Competitive Analysis Group 3 Garrett Matthews David Hayward Cory Logan Nick Watkins Mayra Garcia...
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Transcript of Competitive Analysis Group 3 Garrett Matthews David Hayward Cory Logan Nick Watkins Mayra Garcia...
Competitive Analysis
Group 3 Garrett Matthews
David Hayward
Cory Logan
Nick Watkins
Mayra Garcia
Lindsey Pacatte
Strengths
Expert Management Atmosphere
Global Brand
Opportunities
International MarketRecession
Fish Sandwich
Weaknesses
Breakfast Menu Management Problem
Threats
Food Borne Illnesses
Increase in Beef Prices
Wendy’s SWOT Analysis
Internal Factors External Factors Favorable Factors
StrengthsExpert ManagementAtmosphere adds valueGlobal BrandStrong Supply Chain
OpportunitiesInternational MarketAdvances in TechnologyFresh Burger MarketRecession
Unfavorable FactorsWeaknesses
Breakfast MenuManagement Changes
ThreatsFood Borne illness Increase in Beef Prices
Key Success FactorsContribute to a company’s
competitive advantages by identifying components that the company performs well in.◦Competitive Factors◦Managerial Factors◦Financial Factors ◦Technical Factors
Competitive Factors
Product Strength• Lack of differentiation• Unique patty shape
Customer Loyalty and Satisfaction• Convenience• Speed of service
Competitive Factors
Market ShareThird largest company in QSR Introduction of new products
Customer ConcentrationLocation variablesStrengthen penetration
Competitive Factors
Cost ControlCentralized distribution centerReduce labor costsEconomies of scale
InvestmentsInternational fast food marketsKnowledge of foreign markets
Managerial FactorsCorporate Image
◦Structure and culture
Social Responsibility◦Dave Thomas Foundation for
Adoption Receives 2009 PR News Corporate Social Responsibility Award
Managerial Factors“Doing What’s Right for Our
Customers”◦Focusing on core: Hamburgers◦Build on the success of Baconator◦Emphasize product being fresh never
frozen◦Updated menu: appeal to 18 to 34
year olds◦New image by capital reinvestment◦Total customer feedback system
Managerial FactorsStrategic Growth Plan
◦Phase 1- revitalizing the brand name and growing sales and profit
◦Phase 2 – plan to build on that success by continuing to improve on company name and brand “Doing What’s Right for Our Customers”
Financial Factors: Current Ratio
Over the 5 year period, current ratio for Wendy’s peaked of 1.66 in 2006
See a downward trend since 2006
Wendy’s current ratio was at .76 for 2008
This .76 current ratio can affect Wendy’s ability to secure short-term financing from both creditors and investors
Wendy’s currently has the lowest current ratio of all the benchmark companies
Financial Factors: Current Ratio
Wendy’s current ratio is not a concern currently
The concern is the downward trend in its current ratio
This downward trend will directly affect investors and creditors decision making
They have the lowest current ratio making them more of a risk compared to the benchmark companies
Financial Factors: Return on Equity
Wendy’s was highest in 2005 and 2006.
Most years there was an above average return for other companies.
In 2007, Wendy’s saw about a 6% drop in ROE from 2006.
In 2008, Wendy’s reported a loss of $480,000.
Financial Factors: Return on Sales
Wendy’s is volatile. ◦ Food prices; fresh
never frozen◦ Low margins;
competition◦ Must control cost
Overall McDonalds and Sonic had some of the highest returns◦ Utilize economies of
scale◦ lesser overhead cost
Financial Factors: Altman Z ScoreSnapshot of a company’s likelihood of
filling bankruptcyComposite score encompassing 5
commonly used financial ratiosCompany’s that are in the 1.8 and
under range are seen as extremely likely to file for bankruptcy
Anything above 3.0 is considered unlikely for bankruptcy
Financial Factors: Altman Z ScoreWendy’s current Altman Z Score
is 7.85Indicates Wendy’s is safe from
bankruptcy at the current timeWendy’s creditor’s will view them
as safe to loan to
Technical FactorsNew and up to date technologies
have long time been the means of support of the quick-service restaurant
Wendy’s has combined order-taking, order processing, and payment steps down to an effortless deed that only takes a matter of seconds.
Top Performersoperational excellence like
cutting costs, maintaining quality, and basically running a tight ship
product innovation which refers to creating a flood of great new products.
The information era, on the other hand, will require mastery of a third category of customer intimacy
Technical FactorsThe future generations of winners in
the QSR business will be well-known for the most part by how well they know their customers and how they make the most of that knowledge to build customer preservation and loyalty.
Wendy’s strategy takes structure along three steps: (1) collecting information, (2) turning information into knowledge and (3) turning knowledge into a customer relationship.
Technical FactorsQSR companies will have the
capability to know their customers in unmatched degrees of specificity.
Instead of the wide-ranging demographic segments that companies now use for their marketing, technology will facilitate a pinpoint approach on a household-by-household, individual-by-individual basis.
Wendy’s Strategy Formulation
Wendy’s is confined to a red ocean
Therefore, in order for Wendy’s to continue forth, they must look to new ventures and ways of doing business that are consistent with their mission but also allow for further future growth
Business and Economic CharacteristicsBecause Price and Convenience
are near universal throughout firms in the industry, Wendy’s must focus on becoming the “highly favored” fast-food choice
Doing so will give customers more inclination to visit store locations
Forces that Affect Competition
The Economy caused businesses everywhere to focus on low cost to the customer; this presents a problem when every firm lowers prices
The end result is that low price becomes the new standard so competition now lies in value
Wendy’s has taken this road before during the inflationary period of the 1970s, with the slogan “Quality is Our Recipe”
Forces that Affect Competition
The Super Size Me Documentary
Caused a public backlash against fast-food restaurants
In response to the 2004 film, Wendy’s introduced the Chicken Temptation® selections to their menu
Competing in the IndustryOverall Wendy’s needs to stand
by their strategy of creating a niche market by way of their side dish offerings.
Expand competition base by being innovative and effective