HONEYGROW: STIRRING UP THE PERFECT EXPANSION STRATEGY
CASE STUDY SOLUTION
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SYNOPSIS
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Honeygrow, a healthy food restaurant chain, had seen sustained success since opening its first location in
Philadelphia in 2012. More than a decade later, at the end of 2023, Justin Rosenberg, founder and CEO of
honeygrow, is considering the advantages and disadvantages of an expansion strategy and wondering how
n
he should lean in more to social media to aid and develop his brand story further.
tio
Honeygrow’s management team is also assessing the viability of expanding beyond the Northeast Corridor
region to achieve substantial growth. The company enjoys strong brand name recognition and has a strong
unique selling proposition (USP), but there are still many questions about honeygrow’s next steps, including
lu
which growth strategy is most suitable. Is a franchise strategy an option, and if so, does the company have
the necessary resources and a skilled management team to adequately monitor and support prospective
So
franchisees? What marketing and operational issues will the company be likely to encounter if it pursues a
strategy of expansion?
OBJECTIVES
• Analyze a company’s key success factors and challenges—such as geographic saturation—to determine
whether the business is suitable for expansion through wholly owned subsidiaries or a franchise model.
• Analyze a firm’s resources to identify its competitive advantage.
• Assess the relationship between the franchisor and franchisee, and highlight the elements that make
such a relationship successful.
• Discuss the importance of management commitment, customer-centricity, leadership, and knowledge
to a successful business venture.
The Case Solution Starts From page 8
,• Analyze social media as a form of marketing and customer acquisition.
• Evaluate which forms of business entity would be most suitable for an enterprise by considering each
form’s management, control, funding, liability, and tax implications.
• Identify the sources of funding available to entrepreneurs/founders.
• Discuss the challenges founders face in taking their ideas from a business plan to reality.
• Identify the pros and cons of franchising.
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The Case Solution Starts From page 8
,ASSIGNMENT QUESTIONS
The assignment questions are grouped into three categories: (1) general marketing strategy analysis, (2)
expansion and growth strategy, and (3) entrepreneurship and law.
Marketing Strategy
1. What are honeygrow’s core competencies? What are the sources of its USP?
2. Apply the resource-based view (i.e., Porter’s Five Forces or the 5Cs framework) to conduct a further
internal and external analysis.
a. Use the Porter’s Five Forces framework to analyze honeygrow.
b. Use the 5Cs framework to determine the overall environment in which honeygrow operates.
c. Based on the above analysis, what are the challenges and opportunities associated with being a
first mover in the healthy stir-fry, salad, and honeybar space?
e
3. How efficiently does honeygrow acquire and retain customers? What do they do well, and what needs
to improve? Assess how honeygrow has used owned, earned, and paid media. What needs to change as
pl
the company scales? Why?
Expansion and Growth Strategy
m
Sa
4. What attributes are needed for the franchise business model to succeed? Does honeygrow exhibit these
traits? Should Rosenberg consider franchising?
5. How can Rosenberg turn his fast-casual healthy food restaurant chain into a sustainable business
serving the needs of a critical mass? If you were Rosenberg, what would you do to expand?
n
6. What are the pros and cons of honeygrow becoming a franchise?
tio
Entrepreneurship and Law
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7. What were the strategic financial and legal reasons for establishing honeygrow as an LLC?
8. What funding options did Rosenberg have, and what was the basis for his ultimate decision in this
So
respect?
9. What obstacles did Rosenberg face in bringing his concept from a business plan to reality?
The Case Solution Starts From page 8
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Sa
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ANALYSIS
Marketing Strategy
lu
1. What are honeygrow’s core competencies? What are the sources of its USP?
So
Honeygrow offers a focused
differentiation strategy (see Exhibit -1). This strategy should be highlighted in all its marketing materials.
