Chuck E. Cheese: Will the Rockstar Mouse Survive COVID-19?

Virginie Pioche Khare, Eckerd College, Karen Popovich, St Michael’s College
March 10, 2022
Strategy & General Management
3 pages
covid-19, covid-19 crisis, Zoom, crisis management, critical incident, management
Student Price: 
$4.00 (€3.68)
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“Whatever we decide, we have to remember that Chuck E. Cheese’s heart and soul is centered around entertainment,” thought Chuck E. Cheese (CEC) CEO David McKillips as he prepared for a Zoom meeting with a group of the company’s executives. “I know that we were not fully prepared for the hard pivot to a touchless and off-premises environment last month when COVID hit” (Coley, 2020a). McKillips had joined the company in early 2020, and he found himself facing an unprecedented challenge by March. How could the company survive a 94% drop in revenue? The company recently furloughed 17,000 employees and was burdened with nearly $1 billion in debt (Coley, 2020b). Adaptation to market changes was nothing new for CEC, but there were options to consider to keep the iconic birthday celebration destination, with its animatronic rockstar mouse, alive and kicking.

Learning Outcomes: 

1. Perform a situational analysis for a company facing a huge decrease in revenues.

2. Evaluate revenue-generating alternatives to survive a crisis such as a pandemic.

3. Analyze the consequences of filing for bankruptcy to save a business during a sudden loss of revenues.