartphone industry.

Generating alternatives

  1. Leverage their current strength, Apple should focus on their premium smartphone brand, the iPhone.
  2. Continue to improve and innovate the Apple Watch.
  3. Increase their research and development spending.
  4. Focus on improving digital media content in China.

Evaluating alternatives

#1 – Leverage their current strength, Apple should focus on their premium smartphone brand, the iPhone.

  • By focusing on customers willing to pay more and maintaining a premium price at the cost of unit volume, Apple sets up an artificial entry to barrier to competitors.
  • Taking into account that premium smartphones are the minority in global smartphone sales by volume, they provide the bulk of profit. Each iPhone Apple makes costs somewhere around $200, and is sold for over $600. The profit margins are far better for premium smartphones than nearly any other segment of electronics.  That is why it is significant for Apple to widen its gap against competitors like Samsung.
  • Apple must perform two tasks. (1) Apple needs to continue to improve their iOS software for users.  Creating new tools and interface features for every iPhone launch. (2) Apple’s must ensure proper vetting and marketing messages when introducing new iOS software into their products.

#2 Continue to improve and innovate the Apple Watch

  • Becoming selective in what products to improve is very tough. I feel that Apple has established a presence in the wearable technology which a huge market to consider.  The Apple Watch product is designed to become an intricate part in people’s daily lives.  This is a new product category for Apple and I consider them to still be in the learning stages of the product life cycle.  Apple should push the product into the realm of consumers to feel that they cannot live without this product because it’s doing so much for them and then it will continue to be adopted by consumers.
  • Apple Watch will continue to be a flop until they can establish a 4G connection and make it a stand alone device.

#3 Increase research and development spending 

  • Compared with its resources Apple has remained relatively quiet It spent just 3.5 percent ($8.1 billion) of its $233 billion in revenue in fiscal 2015 on research and development, a lower percentage than every other large U.S. technology company, data compiled by Bloomberg.
  • Under CEO Tim Cook, Apple leans heavily on advances made by suppliers, focusing on crucial technology such as semiconductors, according to Ram Mudambi, a business school professor at Temple University in Philadelphia.
  • Apple can’t rely on its suppliers for everything. Expanded research outlays significantly over the next three years, to $8.1 billion in fiscal 2015, up from $6 billion in 2014 and $4.5 billion in 2013. This would display to investors its commitment to innovate and evolve new technology that enhances and expands its existing product range.

#4 Focus on improving digital media content access in China

  • Apple must not abandon the Chinese market because of its lack of market share. The volume of sales alone justifies Apple’s presence in the smartphone market.
  • The company must reestablish its iBooks and iTunes Movies services in the country. Earlier in 2014 after less than seven months of operation following pressure from regulators Apple was asked to shut down their online market presence, which is a problem.

Action Planning

Goal: Increase growth in revenue stream and look for opportunities in new product development.

Action Step Responsible Person Deadline Necessary Resources Potential Challenges Results
#1) Improving iOS software for iPhone. Software Engineers and Marketing department Within 6 -12 months Advancements in suppliers and advancement in software tools.   Intellectual property protection Lack of consumers adopting the new software Looking consumer adoption in the smartphone industry
#2) Invest more in Research and Development to extend product lines. CEO, CFO, and chief engineers and design firms. Within 3-6 months Using capital funds to absorb competing firms. And reinfusing revenue into R&D No breakthrough in new product category development New product to market.



Lifetime value of the customer – Revenue x Gross margin x Avg number of repeat purchases.

Cost of customer Acquisition – Total marketing investment x total number of customer acquired.

Sales Growth – Measuring your sales growth is, however, vital to the long-term health of your company. Not only does it serve as a good indicator when it comes to strategic planning, but it also allows for identification of growth trends and share this information with employees.


Cooks thoughts echoed those of his predecessor, Steve Jobs, whose strategy for Apple had four pillars. Offer a small number of products, focus on the high end, give priority to profits over market share, and create a halo effect that makes people starve for new Apple products.

Steve Jobs, Apple’s former CEO and Founder created a trusted company brand when it comes to personal computer technology.  Jobs inspired Apple’s management to become a cultural force with the focus on what consumers in the electronics industry wanted.  Apple’s marketing helped associate the band to be perceived as a product of personalization. Phrases like “Think Differently” inspired creativity within their users because their product could create documents, personalized music playlists, and Apple included several different colors and data storage sizes that worked around the user’s budget.  A study by GfK in 2011 “showed that over 70% of consumers felt features and seamless access to content are major factors for continuing with their current mobile OS This allowed Apple’s iPhone product to become cultural industry standard with their consumers when it comes to communicate, create documents, playing games, and getting online.

We can learn so much from Apple’s marketing strategy because they staked their claim, amplified their messages, and impacted the world for the better. Apple’s marketing and branding strategy had the ability to invoke an internal response from their tech savvy consumers with their marketing messages. Steve Jobs knew that for a business’s product to be “remembered” there must be a clear message for them to remember and identify with. With Apple’s 2007 launch of the iPhone they “Reinvented the phone” by integrating software breakthrough with the design of the user user in mind.  Apple was a pioneer in the personal computer and electronic industry they told their consumers that creativity was at their fingertips.