Five Guys Burgers and Fries

An oligopolistic market is one that has several dominant firms with the power to influence the market they are in; an example of this could be the supermarket industry which is dominated by several firms such as Tesco, Sainsbury’s, and Waitrose etc... Furthermore an oligopolistic market can be defined in terms of its structure and its conduct, which involve various different aspects of economics.

If you are from the south, you have probably heard of the fast food chain Zaxby’s. With more than 660 locations[bandwagon, logos], the company is worth billions, all made possible by two young entrepreneurs, Zach McLeroy and Tony Townley. The two have been best friends since fifth grade, where they decided that there was a need for better chicken. Later, McLeroy sold his drum set- giving up his rockstar career to start the chicken joint- which now boasts a annual revenue of about 1.7 billion. [anecdote, pathos]

Oligopolies are a type of market structure evident in Australia, which is comprised of 2 or more firms having a significant share of the market. In an oligopoly the few firms sell similar but differentiated or homogenous products and is characterised by a large number of buyers making it a form of imperfect competition. This market structure is evident through the Big Four Banks, Phone Industry - Vodafone, Optus and Telstra.

Oligopolies have been around ever since there is trade. However, it has only recently gained grounds in this age of globalisation. Never before has oligopolistic competition been so fiercely contested across so many industries.

There are many models of market structure in the field of economics. They include perfect competition on one end, monopoly on the other end, and competitive monopoly and oligopoly somewhere in the middle. In this paper, we will focus on the oligopoly structure because it is one of the strongest influences in the United States market. Although oligopolies can also be global, we will focus strictly on the United States here. We will define oligopoly, give key characteristics important to the oligopoly structure, explain why oligopolies form, then give an example of an oligopoly in today’s economy. Finally, we will discuss the benefits and costs in this type of market structure.

There are thousands of different fast food chains in the world. One of these chains is Five Guys, with about 1,000 restaurants. One might think that this fast food place is just like the others, with meals containing preservatives and chemicals, but this restaurant does prove itself worthy of praise.

Between 1986 and 2001, the company opens five restaurants in the D.C. area and became a local favorite. In 2002, Five Guys opened franchises in Virginia and Maryland. By 2003, franchising opened up to the rest of the country, as well as Europe, the U.K., and the Middle East. The company’s restaurants store its fresh ground beef in coolers instead of freezers, and they still use peanut oil to fry food.

The owner of Five Guys, Jerry Murrell, was very successful when it came to his burger business. He didn’t have to do much advertising when he first opened, his shop got business by word of mouth. Murrell operated his business differently than other owners, he used the best ingredients, even if they were more expensive. Since he didn’t have much money to expand, his sons persuaded him to franchise his business, which Murrell was very against, but he did it. After franchising, thousands of businesses have opened all over the United States and now the world. When Murrell opened his first burger joint, he only put $35,000 into it including the rent and machinery. I learned from this that it doesn’t require much money to reach out and start your

McDonald's franchise operates in oligopoly market since the fast food industry is one of the major industries with this type of markets. Some of the common features of oligopolistic markets are price rigidity and price war that have significant impacts on the firm's pricing strategies. The reason for the operation of this franchise in oligopolistic markets is that fast food industry is characterized by a small number of large producers or sellers. As a result, every large seller in the industry has a perceptible impact on other sellers as they influence the market.

The first company that comes to mind when I think of an oligopoly is the company Best Buy. Although Best Buy is apparently the leader in its market not, a couple decades ago there was more competition. Companies like Radio Shake and Circuit City were also majors players in the electronics department store arena. I was only a child when Best Buy began their take over, so I am not sure exactly what their marketing campaign was back then. I would however assume that whatever their marketing strategy was it was successful in attracting new customers who must have become brand loyal. I came to that conclusion simply because Circuit City and Radio Shack were both very well-known and industry leaders, 20 & 30 years ago and now they no longer

Five Guys is a large fast-food chain restaurant that stands out among the rest. They have different philosophies that set them apart from other fast-food companies. Many of the values that Five Guys started with have made them succeeded and are still a huge factor in their success today. After being around for seventeen years, Five Guys decided to start franchising the company, which lead to a large success in such a short amount of time. We will also discuss the ethical and social practices that Five Guys have that are a part of their company.

As Wimpy said, “I will gladly pay you Tuesday for a hamburger today.” (Great quotes) There is nothing better than a good greasy hamburger on any day. I happened upon Smashburger one day after I needed to go to Home Depot and wanted something other than fast food. Casual fast food has become the trend in franchises; it works well because it is faster than regular dining and is better than fast food. Because of an experience at Smashburger, the search was on for one in Moorhead closer to work and found the local restaurant Crave Burger. Crave Burger started as a local competition for the franchises. (Biz Journals) If there is time to trek over to Fargo for the taste and comparable pricing, Smashburger is better. This difference is possibly due to how they prepare the burger. They have a unique process of smashing the burger to sear it. (smashburger) . Although, Crave Burger is a decent alternative for those times when there is not the time to run all the way across town.

(1) Wendy’s was able to achieve its initial success and grow so rapidly at a time when the quick service hamburger business appeared to be saturated because Wendy’s chose a strategic plan of targeting a different segment of the hamburger market, young adults and adults. Dave Thomas’s idea of an “old fashioned” hamburger allowed Wendy’s to differentiate from the competitors. The hamburger itself is made from fresh beef that is cooked to order and served directly from the grill to the customer. It is done this way to allow the customer to see what they are ordering. Allowing customers the opportunity to see the cooking process gains a certain level of comfort between the customer and the restaurant. “Old fashioned” hamburgers are square in

Five Guys has very strict rules on how the burgers should be prepared, leaves no room for change|

A formal definition of oligopoly is: “...a market structure with a small number of sellers - small enough to require each seller to take into account its rivals’current actions and likely future responses to its actions.” - Recognised interdependence is the hallmark of oligopoly.