Wendy’s Case Analysis Record (CAR)
Problem statement
Wendy has had several unsuccessful campaigns since 2002, which has dramatically curtailed its performance while also threatening its sustainability in the competitive fast-food industry. The challenge has prompted the company to opt for expanding in the international markets to enhance its performance and sustainability to accomplish its short-term objective of attaining customer loyalty by 10% and long-term objective of being the quality leader in the fast-food industry.
SWOT analysis of Wendy’s
Strengths
Wendy’s has various capabilities, which makes it perform better compared to the rivals. Some of the firm’s strengths include but are not limited to high operating margins, focus on international expansion, and substantial presence in the US and Canada. The company has steady operating margins, which have been growing over the past four years. Stable operating margins have enhanced the company’s sustainability in the aggressive fast food industry, and this has greatly prevented the firm from exiting the industry. Additionally, the focus on international expansion has helped in improving the market of the company, and this has positively impacted it by growing its revenue, which is essential in promoting Wendy’s sustainability within the industry.
Weaknesses
The company’s challenges encompass slow international expansions, a steady drop in revenue, and the overdependence on franchisees. The franchises manage most of the company’s restaurants, and this has left it only to own and run a few restaurants by itself. Overdependence on franchises has made the company rely on its franchisees for a more significant portion of its revenue. Furthermore, the brand’s international growth has remained relatively low, and this has made Wendy’s to receive low revenue from international markets.
Opportunities
The available opportunities for Wendy’s entail the use of AI and digital technology, growth in the Asian markets, and global economic growth. The company has opportunities for growth in China and India, which would help it expand its international market and increase its revenue stream. Global economic growth has also led to an increase in employment and job opportunities, which offers the opportunity for the expansion and performance in various regions. An increase in employment raises the level of disposable income, which determines people’s ability to consume fast food.
Threats
The threats to the company involve intense competition and geopolitical disruption. McDonald’s and Burger King create stiff competitive pressure on Wendy’s, which usually threatens its performance and sustainability within the industry.
Alternatives
The two alternatives for solving unsuccessful campaigns to enter new markets include establishing partnerships and engaging in joint ventures. Creating a partnership with an existing company within the international market would make the products of the Wendy’s to be supplemented by the partnering company. Hence it will make Wendy’s enter into new global markets effectively. Moreover, a joint venture will make Wendy’s to enter new international markets successfully. A joint venture usually increases the likelihood of a company to succeed in the global market, and it eradicates the risks of discrimination. Nonetheless, the joint venture has a restricted flexibility, and it is associated with vague objectives. Similarly, partnership involves sharing of burden and better decision making. However, it is associated with limited access to capital, together with the potential for difference and conflict.
Recommendation
The company should diversify its business to lower its exposure to market risk.
It should also foster its investment for product innovation to address the trends in the change in the preferences of the consumers.
Implementation
The company should execute the recommendations and the alternatives to the problem to promote its expansion into global markets to enhance its performance and stream of revenue.