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ProposedStrategicPlanforChickfilA.docx

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Proposed Strategic Plan

Colangelo College of Business, Grand Canyon University

MGT 660: Strategic Management

Dr. Henderson

July 5th, 2023

Table of Contents

Introduction ……………………………………………………………………………………….3

Current Vision Statement …………………………………………………………………………3

Proposed Vision Statement ……………………………………………………………………….3

Current Mission Statement ……………………………………………………………………….4

Proposed Mission Statement ……………………………………………………………………...4

Competitive Profile Matrix (CPM) ………………………………………………………………...

Financial Statements ………………………………………………………………………………

Ratio Analysis ……………………………………………………………………………………

Internal Factor Evaluation (IFE) Matrix ………………………………………………………….

External Factor Evaluation (EFE) Matrix …………………………………………………………

Proposed Strategies Developed from SWOT Matrix …………………………………………….

Strategic Position and Action Evaluation (SPACE) Matrix ………………………………………

Boston Consulting Group (BCG) Matrix ………………………………………………………….

Internal-External (IE) Matrix ………………………………………………………………………

Quantitative Strategic Planning Matrix (QSPM) …………………………………………………..

Recommendations ………………………………………………………………………………….

Explanations for Recommendations ………………………………………………………………

Organizational Chart ……………………………………………………………………………….

Perceptual Map …………………………………………………………………………………….

Firm Valuation …………………………………………………………………………………….

EPS-EBIT Analysis ………………………………………………………………………………..

Projected Financial Statements ……………………………………………………………………

Projected Financial Ratios …………………………………………………………………………

Retained Earnings Table …………………………………………………………………………..

Executive Summary ………………………………………………………………………………..

Introduction

S. Truett Cathy started an empire with a small restaurant called The Dwarf Grill (later renamed The Dwarf House) in 1946. Under the leadership of him and his brother the restaurant thrived and in 1967 Cathy opened the first Chick-fil-A in Atlanta, GA. (Chick-fil-A, n.d.). Based on Cathy’s strong religious beliefs, a culture was created to impact the lives of those they served. This philosophy was at the center of their vision statement, “to glorify God by being a faithful steward of all that is entrusted to us and to have a positive influence on all who come in contact with Chick-fil-A” (Borgogni, n.d.). Their commitment to this purpose is reflected in the fact that the vision statement has not changed since 1982 (Borgogni, n.d.). Cathy’s pledge to run a business based on his religious principles, disrupted the models at the time, by closing on Sundays to allow associates to attend church and support family time (Chick-fil-A, n.d.).

Chick-fil-A offered the first chicken breast served between two buns. The focus on quality is reflected in the name with the capital A standing for “grade A top quality” (Chick-fil-A, n.d.). Although the company has changed over the years, they have managed to stay true to their roots and drive to make positive impacts on their customers and community. With the highest ranking customer satisfaction numbers in the restaurant industry, Chick-fil-A’s revenue has increased since 2017 (Forbes, n.d.). This is further exemplified by their stringent franchising practices. Chick-fil-A is invested in more than growing their stores numbers. The long and in-depth process includes getting to know the candidate, including their previous work experience, leadership, financial health, and geographical preferences (Chick-fil-A, n.d.). They even state that a candidate should have strong ties to the community they will serve. 

The Chick-fil-A business model has proven to be successful over the years. Started six years after the McDonald brothers opened their restaurant, the Cathy’s have maintained it as a family owned business unlike McDonald’s. Their strategy and model regarding customer service is unrivaled in the restaurant industry. This includes their commitment to the communities they serve. When visiting a Chick-fil-A, their strategy and business model is clear to customers, considering interactions and attention to detail. This model stands out as unique considering how times have changed. Valuing impact over profits, Chick-fil-A has stayed true to their roots and created a thriving company.

Source:

Current Vision Statement

" To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A".

Source: https://www.chick-fil-a.com/careers/culture

Proposed Vision Statement

To be the world's most beloved and recognized quick-service restaurant, known for our delicious cuisine, superior customer service, and steadfast dedication to making a meaningful impact in our communities.

Current Mission Statement

"To be America's best quick-service restaurant at winning and keeping customers".

Source: https://empoweredleadership.com/blog/vision-and-mission-statement-comparison-chick-fil-a-vs-boeing

Proposed Mission Statement

At Chick-fil-A, we strive to provide our guests with high-quality cuisine, courteous and quick service, and a welcoming climate. We believe in respecting our employees and investing in their personal and professional development. We are dedicated to making a positive difference in the communities we serve by donating to education, hunger assistance, and other worthwhile causes. Our core principles of honesty, generosity, and hospitality inspire all we do, and we work hard every day to gain our consumers' confidence and loyalty.

