Kauai: Extending a fast-food brand into traditional retail as a growth strategy

Abstract

Subject area of the teaching case The case can be used in the subject areas of marketing, strategy, business model innovation in an emerging market. The case introduces a practical example of brand extension as a growth strategy employed by an existing brand to secure additional revenue channels and customer touch points. Student level This teaching case is aimed at postgraduate business students such as Master's degrees in Business Administration degrees, postgraduate diplomas, executive education, or specialist Master's degrees. Brief overview of the teaching case Kauai is a health restaurant with 150 stores across South Africa, Namibia and Botswana, more than 50% of which are franchise-owned. An acquisition of the original Kauai quick-service restaurant (QSR) chain by Real Foods in 2015 leads to a complete rebrand and overhaul of its product offering and store experience. Since the acquisition, the business operates as a startup with few formal processes and KPIs in place to drive performance. Despite the obvious success the team is battling with the factors that need to be considered to ensure that they can scale adequately to realise full potential. Plus how should they position the existing brand effectively within the FMCG space to maximise the contribution of brand equity to its success? Expected learning outcomes –The understanding around the business model of a strong, existing brand entering a highly competitive and price-sensitive FMCG. –Analysing the marketing strategy and brand identity approaches that could be used. –An understanding of the brand extension strategy that could be implemented in light of various challenges. –Understanding how retail marketing works in an emerging market context.