In mid-2004 the president of Eli’s Cheesecake Company, Mr Marc Schulman, was reviewing the policies that had guided the international expansion of the firm.

In the 1990s the company had recognized the potential for increasing international sales provided by the Internet and the improvements in logistics. The company had moved quickly to exploit that potential.

Eli’s opened its first website in 1995. This helped support the company’s policy, ‘follow your customer,’ by making it easier to continually provide up-to-date information to existing and potential customers, and to facilitate ordering and service processes. It resulted in accelerated growth, both domestically and internationally, and Eli’s now exports its products to over 20 countries. In 2003 the state of Illinois gave Eli’s its ‘Exporter of the Year Award.’

In 2004, annual sales passed US$35 million. In addition to its primary business of selling 50,000 cheesecakes per day in over 100 flavors and sizes, the company also offers tie-in products such as sweatshirts that help to spread the company name.

Mr Schulman was now planning to expand into additional overseas markets. This raised questions about selecting the countries into which to expand, possible changes in customer selection procedures, and the possibility of using additional marketing channels or entry modes. Whatever he did, he wanted to be sure that it would be consistent with the original vision for the company and the policies that had resulted in their success to date. In order to assist in the effort, Mr Schulman had asked their former US Sales Manager, Walter Babian, to come back from retirement to be Senior Vice President of International Sales. Mr Babian was living in Arizona and continues to reside there, an option made feasible by the Internet and fax. While he spends a substantial amount of time traveling overseas to develop and maintain relationships, and some time at the Chicago headquarters, his home can be anywhere.

Company background

Marc Schulman had founded Eli’s Cheesecake Company on 4 July 1980, in part to fulfill a dream of his father, Eli Schulman. The senior Schulman was a 48-year veteran of the restaurant business, who had eventually opened a fine restaurant in Chicago, ‘Eli’s the Place for Steak.’ In addition to operating the restaurant, Eli Schulman took a great interest in civic affairs. He participated in and sponsored civic events, provided appropriate (and legal)

gifts to organizations and dignitaries, and was host to and photographed with a wide range of important individuals including presidents of the United States. His activities and personality resulted in widespread recognition of, and a great deal of favorable publicity for, his restaurant.

At the restaurant, Eli developed an exceptionally rich and creamy cheesecake that customers began referring to as ‘Chicago’s Finest.’ He had a vision of selling something outside of his restaurant that would carry his name, and his signature cheesecake seemed to be the appropriate product. Eli’s vision became a reality when his son, Marc, founded Eli’s Cheesecake Company. The new venture grew steadily through the 1980s following four principles: Always provide high-quality food............

Questions

1. What factors/actions/characteristics of Eli’s have made its Web initiative so effective?
2. Evaluate the company’s use of promotion versus traditional advertising in light of the type of business it is in. Would another mix of promotion and advertising more efficiently or effectively meet its objectives?
3. Are the apparent objectives of Eli’s Cheesecake the same as those you would expect to find in a large conglomerate?
4. What appears to be the emphasis on short-term versus long-term objectives?
5. What channels should Eli’s consider in its international expansion?
6. How should Eli’s go about identifying potential new markets?
7. How should Eli’s go about finding potential new distributors or large customers?
8. Should Eli’s consider other methods of market entry such as joint ventures or establishing production facilities abroad?
9. Will the present web page be adequate for the next several years? Why or why not?
10. Should Eli’s consider expanding its product line? If so, what additional products might it consider? What would be the advantages and disadvantages of its doing so?