Exhibits -2 and -3 depict a typical strengths, weaknesses, opportunities, and threats (SWOT) analysis of
honeygrow’s perceived internal and external components. The SWOT analysis shows us that there are
multiple opportunities for growth in the industry and brand recognition.
• The rising generational preference for clean eating is one of honeygrow’s major strengths, in addition
to its fast service and convenient store layout.
• The opportunities indicate that there is huge room for growth.
• Since honeygrow is primarily located in the Northeast, the ability to expand its franchise across the
region will help the company grow its brand awareness significantly.
• Honeygrow will have opportunities to enhance its relationships with other small businesses as well as
to create partnerships to further get its name out.
The Case Solution Starts From page 8
,9. What obstacles did Rosenberg face in bringing his concept from a business plan to reality?
Founders have a vision. They are idea driven and need funding to make their vision into a reality. Since
many founders do not possess the personal wealth to launch a business, they must convince others to buy
into their vision and help them capitalize on it. Rosenberg had a business plan and shared it with nearly one
hundred potential investors. It takes grit and confidence to continue to pitch a vision when over 90 people
have declined to buy into it. After two and a half years, the 94th potential investor said “yes” because he
e
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m
6
Sa
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tio
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So
The Case Solution Starts From page 8
, EXHIBIT -1: HONEYGROW’S POSITIONING STRATEGY
Cost Leadership Differentiation
Focused Cost Leadership Focused Differentiation
HONEYGROW
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EXHIBIT -2: INTERNAL ANALYSIS OF HONEYGROW
Sa
Strengths
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tio
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So
The Case Solution Starts From page 8
, EXHIBIT -4: MARKET ANALYSIS OF HONEYGROW (USING PORTER’S FIVE FORCES)
Threat of new entrants: Bargaining power of suppliers:
Moderate Moderate
• Low barriers to entry • Local suppliers
• •
• •
Bargaining power of buyers: Threat of substitutes: Rivalry among competitors:
Moderate Moderate High
• • • Brand recognition
• •
e
• •
•
pl
•
m
Sa
n
tio
lu
So
The Case Solution Starts From page 8
CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
Honeygrow, a healthy food restaurant chain, had seen sustained success since opening its first location in
Philadelphia in 2012. More than a decade later, at the end of 2023, Justin Rosenberg, founder and CEO of
honeygrow, is considering the advantages and disadvantages of an expansion strategy and wondering how
n
he should lean in more to social media to aid and develop his brand story further.
tio
Honeygrow’s management team is also assessing the viability of expanding beyond the Northeast Corridor
region to achieve substantial growth. The company enjoys strong brand name recognition and has a strong
unique selling proposition (USP), but there are still many questions about honeygrow’s next steps, including
lu
which growth strategy is most suitable. Is a franchise strategy an option, and if so, does the company have
the necessary resources and a skilled management team to adequately monitor and support prospective
So
franchisees? What marketing and operational issues will the company be likely to encounter if it pursues a
strategy of expansion?
OBJECTIVES
• Analyze a company’s key success factors and challenges—such as geographic saturation—to determine
whether the business is suitable for expansion through wholly owned subsidiaries or a franchise model.
• Analyze a firm’s resources to identify its competitive advantage.
• Assess the relationship between the franchisor and franchisee, and highlight the elements that make
such a relationship successful.
• Discuss the importance of management commitment, customer-centricity, leadership, and knowledge
to a successful business venture.
The Case Solution Starts From page 8
,• Analyze social media as a form of marketing and customer acquisition.
• Evaluate which forms of business entity would be most suitable for an enterprise by considering each
form’s management, control, funding, liability, and tax implications.
• Identify the sources of funding available to entrepreneurs/founders.
• Discuss the challenges founders face in taking their ideas from a business plan to reality.
• Identify the pros and cons of franchising.
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 8
,ASSIGNMENT QUESTIONS
The assignment questions are grouped into three categories: (1) general marketing strategy analysis, (2)
expansion and growth strategy, and (3) entrepreneurship and law.
