wendy's SWOT

Competitive Compet itive Analysis

Group 3 Garrett Matthews

y

David Hayward

y

y

Cory Logan

y

Nick Watkins

y

Mayra Garcia

y

Lindsey Pacatte

Strengths

Expert Management

Global Brand

Atmosphere

Opportunities

International Market Recession

Fish Sandwich

Weaknesses

Breakfast Menu Problem

Management

Threats

Food Borne Illnesses

Increase in Beef Prices

Wendy·s SWOT Analysis Internal Factors Strengths

Favorable Factors

Opportunities

Expert Management

International Market

Atmosphere adds value

Advances in Technology

Global Brand

Fresh Burger Market

Strong Supply Chain

Recession

Weaknesses

Unfavorable Factors

External Factors

Threats

Breakfast Menu

Food Borne illness

Management Changes

Increase in Beef Prices

Key Success y

Factors

Contribute 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 Share Third largest company in QSR Introduction of new products y

y

Customer Concentration Location variables Strengthen penetration y

y

Competitive Factors Cost Control Centralized distribution center Reduce labor costs Economies of scale y

y

y

Investments International fast food markets Knowledge of foreign markets y

y

Managerial Factors y

Corporate Image 

y

Structure

Social 

and culture

Responsibility

Dave Thomas Foundation for Adoption Receives 2009 PR News Corporate Social Responsibility Award

Managerial Factors y

´Doing What·s Right for Our Customersµ 

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 Factors y

Strategic 



Growth Plan

Phase 1- revitalizing the brand name and growing sales and profit Phase 2 ² plan to build on that success by continuing to improve on company name and brand x

´Doing What·s Right for

Our

Customersµ

Financial Factors: Current Ratio y

y

y

y

y

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 y

Wendy·s current ratio is not a concern currently

y

The

y

This

y

They

concern is the downward trend in its current ratio downward trend will directly affect investors and creditors decision making have the lowest current ratio making them more of a risk compared to the benchmark companies

Financial Factors: Return on Equity y

y

y

y

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 y

Wendy·s is volatile. 

y

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 Score y

y

y

y

Snapshot

of a company·s likelihood of filling bankruptcy Composite score encompassing 5 commonly used financial ratios Company·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 Score y

y

y

Wendy·s current Altman Z Score is 7.85 Indicates Wendy·s is safe from bankruptcy at the current time Wendy·s creditor·s will view them as safe to loan to

Technical y

y

Factors

New 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 y

y

y

Performers

operational 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 y

y

Factors

The

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 y

y

Factors

QSR 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-byhousehold, individual-by-individual basis.

Wendy·s Strategy Formulation y

Wendy·s is confined to a red ocean

y

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 Characteristics y

y

Because Price and Convenience are near universal throughout firms in the industry, Wendy·s must focus on becoming the ´highly favoredµ fast-food choice Doing so will give customers more inclination to visit store locations

Forces that Affect Competition y

y

y

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 Recipeµ

Forces that Affect Competition y

The Super Size

Me

Documentary y

y

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 Industry y

y

Overall

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