Kipling’s Taco Shop was the only establishment serving tacos and other quick bites in a small college town for more than 20 years. Service was limited to the walk-up window, with no delivery and no inside seating. The owner of Kipling’s focused on well-made and generously filled tacos and burritos at price that was competitive with local fast-food burger chains. However, as the college and the surrounding town grew, national competitors such as Taco Bell and regional competitors such as Del Taco entered the market. Both chains have taken a noticeable slice of business from the company, so Kipling’s management has decided to abandon the current low-price strategy and instead move up-market. It has decided to partner with a local brewpub and open a store that serves specialty Mexican and other Latin American food using fresh ingredients sourced locally to pair with specialty in-house beers as well as soft drinks from Latin America.

Required

a. How will the changes in business strategy of Kipling’s affect the business model and the performance measures that will be important for running the business?

b. How will the core assets and capabilities of Kipling’s need to change as it changes the eatery’s business strategy?