Competitive Profile Matrix (CPM)

 

Chick-Fil-A

McDonald's

Popeye's

Critical Success Factors

Weight

Rating

Score

Rating

Score

Rating

Score

Customer service

0.15

3

0.60

4

0.60

3

0.45

Customer Loyalty

0.15

3

0.45

4

0.60

4

0.60

Organization Structure

0.05

3

0.10

2

0.10

1

0.05

Advertising

0.05

4

0.15

2

0.10

2

0.10

Delivery Time & Cost

0.05

3

0.10

3

0.15

4

0.20

Glodal Expansion

0.05

4

0.15

4

0.20

3

0.15

Sustainability

0.05

3

0.15

4

0.20

4

0.20

Sales Growth

0.10

3

0.30

4

0.40

4

0.40

Price Competitiveness

0.10

3

0.40

4

0.40

4

0.40

Product Quality

0.10

4

0.40

4

0.40

3

0.30

E-Commerce

0.15

2

0.30

3

0.45

4

0.60

Totals

1.00

 

3.10

 

3.60

 

3.45

Financial Statements

Ratio Analysis

 

Historical Ratios

 

12/31/2021

 

12/31/2022

Current Ratio

2.17

 

1.94

Quick Ratio

2.15

 

1.90

Total Debt-to-Total-Assets Ratio

0.59

 

0.54

Total Debt-to-Equity Ratio

2.50

 

0.47

Times-Interest-Earned Ratio

26

 

21

Inventory Turnover

26.80

 

20.82

Fixed Assets Turnover

0.48

 

0.46

Total Assets Turnover

0.39

 

0.38

Accounts Receivable Turnover

25

 

32

Average Collection Period

14.35

 

11.29

Gross Profit Margin %

89%

 

83%

Operating Profit Margin %

40%

 

34%

ROA %

12%

 

10%

ROE %

52%

 

9%

Internal Factor Evaluation (IFE) Matrix

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External Factor Evaluation (EFE) Matrix

Strengths

Weight

Weight

Rating

1

Strong Political Stance

0.04

3

2

Closed on Sundays

0.03

2

3

Strict Franchising process

0.03

4

4

Product Quality

0.05

3

5

Customer Service

0.06

4

6

Community Involvement

0.05

3

7

Employee Engagement

0.07

3

8

Consistency across stores

0.04

3

9

Focus on area of excellence

0.05

3

10

Web Presence (Brand Image)

0.05

2

Weaknesses

Weight

Rating

1

Limited Menu Choices

0.08

2

2

Closed on Sundays

0.04

1

3

Lack of presence in global market

0.07

2

4

Price point

0.06

2

5

Geographic Coverage

0.03

1

6

Strong Political stance

0.05

1

7

Rising Cost of supplies

0.05

2

8

Strict Franchising Process

0.05

1

9

Fried food options with focus on healthy diets

0.05

3

10

Lack of innovation

0.05

2

Total Weight (Must Equal 1.00)

1.00

Proposed Strategies Developed from SWOT Matrix

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Strategic Position and Action Evaluation (SPACE) Matrix

FP

SP

IP

IPIP

Defensive

Conservative

Aggressive

Competitive

CP

 

Chick-Fil-A

0

0

X Axis

-0.2

2.0

-1.0

Y Axis

1.2

3.0

3.0

Internal Analysis:

 

 

 

External Analysis:

 

 

 

Financial Position (FP)

 

 

Stability Position (SP)

 

 

Current Ratio

5

Rate of Inflation

-4

Debt to Equity

7

Technological Changes

-3

Net Income

2

Price Elasticity of Demand

-5

Revenue

3

Competitive Pressure

-2

Inventory Turnover

5

Barriers to Entry into Market

-2

Financial Position (FP) Average

4.4

Stability Position (SP) Average

-3.2

Internal Analysis:

 

 

 

External Analysis:

 

 

 

Competitive Position (CP)

 

 

Industry Position (IP)

 

 

Market Share

 

 

-6

Growth Potential

 

 

1

Product Quality

 

 

-3

Financial Stability

 

 

2

Customer Loyalty

 

 

-4

Ease of Entry into Market

 

4

Variety of Products Offered

 

-2

Resource Utilization

 

 

5

Control over Suppliers and Distributors

-1

Profit Potential

 

 

3

Competitive Position (CP) Average

-3.2

Industry Position (IP) Average

3.0

Boston Consulting Group (BCG) Matrix

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Internal-External (IE) Matrix

THE IFE TOTAL WEIGHTED SCORES

Strong

Weak

4.0

1.0

High

4.0

THE EFE WEIGHTED SCORES

Low

1.0

Division

Firm's Division Revenues

Estimated IFE Score

Estimated EFE Score

 