Marketing Strategy
1. What are honeygrow’s core competencies? What are the sources of its USP?
2. Apply the resource-based view (i.e., Porter’s Five Forces or the 5Cs framework) to conduct a further
internal and external analysis.
a. Use the Porter’s Five Forces framework to analyze honeygrow.
b. Use the 5Cs framework to determine the overall environment in which honeygrow operates.
c. Based on the above analysis, what are the challenges and opportunities associated with being a
first mover in the healthy stir-fry, salad, and honeybar space?
e
3. How efficiently does honeygrow acquire and retain customers? What do they do well, and what needs
to improve? Assess how honeygrow has used owned, earned, and paid media. What needs to change as
pl
the company scales? Why?
Expansion and Growth Strategy
m
Sa
4. What attributes are needed for the franchise business model to succeed? Does honeygrow exhibit these
traits? Should Rosenberg consider franchising?
5. How can Rosenberg turn his fast-casual healthy food restaurant chain into a sustainable business
serving the needs of a critical mass? If you were Rosenberg, what would you do to expand?
n
6. What are the pros and cons of honeygrow becoming a franchise?
tio
Entrepreneurship and Law
lu
7. What were the strategic financial and legal reasons for establishing honeygrow as an LLC?
8. What funding options did Rosenberg have, and what was the basis for his ultimate decision in this
So
respect?
9. What obstacles did Rosenberg face in bringing his concept from a business plan to reality?
The Case Solution Starts From page 8
, e
pl
m
Sa
n
tio
ANALYSIS
Marketing Strategy
lu
1. What are honeygrow’s core competencies? What are the sources of its USP?
So
Honeygrow offers a focused
differentiation strategy (see Exhibit -1). This strategy should be highlighted in all its marketing materials.
Exhibits -2 and -3 depict a typical strengths, weaknesses, opportunities, and threats (SWOT) analysis of
honeygrow’s perceived internal and external components. The SWOT analysis shows us that there are
multiple opportunities for growth in the industry and brand recognition.
• The rising generational preference for clean eating is one of honeygrow’s major strengths, in addition
to its fast service and convenient store layout.
• The opportunities indicate that there is huge room for growth.
• Since honeygrow is primarily located in the Northeast, the ability to expand its franchise across the
region will help the company grow its brand awareness significantly.
• Honeygrow will have opportunities to enhance its relationships with other small businesses as well as
to create partnerships to further get its name out.
The Case Solution Starts From page 8
,9. What obstacles did Rosenberg face in bringing his concept from a business plan to reality?
Founders have a vision. They are idea driven and need funding to make their vision into a reality. Since
many founders do not possess the personal wealth to launch a business, they must convince others to buy
into their vision and help them capitalize on it. Rosenberg had a business plan and shared it with nearly one
hundred potential investors. It takes grit and confidence to continue to pitch a vision when over 90 people
have declined to buy into it. After two and a half years, the 94th potential investor said “yes” because he
e
pl
m
6
Sa
n
tio
lu
So
The Case Solution Starts From page 8
, EXHIBIT -1: HONEYGROW’S POSITIONING STRATEGY
Cost Leadership Differentiation
Focused Cost Leadership Focused Differentiation
HONEYGROW
e
pl
m
EXHIBIT -2: INTERNAL ANALYSIS OF HONEYGROW
Sa
Strengths
n
tio
lu
So
The Case Solution Starts From page 8
, EXHIBIT -4: MARKET ANALYSIS OF HONEYGROW (USING PORTER’S FIVE FORCES)
Threat of new entrants: Bargaining power of suppliers:
Moderate Moderate
• Low barriers to entry • Local suppliers
• •
• •
Bargaining power of buyers: Threat of substitutes: Rivalry among competitors:
Moderate Moderate High
• • • Brand recognition
• •
e
• •
•
pl
•
m
Sa
n
tio
lu
So
The Case Solution Starts From page 8
