Bjs Restaurant Brewery Group Project Marketing Essay

Introduction

For 32 years BJs Restaurants and Brewhouses have expanded from one small Chicago style pizzeria to over ninety-two chain foodservice establishments. Over these years, Paul Motenko and Jerry Hennessy, the company’s duel owners, have expanded the company’s concept from a small family owned restaurant to a full service casual dining restaurant. Today BJ’s Restaurant and Brewhouse has more that 100 menu items including appetizers, specialty salads, soups, pastas, sandwiches, entrees and desserts. (www.bjsbrewhouse.com)

Over ten years ago, in 1996, BJ’s introduced their hand crafted homebrewed beers into the mix adding a unique and lucrative spin on the concept while further distinguishing themselves from other competitive restaurants in their segment market. BJ’s restaurant further went on to fully engulf themselves in this new concept by changing their name from BJ’s Restaurant to BJ’s Brewhouse and BJ’s Restaurant and Brewery. Since then BJ’s has been recognized by many different brewing associations and competitions by earning medals and high remarks. To fully submerge themselves in this new beer market BJ’s has opened several microbreweries, which help produce and distribute BJ’s hand crafted beers throughout their restaurants.

Throughout the years that BJ’s has been in business they have gone through and successfully accomplished many of their strategic directions. They have over taken several objectives including transitioning BJ’s Restaurant concept to a “premium casual” or sometimes called “casual plus” sit down dining experience. Also, BJ’s general net revenues tend to increase about twenty to forty percent each year which is a great entity for their current share and stockholders and will help new investors choose BJ’s over other players in their business segment.

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Because of a result of the failing economy, recent mass foreclosures and rising interest rates and gasoline prices another one of BJ’s Restaurants strategic directions has somewhat skewed their goals to be more of a higher quality, more “approachable” casual dining restaurant. They believe that the main stream customers are now more likely to cut back on their participation in more of the mediocre “mass market” casual dining and change their dining behaviors to more of a higher quality concept that will offer a better overall dining experience and also better value for their money.

Today “BJ’s Restaurant and Brew house current strategic direction is to have a passionate desire to provide extraordinary value for their guests in a high-energy, fun, child-friendly environment, along with a sincere commitment to support the communities in which they do business goes to the heart of what differentiates BJ’s from other restaurants. They are committed to ethical business practices and strong corporate governance standards. The Board of Directors and management believe sound corporate governance principles are important to ensure that the Company is managed for the long term benefit of its key stakeholders – investors, guests and employees.” (www.bjsbrewhouse.com)

Along with BJ’s current strategic direction the company strives to differentiate themselves by being a huge cash donor to many different philanthropic organizations and charities. For example BJ’s “Cookies 4 Kids” program has raised millions for the Cystic Fibrosis Foundation by donating a portion of all “Pizookies”, a fresh baked cookie of choice served with two scoops of cold ice cream, to this great cause. This year round fundraising event strives to help BJ’s by showing their customers and investors how much they care for their community and by creating a strong competitive advantage over other similar markets.

BJ’s’ Environmental Analysis

Restaurant industry Analysis: Figure 1-1 The food dollar Source: National Restauramt Association Inc.

The restaurant industry is a competitive one, every year thousand of restaurants open and close. But lifestyle changes, demographics, and trends continue to fuel its steady growth. More and more people have less time, resources, and ability to cook for themselves. The average American spends 15% of his/her income on meals away from home. People are eating out more because of convenience, making the industry sky rocket. According to the National Restaurant Association “the industry’s sales are expected to reach $580 billion in 2010 over 2009 sale” (Figure 1.2). Even though the industry has been hit hard these past two years, Dawn Sweeney, President and CEO of the National Restaurant Association, supports the industry by stating, “With a total economic impact of more than $1.5 trillion, the restaurant industry is a strong player in the economic recovery. Restaurants are the cornerstone of communities across this nation and we are a key player in propelling job retention and creation across the United States. Despite the losses the industry has outperformed the national economy, expecting job growth in 2010.”

The restaurant-and-foodservice industry still remains one of the nation’s largest employers. Today almost one in 10 working Americans work in restaurants, employing nearly 13 million people and expected to grow further by 2020. There are still challenges that the industry continues to face such as future economic recessions, competition, maintaining sales volume, recruiting and retaining employees, and labor costs. Therefore restaurants will continue to keep their eye on new consumer and menu trends to stay in competition since socioeconomic trends and demographic changes have a great impact.