 

Chicken Sandwich Division

$600

3.8

3.9

Catering Division

$570

2.8

3.2

Licensing Division

$42

2.2

2.9

International Division

$180

3.2

3.0

Digital Division

$350

3.0

3.2

Quantitative Strategic Planning Matrix (QSPM)

 

 

 

market development strategy; internationalize into China and Australia where data suggests they would be receptive to the brand

market penetration strategy; increased marketing to increase market share within the US

 

 

 

Strengths

Weight

AS

TAS

AS

TAS

1

customer service

0.08

2

0.16

4

0.32

2

chicken vs beef

0.03

1

0.03

4

0.12

3

restaurant ambiance

0.06

3

0.18

4

0.24

4

face to face ordering

0.06

3

0.18

4

0.24

5

employee engagement

0.07

4

0.28

2

0.14

6

marketing strategies

0.04

1

0.04

4

0.16

7

community outreach

0.04

4

0.16

3

0.12

8

internet presence

0.04

3

0.12

4

0.16

9

collaborative culture

0.06

3

0.18

4

0.24

10

yearly revenue growth

0.04

3

0.12

4

0.16

 

 

 

market development strategy; internationalize into China and Australia where data suggests they would be receptive to the brand

market penetration strategy; increased marketing to increase market share within the US

 

 

 

Weaknesses

Weight

AS

TAS

AS

TAS

1

lack of global presence

0.03

4

0.12

1

0.03

2

number of restaurants

0.03

3

0.09

2

0.06

3

operational days (closed on Sundays)

0.05

3

0.15

2

0.10

4

Franchising rules and regulations

0.07

1

0.07

2

0.14

5

Sales performance in relation to political/ social concerns

0.07

4

0.28

2

0.14

6

employee retention / candidate pool in relation to political / social concerns

0.05

4

0.20

2

0.10

7

public image in light of activists

0.07

4

0.28

2

0.14

8

higher prices in relation to other fast-food chains

0.03

2

0.06

1

0.03

9

limited menu choices

0.03

4

0.12

2

0.06

10

supply chain disruption

0.05

1

0.05

2

0.10

 

 

 

market development strategy; internationalize into China and Australia where data suggests they would be receptive to the brand

market penetration strategy; increased marketing to increase market share within the US

 

 

 

Opportunities

Weight

AS

TAS

AS

TAS

1

political stance

0.04

4

0.16

1

0.04

2

closed on Sundays

0.03

4

0.12

3

0.09

3

strict franchising process

0.03

2

0.06

4

0.12

4

product quality

0.05

2

0.10

4

0.20

5

customer service

0.06

3

0.18

4

0.24

6

community involvement

0.05

3

0.15

4

0.20

7

employee engagement

0.07

3

0.21

4

0.28

8

consistency across stores

0.04

3

0.12

4

0.16

9

focus on area of excellence

0.05

3

0.15

4

0.20

10

web presence (brand image)

0.05

3

0.15

4

0.20

 

 

 

market development strategy; internationalize into China and Australia where data suggests they would be receptive to the brand

market penetration strategy; increased marketing to increase market share within the US

 

 

 

Threats

Weight

AS

TAS

AS

TAS

1

limited menu choices

0.08

4

0.32

3

0.24

2

closed on Sundays

0.04

2

0.08

4

0.16

3

lack of presence in global market

0.07

2

0.14

3

0.21

4

price point

0.06

1

0.06

3

0.18

5

geographic coverage

0.03

1

0.03

3

0.09

6

strong political stance

0.05

4

0.20

2

0.10

7

rising cost of supplies

0.05

4

0.20

2

0.10

8

strict franchising process

0.05

0

0.00

0

0.00

9

fried food options with focus on healthy diets

0.05

4

0.20

3

0.15

10

lack of innovation

0.05

2

0.10

1

0.05

 

TOTALS

 

 

5.60

 

5.81

Recommendations

Explanations for Recommendations

Organizational Chart

Perceptual Map

high price

excellent customer service

poor customer service

low price

Firm Valuation

EPS-EBIT Analysis

Projected Financial Statements

Projected Financial Ratios

Retained Earnings Table

Executive Summary

Chick-Fil-A -0.20000000000000018 1.2000000000000002 1 2 3 1

-1 3 1 Chick-Fil-A 0 0 1 Chicken Sandwich Division

3.8 3.9 600 Catering Division

2.8 3.2 570 Licensing Division

2.2000000000000002 2.9 42 International Division

3.2 3 180 Digital Division

3 3.2 350 Chick-fil-A 9 8 1 KFC 5 5 1 Popeyes 2 3 1 1 1 1 1 1 1 1

10

1

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