2 and half page power point about market analysis

S.W.O.T. Analysis – In-N-Out Burger

Introduction

Before I even left my home country (U.A.E.) to study in California, friends who have been here were already telling me that the first place I need to try out when I arrive is In-N-Out Burger. I tried it the night I arrived and I understood what the commotion was about. In-N-Out Burger is a stand-out burger and the simplicity of the menu makes eating there such a joy. Furthermore, when I found out that the company is still family-owned and refuses to franchise because they don’t want to affect the quality of the customer experience, it makes the restaurant even more special. They even have secret sauces and extras which only inside customers know (actually it is quite well known), a way of increasing customer loyalty.

In-N-Out Burger S.W.O.T. Analysis

Strengths

   Very strong brand awareness across the United States: In-N-Out Burger is a restaurant available in California, and more recently in Arizona, Nevada, Utah, Texas, and Oregon. The scarcity of the restaurants makes it highly demanded and people visit California just to eat at In-N-Out (Wagner, 2016).

   Simple menu: In-N-Out Burger really has only one item on their menu. This means faster customer turnaround and also it is easier to maintain food costs and ensure quality from suppliers.

   Recognized in the community as a great employer and mentor (especially for high school and young college students) (Taylor, 2017). This is also confirmed by the fact that they ranked 54th on Forbe’s “America’s 100 Best Employers” in 2017 (Forbes, 2017), and ranked 4thon Glassdoor’s “list of best places to work in 2018” (Taylor, 2017).

Weaknesses

   Small number of outlets: In-N-Out has only about 330 locations in six states, most of which are concentrated in its home state of California. This means that they are missing out on potential revenues if they expanded eastwards in the U.S. and even internationally.

   Limited menu choices: The fact that they only have one menu item (hamburger which can be topped with cheese) means that customers will not frequent the restaurant as much. This is in comparison to McDonald’s that has a greater variety of menu items.

   Family-owned. Since In-N-Out is still family owned, it cannot expand locations without diluting its ownership. This is a weakness because without more investors and more capital, expansion will be slow. However, it appears that this is actually what the company wants since it has refused many offers at an IPO or to sell shares.

Opportunities

   Expansion in North America and International: At present, In-N-Out only have presence in California and several other western states. In-N-Out has gained international awareness and there is a lot of opportunity to expand to established international markets like the U.A.E., Saudi Arabia, Brazil, and even China. First, they have all of the Eastern United States for expansion.

   Increase brand loyalty through new menu items for specific target markets: In-N-Out has a very simple menu and this is an opportunity to try out new menu items that will bring in new clients. There are a lot of vegetarian customers who don’t go to In-N-Out because there are no options for them, but they do share the same principles as In-N-Out such as care for the environment and ethical working practices.

   Leverage Technology: In-N-Out lines are notoriously long from the moment they open to the time they close – possible because of their strategic location at the entrance to many major freeways. However, just like Starbucks, In-N-Out can reduce wait times by allowing customers order online ahead of time. They can also use technology to speed up service at their restaurants.

Threats

   Cost. The biggest threat in the food industry is rising raw materials prices especially with agricultural products such as potatoes, beef, and vegetables – all main raw materials for In-N-Out. Maintaining strong supplier relationships is very important to keep costs down since customers don’t take too kindly to rising prices in the fast-food industry.

   Competition. The food industry is one of the most competitive industries because many new players enter the market every year, especially fast-food, which is at the maturity stage of the product life cycle. Furthermore, In-N-Out is a hamburger restaurant which makes its competition even more specific and challenging.

   Employee turnover. In-N-Out Burger actually pays its employees one of the highest salaries in the industry to keep employees happy and turnover low (Taylor, 2017). However, since many of its frontline employees are high school and college students, high turnover is a fact of life in fast food and finding the right staff that fits the corporate culture is always a challenge. This threatens consistency of quality and service level.

Conclusion

           In-N-Out Burger has a cult following and national brand awareness because of a strategic marketing plan that continues to succeed. The fact that the restaurant has not changed much since it was founded in 1948 by Harry and Esther Snyder (In-N-Out Burger, 2017)means the company has plenty of opportunity to grow as shown by the S.W.O.T analysis above. And if I was CEO (i.e. the King) of In-N-Out, the first thing I would do is add one (only one) chicken variation of the hamburger. I believe that would increase revenue and increase loyalty among customers.