Figure 1.2 Restaurant industry’s sales

BJ’s Broad Environment Analysis:

Sociocultural influences on BJ’s restaurant have grown as the restaurant industry compete and become sensitive to consumers wants. Society expects money making business to give something back to it. Besides monitory contributions BJ’s has created a foundation that helps out the community where they do business in. As stated in their BJ’s foundation page, “The BJ’s Restaurants Foundation is a non-profit organization dedicated to support charities benefiting children’s healthcare and education, with primary focus on the Cystic Fibrosis Foundation. In addition, [their] Foundation recognizes and rewards the volunteer efforts of BJ’s Restaurants team members across the country as they help to give back to the communities in which our restaurants do business.” In 2009 BJ’s received the Restaurant Neighbor award given by the National restaurant Association because of BJ’s continuous contributions to the communities; some examples are: “BJ’s TASC Force program has helped to fulfill the wishes of special needs kids, placed flags in a national cemetery by the graves of fallen soldiers, painted over unsightly graffiti and helped clean up beaches, parks and school grounds. In addition, have hosted blood drives, worked with Special Olympics, painted houses for elderly citizens, supported Habitat for Humanity and re-built playgrounds. [Their] teams have also worked at food banks, participated in fundraising runs and walkathons and delivered food to families in need on Christmas morning.” All this is possible by the TASC team members who work and donate their personal time for such causes. They claim to do it “because it is the right thing to do and inevitably come away as better individuals and more responsible citizens.” Many other charities are benefitted through the work of BJ’s TASC team.

BJ’s keeps thinking of new ways to raise money and society awareness BJ’s also makes charitable contribution from new restaurant opening to the Cystic Fibrosis Foundation. Fundraising events are also supported by BJ’s restaurants. One of BJ’s “major fundraising events directly benefiting the Foundation is a yearly charity golf tournament”. BJ’s Foundation page states that “All proceeds from the tournament go to the foundation which then disperses funds throughout the year to designated charities defined by [their] mission statement.”  This year’s tournament will take place on Monday, June 7, 2010 at Dove Canyon Country Club in Orange County. Other programs such as the Cookie 4 Kids have raised millions. The program donates portion of all Pizookie dessert sales to the Cystic Fibrosis Foundation. BJ’s “Signature Pizookie is a fresh baked cookie [topped] with two scoops of vanilla bean ice cream and served hot, and cold, a favorite for thousands of BJ’s guests making it a wonderful fundraising campaign for their charity.” It is a goal for BJ’s to continue to be a good corporate citizen to satisfy society needs. Through any way possible, as you can see, BJ’s focuses greatly in contributing to its community. And since customers may view BJ’s as an unselfish corporation this could be a value added to the name of the company. It may also be a competitive advantage against competitors whose major focus is making money for themselves and its investors.

Besides the sociocultural influences, BJ’s has adjusted to the technological innovations that are becoming more and more popular in the industry. The Idea of Online ordering is a new one and BJ’s is not staying behind. They are currently doing online ordering which is easy and convenient. You find the location nearest you by typing in your zip code, click on the online order link and place your order, and last but not least pick it up inside or curbside, delivered right to your car.

Technology for BJ’s doesn’t stop there one of the challenges for restaurants is training employees so one of the first things a new server at a BJ’s Restaurant & Brewery does is put on a headset and spend a few minutes in front of a POS monitor, working through an interactive video training module. Then the trainer reviews and demonstrates the tasks and works with new hire in a live session. This combination of high-tech and high-touch training has helped BJ’s Restaurants Inc. control turnover among its 4,000 employees and reinforces its ranks in anticipation of growth. BJ’s has also adopted technology through its décor. Flat panel televisions are displayed throughout their restaurants, making it a fun and entertaining environment for the customers.

Even though the economic downturn did not have a big impact on BJ’s restaurant, they have come up with new ways of maintaining and attracting its customers. On March 2, 2010 the companywide updated its menu offerings. It includes the introduction of a new BJ’s “Snacks and Small Bites” menu category, along with five new lunch specials. These menu creations are big in flavor and small on price, yet still delivering the good value BJ’s’ guest expect. This was done to give guest the opportunity to try something new at a good value. BJ’s new “Snacks and Small Bites” ranges from $2.95 – $3.95 that can be eaten as an appetizer or added to your entrée. Through such promotion BJ’s tries to reach customers who are afraid of spending too much money. Yet some of the threats BJ’s may face may be changes in consumer spending trends for casual dining occasions. For example trends change to quick service or fine dining. If that was the case restaurants like BJ’s would suffer a big loss, but since there is big industry for casual diners it is very unlikely for that to happen.

