When famed fine dining restaurateur Danny Meyer opened a hot dog cart in New York City's Madison Square Park in 2001, the venture drew legions of customers curious to experience Meyer's take on all-American street food. The curious became committed, and Meyer's little experiment acquired a permanent structure in the park-the Shake Shack.

Shake Shack regularly drew long lines, leading Meyer to build a company around the concept. In few years, Shake Shack expanded to a chain of burger restaurants in the United States and licensed outlets internationally.

Meyer sought to differentiate Shake Shack from the long tradition of burger joints and chains that dotted the American landscape. Firstly, Shake Shack was committed to high-quality ingredients and efficient operations in each of its eateries. Secondly, the company selected high-traffic locations and designed each outlet to fit into its chosen locale. Finally, Meyer wanted Shake Shack employees to have a culture of hospitality that welcomed each customer as if Shake Shack was a fine dining establishment, rather than a burger joint.

As of 2015, the formula seemed to be working. Shake Shack has developed a devoted fan base in each of its locations. New Shake Shack locations were greeted by enthusiastic fans who cheered for the opening of the operations in their neighborhoods.

However, the casual fine dining market space, in which Shake Shack was operating, was becoming increasingly crowded. The competition was fierce among various chains and concepts.

At least initially, investors seemed to believe that Shake Shack could. The company went public on January 30, 2015 with shares listed on the New York Stock Exchange (NYSE). During the opening day, investors bid up the $21 per share offering price by 118%, reaching $45.90 at the closing bell. By the end of May, investors were paying $92.86 per share. However, observers wondered if this price represented a realistic valuation of the enterprise or not.

Case Discussion Questions.

1. What was the business level strategy used by Shake Shack? How did Shake Shack proceed with the strategy? 2. Could Shake Shack hold itself against its legion of rivals? Discuss your answer. 3. What was Shake Shack truly worth?