Competitive Analysis

Group 3
y y y y y y

Garrett Matthews David Hayward Cory Logan Nick Watkins Mayra Garcia Lindsey Pacatte

Strengths

Expert Management

Atmosphere

Global Brand

Opportunities

International Market Recession

Fish Sandwich

Weaknesses

Breakfast Menu Problem

Management

Threats

Food Borne Illnesses

Increase in Beef Prices

Wendys SWOT Analysis

Internal Factors Favorable Factors
Strengths Expert Management Atmosphere adds value Global Brand Strong Supply Chain

External Factors
Opportunities International Market Advances in Technology Fresh Burger Market Recession

Unfavorable Factors

Weaknesses Breakfast Menu Management Changes

Threats Food Borne illness Increase in Beef Prices

Key Success Factors

y

Contribute to a companys 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 y Third largest company in QSR y Introduction of new products

Customer Concentration y Location variables y Strengthen penetration

Competitive Factors
Cost Control y Centralized distribution center y Reduce labor costs y Economies of scale Investments y International fast food markets y Knowledge of foreign markets

Managerial Factors
y Corporate Image Structure and culture
y

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

Managerial Factors
y

Doing Whats 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 Factors
y

Strategic 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
x Doing Whats Right for Our Customers

Financial Factors: Current Ratio

y y y y

Over the 5 year period, current ratio for Wendys peaked of 1.66 in 2006 See a downward trend since 2006 Wendys current ratio was at .76 for 2008 This .76 current ratio can affect Wendys ability to secure short-term financing from both creditors and investors Wendys currently has the lowest current ratio of all the benchmark companies

Financial Factors: Current Ratio

y y y y

Wendys 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

y y

Wendys was highest in 2005 and 2006. Most years there was an above average return for other companies. In 2007, Wendys saw about a 6% drop in ROE from 2006. In 2008, Wendys reported a loss of $480,000.

y y

Financial Factors: Return on Sales

y

Wendys 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 Score

y y y

Snapshot of a companys likelihood of filling bankruptcy Composite score encompassing 5 commonly used financial ratios Companys 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

Wendys current Altman Z Score is 7.85 y Indicates Wendys is safe from bankruptcy at the current time y Wendys creditors will view them as safe to loan to
y

Technical Factors
New and up to date technologies have long time been the means of support of the quick-service restaurant y Wendys has combined order-taking, order processing, and payment steps down to an effortless deed that only takes a matter of seconds.
y

Top Performers
operational excellence like cutting costs, maintaining quality, and basically running a tight ship y product innovation which refers to creating a flood of great new products. y The information era, on the other hand, will require mastery of a third category of customer intimacy
y

Technical 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. y Wendys strategy takes structure along three steps: (1) collecting information, (2) turning information into knowledge and (3) turning knowledge into a customer relationship.
y

Technical Factors
QSR companies will have the capability to know their customers in unmatched degrees of specificity. y 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.
y

Wendys Strategy Formulation

y

Wendys is confined to a red ocean Therefore, in order for Wendys 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

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

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 y The end result is that low price becomes the new standard so competition now lies in value y Wendys has taken this road before during the inflationary period of the 1970s, with the slogan Quality is Our Recipe
y

Forces that Affect Competition

The Super Size Me Documentary y Caused a public backlash against fast-food restaurants y In response to the 2004 film, Wendys introduced the Chicken Temptation selections to their menu
y

Competing in the Industry

Overall Wendys needs to stand by their strategy of creating a niche market by way of their side dish offerings. y Expand competition base by being innovative and effective
y