Examination of Key External Stakeholders:

Key external stakeholders include supplier and customers, maintaining a good relationship with its suppliers is crucial for BJ’s Success. An annual award is presented by BJ’s to its biggest quality product contributors. Supplier partner awards for the year 2009 are Jacmar Foodservice Distribution, Nestle USA, Fresh Point Inc. and R&R Advertising. The award is give to the most significant contributors for the quality, differentiation and value that BJ’s restaurant concept requires to give the consumer. Some of the threats BJ’s may face as stated in their forward looking statement is, “the [variable] commodity costs and availability of food in general and certain raw materials related to the brewing of their handcrafted beers and energy.” Nevertheless such threats are present for most restaurants in general.

Customers are also a very important external stakeholder whose feedback is appreciated. Attracting customers is a goal for all businesses but for BJ’s as their BJ’s Gold Standard of Operational Excellence states it is, “[their] genuine commitment is to take pride in passionately connecting with every guest, on every visit, through flawless and relentless execution of every detail during every shift – to create and keep fanatical fans of BJ’s concept and brand.” The company does not only want to attract customers but keep them so they become fans of dining experience at BJ’s. Given that customers and sales are strongly correlated, the objective of the industry is to maintain both. The loss of consumers means a loss in sales as well therefore customers are affected and can affect BJ’s success.

Organizational Resource Analysis

BJ’s has always had a desire to provide extraordinary value for their guests. They strive on providing excellent food with great customer service. They not only strive to live up to the expectations of their guests but they work hard to provide a high energy, fun loving, child friendly environment.

They also try and support their communities with full commitment so everyone involved understands that BJ’s is different from other restaurants and is concerned for their stakeholders. As BJ’s definition states that “to be the very definition of WOW for the casual dining experience” but BJ’s also strives to WOW not only with their dining experience but also with their customer service and quality of food.

Their promise is to be the best and never to compromise! They take immense pride in what they do. They take pride in passionately connecting with every guest so they understand what the customer actually wants so they can provide them with the utmost care and attention.

“We are excited to introduce additional menu creations that are big on flavor and small on price, and that deliver the high quality and good value that our guests have come to expect from BJ’s,” said Matt Hood, BJ’s Chief Marketing Officer. “By expanding our popular lunch specials, we are giving our guests the opportunity to try something new at a good value. Our new ‘Snacks and Small Bites’ menu category offers outstanding value and portion sizes that are perfect as individual appetizers or as additions to a favorite entree.” (www.bjsbrewhouse.com)

BJ’s financial situation has also been improving. According to BJ’s official website, Total revenues for the fourth quarter of fiscal 2009 increased approximately 13.5% to $112.6 million compared to $99.3 million for the same quarter last year. Comparable restaurant sales such as “The Cheesecake factory” decreased by 0.2% during the fourth quarter of fiscal 2009 compared to a decrease of 0.7% during the same quarter last year. Net income and diluted net income per share for the fourth quarter of fiscal 2009 were $1.7 million and $0.06, respectively.

Jerry Deitchle is the Chairman and CEO of BJ’s brew house. He is a CEO who is very concerned and involved with his company. His leadership and management style has led to BJ’s financial performance which has been very successful.

With the nature of today’s economy and it’s continuing pressure on consumer spending for restaurant occasions BJ’s reported profits for the financial year of 2009 and this is largely because of Jerry Deitchle’s performance as CEO. BJ’s popularity is a solid testament to how strong their performance has been over the years. Casual dining customers are preferring BJ’s style over competitors such as the Cheesecake factory and Chilli’s.

Another reason for BJ’s success is the ease of approachability and the ability to consistently and correctly execute the routine within the four walls of the restaurant. That includes front of the house, back of the house, chefs, servers, cooks, bus boys, managers, etc.

This is a statement the CEO made at a recent press conference where he talks about the impact of the economy on consumer spending for 2010. “While we do not expect consumer spending for restaurant occasions to significantly recover during 2010, we remain confident in BJ’s ability to gain market share in the estimated $80 billion casual dining segment,” said Deitchle.

“Our 2010 new restaurant development pipeline is in excellent shape as of today, and we are already working on potential locations for 2011 openings. Additionally, we will continue to make prudent investments in the ‘core’ of the BJ’s concept to further strengthen its competitive advantages of quality, differentiation and value for the casual dining consumer.”(www.bjsbrewhouse.com)

The company has been advancing since it has started. BJ’s has excelled in customer service and in quality of food. BJ’s strengths has been it’s phenomenal attention to customer’s needs while at the same time providing them with great tasting food and a huge variety of self brewed beers. The variety of beers has definitely been BJ’s great strength over the years as competitors such as “The Cheesecake Factory” only have company brews. They also have great happy hour deals which other restaurants do not.

