California Pizza Kitchen: Internal Analysis and SWOT Analysis

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CPK Internal Analysis and SWOT Analysis

Complete an internal analysis for California Pizza Kitchen, using an RBV Framework that will provide evidence for your assessment of the organization's strengths and weaknesses. Complete a SWOT analysis. Limit your analysis to the identification and evaluation of one or two key items in each element of the model.

Step One: Determine the economic value of the California Pizza Kitchen. This may involve some assumptions as to the cost of capital, so be clear in what assumptions you are making.
The formulae used for economic value of California Pizza Kitchen is:
EVA = NOPAT - c.K
Where, EVA is the economic value of California Pizza Kitchen; c is the weighted average Cost of Capital and K is capital employed.
K is calculated as follows: Fixed assets plus current assets minus current liabilities.
In case of California Pizza Kitchen the assumptions are:
NOPAT = Net Income from Continuing Operations $4.581 million. Capital Employed Calculation: Total assets $350. 258 million less current liabilities $89.377 million = $260.881 million.
We assume that the cost of capital is 2%.
Then, EVA = $4.581million minus 2% of $260.881 million.
or EVA = $4.581 million minus $5.2176 million = minus 0.63662 million.
A negative economic value means that accounting profit of CPK is inadequate to compensate the equity capital at its required rate of return. This means that if CPK continues with a negative economic value it will be shunned by investors.

Step Two: Using the sources you identified, collect some data on each of the tangible and intangible resources of the organization.
Tangible Resources:
230 locations in the US and other countries;
More than 14,000 well trained employees:
Assets of more than $350 million;
Intangible Resources:
The reputation of California Pizza Kitchen;
The ability to serve gourmet pizza in its locations:
Impressive menu that it can support: The skills required for serving this menu:

Step Three: Using the sources you identified, collect some data on each of the 3 capabilities.
1. The technical and skills available for serving innovative nontraditional pizzas;
2. The highly skilled personnel that can serve pizza as well as develop new pizza;
3. The ability to set up new locations and kiosks of California Pizza Kitchen;

Step Four: Discuss the results of your internal analysis, leading to conclusions about the strengths and weaknesses ...