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Swot Analysis Of Applebees

Decent Essays

Industry Analysis – Threat of New Entrants: High. In a fierce, clustered environment, the casual dining restaurant industry is open to a high level of new entrants. With its closing of 130 stores by the end of 2018, Applebee’s has to make drastic decisions in order to stay in competition much greater stay in business. Power of Buyers: High. Consumers who dine in at one of Applebee’s location across the country ultimately have high bargaining power. Switching cost are at a low when considering where to dine because of all the options offered throughout a city. Another idea to consider is the demand for the product and service offered by Applebee’s is weak. As trends in food and eating habits change, Applebee’s has failed to deliver the …show more content…

In 2016, Applebee’s closed 46 of its locations. There are multiple factors that have contributed to this fault. They have failed to develop and keep its target market. Capturing both markets has caused misdirection to Applebee’s. The confusion of their position has proven to be costly. In 2016 $76M worth of new fire wood grills were installed throughout most locations. However, in the first year of its rollout, sales were down 4.2% overall. The buzz and excitement was not being successfully delivered to the millennial crowd. Simultaneously it too did not appeal to the Baby Boomers. Millennials value experiences over material goods. In efforts of trying to appeal to the millennial market, they have missed to maintain the relationship with the traditional root market, i.e., Baby Boomers. Their core competency became their core rigidity. The marketing effort that started in 2010 has failed. Sales were dismantled in attempts to capture the Millennial market, and were not being maintained from their Baby Boomer market.
Strategic Issue- Should Applebee’s continue their efforts in capturing the emerging millennial market. Or should they completely focus on their traditional root market, Baby Boomers. Same store sales are down and something must be done.
Alternatives- 1. Focus on Millenials. Focusing on millennials will not only prove lucrative if successfully implemented, but it will also open a new window of opportunities.

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