BJ’s weakness is hard to define as they don’t have many. They have been very successful as they have grasped on to the essential elements of great food along with great customer service. The only weakness they probably have is that there menu is not as extensive as compared to the cheesecake factory. They have a very good continental cuisine but they lack variety of ethnic foods. But they are working on that. It is also hard to spot a weakness for this institution as they have doubled profits and plan on investing more into the company.

Future Strategic Direction

The future strategic plan of BJ’s Restaurant Group is to expand globally, and ultimately sell their beers to public from grocery, liquor, or beverage Distribution Company’s instead of only offering them in restaurant.

Internal Analysis: BJ’s has the resources to produce beer that so many people enjoy while dining at BJ’s Restaurants Brewhouse. Diversifying their business to provide a line of beer sold in stores is a great opportunity for the company. The company already operates several microbreweries, which produce and distribute BJ’s hard crafted beers within the chain, so promoting it to other distributors and stores would be the next step for them to branch out. Some of their first place award winning beers include, BJ’s Brewhouse Blonde , “A light and refreshing pale beer in the style of a German Kolsch. Slightly malty with delicate hopping to balance. Bottom-fermented and well-conditioned for exceptional smoothness.” and Harvest Hefeweizen, “Not just another wheat beer [it is] fermented with authentic Bavarian weizen yeast to produce its unique flavor profile – fruity, spicy, and refreshing.” These beers would make great candidates for distribution, resulting in greater revenue for the company and job enlargement for current and future employees. Since it would be a big expense for other restaurants to make and sell their own beer if they don’t already do; it gives BJ’s a sustainable competitive advantage. Competition would most likely arise from current beer companies whose brands have been sold in stores for year and are widely known by consumers.

External Analysis

Distributing BJ’s beer and Expanding BJ’s globally would also greatly increase sales and brand recognition. Some of the benefits in choosing to expand globally can be the extra resources available for the company’s operation, cheaper labor, and the economies of scale access to more customers and markets. However it may also tempt BJ’s to import beer to the United States instead of making it there since resources and labor would be a lot cheaper in other countries. Exploiting other countries resources might be viewed as unethical by consumers and investors, leading to decrease in consumer loyalty. BJ’s needs to be careful in not taking away the quality it currently provides to its own country by commoditizing their brand.

Besides the threats of expanding an advantage BJ’s has is the new trend for microbrewery beer. Microbreweries are limited to small batches of hand-crafted beer resulting in enhanced taste. Due to this trend people are willing to pay more for better beer such as New Belgium beer brands. Some examples of the most popular microbrewery and future competitors in the U.S. for BJ’s include: Anchor brewing Company (San Francisco, CA), Full Sail Brewing Company (Hood River, OR), Real Ale Brewing Company (Texas), and Stone Brewing Company(San Diego, CA). Focusing in external distribution as mention before is a great opportunity for BJ’s to expand into a different segment. It would allow for BJ’s name to expand nationally using the distribution as a marketing tool for their restaurants.

Along with their microbrewery BJ’s has been extremely successful in California. There style and service has attracted thousands and has led to massive profits and numerous advantages for the stakeholders. BJ’s should be very smart about their future direction and should pounce on any opportunity and they should make sure that all the rules and regulations are implemented.

BJ’s should focus on embarking in the international market for the future. Their direction should be to crack the tough European Market as American beer is very popular in Europe and BJ’s can really pounce on the idea of opening an American Brew House in Europe.

Apart from the beers, BJ’s can also attract a lot of European customers with it’s cuisine. They can introduce every entrée as a dish from a different region of the United States. BJ’s should also look to focus on making their menu more extensive as it is important to have variety of food, especially if you want to attract customers in such a culturally diverse place as Europe.

BJ’s goal should not change, but their vision should be broadened onto a bigger scale as they should try and implement their success story in some other part of the world and should take advantage of a growing hospitality market around the world. It does not necessarily have to be in Europe but places like Malaysia and Thailand have a booming tourism economy and these places could be an ideal place for BJ’s to jump start their international career.

Overall, BJ’s future strategic direction should be directed towards the world! They should focus on bringing the elements of classic and delicious American dining along with great customer service to different parts of the world where this style would be appreciated. A lot of brands have expanded into the global market as BJ’s should do the same as they have been very successful in the way they have implemented their strategies.