COVER PAGE Group 5 Strategic Management Final Project Report - Five Guys Table of Content Five Guys’ Strategy Analysis - Final Report Industry: Casual-fast restaurant in Canada Company: Five Guys Contact: Michael Oppedisano, from Asst. Controller at Bantam Restaurants Part 1: Organizational Introduction Five Guys has been a Washington, DC favorite since 1986 when Jerry and Janie Murrell offered sage advice to the four young Murrell brothers: “Start a business or go to college.” The business route won and the Murrell family opened a carry-out burger joint in Arlington, Virginia. Their mission was to serve an unparalleled burger made with fresh ingredients, in a clean environment and with a reasonable price. In order to achieve …show more content…
Part 2: External Environment Although Five Guys is present throughout North America, our main focus will be on the fast-food industry within Canada. In particular, Five Guys competes in the fast-casual subsegment, which consists of restaurants that offer both the convenience of traditional quick service restaurants (QSR) and the quality and experience of casual dining. The Canadian fast-food market was valued at $7.6 billion in 2011, and expected to grow by 16.2% to reach $8.8 billion in 2016 (MarketLine Advantage, 2011). Tim Horton’s, McDonald’s, and Subway have remained the three major players in recent years (Passport GMID, 2014). In order to have a better grasp of the industry structure, we will perform a Porter’s five forces analysis. First, the threat of substitutes is low. Fast-food restaurants differentiate themselves from alternative food options based on convenience and cost. The fast casual segment further distinguishes itself by adding the advantage of quality. On the other hand, the intensity of existing rivalry is high. The Canadian fast-food industry has numerous players, from large chains like McDonald’s to small independent fast-food restaurants. Since price is an important distinguishing factor, price competition is common, as can be seen
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Initially, the restaurant had only four sandwiches where the star was the grilled cheese steak. Along with the subs, fresh-cut french fries, and hand-squeezed lemonade were served. The food was prepared on order, directly in front of the customers using the finest meats and the freshest ingredients. The concept of on-order freshly prepared food quickly became a hit.
The fast food industry encompasses a wide variety of economic situations. To begin with, within in the industry a widely discussed topic is the idea of workers forming unions in order to fight for better working conditions. Advertising is also a prominent factor that guides the productivity of businesses of the fast food industry. Another guiding force for fast food chains is globalization of their businesses, without advertising and globalization of businesses fast food chains would not be as successful as they are. The success of businesses can be determined through the idea of elasticity and the income effect because if a business knows the demographic they are targeting the companies will likely know how responsive profits are to a change
When they first started they only accepted people that had the amount of money upfront to invest because they knew banks would not help (Welch). This also allowed the franchisee and the corporation to make a profit right away instead of having to pay a loan back. The third reason that they were able to succeed is because they kept the business simple. They only decorate the decor with red and white stripes. They also do not add anything else to the menu other than burgers and fries. They do not want to decrease the quality of their food by adding additional items to the menu, and they also want to be able to only serve fresh ingredients. For years people have asked them to add different items to their menu like milkshakes, they feel that they will not serve anything frozen so they would have to keep fresh milk and ice cream (Welch).
Outside the United States, Yum! operates almost 14,000 restaurants in over foreign countries including Russia, Australia, India, South Korea, France and Morocco. The company plans to open about 1,400 international units this year, consistent with the pace of openings over the last five years (Yum! Brand “International”).
The Porter Five Forces model helps to simplify the business decision-making process by breaking down business situations into five key areas, which include Supplier Power, Buyer Power, Competitive Rivalry, Threat of Substitution and Threat of New Entry (Mind Tools, 2011). By using this
At its core, Porter’s 5 forces describes a firms overall ability to compete in a market. We discuss our analysis of the 5 forces and how they affect SAS Corporation and its stakeholders. Please examine Figure 1.1 to view a diagram that depicts the 5 forces.
2. How Porter's Five Forces of Competition impact the company Porter set out his famous Five Forces model in chapter 1 of his 1980 Competitive Strategy: Techniques for Analyzing Industries and Competitors, which has now become the dominant paradigm for the "Structural Analysis of Industries." The model places supply chain forces on the horizontal access and market structure vertically above and below industry competition, which they all point to as the center of potential profitability (Hitt, Ireland and Hoskisson,
Michael Porter’s Five Forces Model is a useful tool to aid organizations facing the challenging decision of entering a new industry or industry segment. The Five Forces Model helps determine the relative attractiveness of an industry and
The fast casual restaurant industry is a relatively fresh concept that is growing quickly between fast food and casual dining options. Fast casual is becoming a popular choice for many individuals and families since it still offers relatively quick, inexpensive food with more customization and higher quality options. It is also a preferred choice as compared to fast food since many individuals are striving to eat more nutritious foods and live a healthier lifestyle. Since
Porter’s five forces can be interpreted as a tool that not only shapes the industry as a whole, but also determines the industry’s areas of strength and weakness. This model can serve as a guideline that establishes a company’s current situation or position within the market as it relates to five key aspects. The five aspects or forces allocate the competitive influence or power as it relates to business. Porter’s five forces include: threat of new entrants, customer power, supplier power, competition and substitutions. In relevance to My Career City:
The analysis of the Porters five forces are very important to business entities. Based on the analysis a business can evaluate their current position and positions that they plan to progress towards as it relates to the industry they are operating in.
Porter’s Five Competitive Forces Analysis is a framework developed by Michael E. Porter of Harvard Business School for study of industry analysis by analyzing five competitive forces which define industry and its business strategy. These five competitive forces determine the competitive advantages, disadvantages and attractiveness or profitability of industry.
The scan on Porter’s five forces shows that, featured with high-quality signature products, we are in a favorable position in the market. While our competitors are failing and leaving this market, we are able to maintain our market share. We also have the potential and can utilize our leverage to expand.
Next I will expand on Porters Five Forces for the coal industry. The five forces include competition from rival sellers, potential new
The economic structure of an industry is not an accident. Its complexities are the result of long-term social trends and economic forces. But its effects on you as a business manager are immediate because it determines the competitive rules and strategies you are likely to use. Learning about that structure will provide essential insight for your business strategy. Michael Porter has identified five forces that are widely used to assess the structure of any industry. Porter’s