Introduction
The purpose of analyzing the success story of Five Guys burger is to examine the milestones covered by Five Guys to establish the successful business in private enterprise system. The perfect business plan that Five Guys has includes drivers of change on the system, the ethical and social responsibilities that Five Guys developed towards its employees. Furthermore, a unique strategy of marketing “word of mouth” which helped Five Guys in establishing more than 1000 outlets across the nation instead of spending millions of dollar in advertisement.
Overall, this case study helps how an entrepreneur can run business by using out of box and simple solution to gain success in market. Five Guys’ philosophy setting apart from other fast food chains By careful reading of the Five Guys’ case study, I think quality product and customer satisfaction is the main philosophy of the Five Guys burger. According to Jerry Murrell “We need to concentrate on the quality of our product, and the satisfaction of the customers”.
Five Guys maintained its philosophy of quality product for instance freshly prepared bun, fat free meat and no corner cut fries. As mentioned in the case study “The meat for the burgers – 80 percent lean- is always fresh, never frozen and their plants so clean, you could eat off the floor”. While focusing on customer satisfaction, people use to come by and eat Five Guys burger because they think; the place where burger is made is very clean and tidy. Kitchen of Five Guys is always open to customer and if someone wants to see how his/her burger is being made, (s)he is more than welcome.
Landlord of a franchisee admired Five Guys by saying that we have Five Guys clean, friendly storefront and quality food in neighbors (Neil Janowitz, 2007). Secondly, customer like waiting for Five Guys burger because of its quality food.
Five Guys improved its customer satisfaction by serving peanuts to its customers. Five Guys started to distribute free, unshelled peanuts to placate waiting customers. The peanuts have become a Five Guys trademark (Roger, Y, 2009). I must say that above mentioned philosophy helped Five Guys a lot in developing such successful burger’ food chain that it clearly making a competition to all other renowned fast food chains like McDonalds, Burger King and Wendys. Original Values of Five Guys burger and how it remains strong today Two Original values which I found after a careful review of case study, I assume (a) quality food and (b) no advertisement. Mentioning the standard of quality food, Five Guys burgers are as fresh and juicy as they were when the first restaurant was opened in 1986.
They have same freshly baked bread every day since its opening. Similarly, potatoes are cut fresh every morning and fried in peanut oil; never greasy served in Styrofoam cup. Five Guys hired the person that baked the bread/bun for their first store, and made him a partner in the firm. They ensure that every store gets fresh bread every morning. Five Guys burger had a belief that people want to know that their money is used in providing quality food. A word of mouth strategy worked really well for Five Guys That’s why Five Guys don’t advertise to sell its product. Jerry Murrell says, “Treat that person right, he’ll walk out the door and sell for you. We were going to use our food to market our products”. (Roger, Y, 2009).
Three factors contributed Five Guys’ success
There are numbers of factors involved in contributing success to Five Guys business. I am going to mention only three of them.
* Quality food
* Simple menu
* No advertisement.
First factor plays an important role in the success. Simple menu, I think, is the key to success. Although, Five Guys tried to enhance or increase its menu by serving coffee and a chicken sandwich but it did not work, so they stop serving coffee and chicken sandwich. Likely, franchisees put pressure to add items, such as milkshakes but Five Guys did not accept it. “We’re the only burger chain that doesn’t have milkshakes. But we couldn’t possibly have a milkshake that comes of out of the machine” Jerry says (Roger, Y, 2009). Second factor quality of food is the heart core factor that contributed to the success of Five Guys burger. “Five Guys’ burger is better than McDonald’s,” says Tristano.
“Americans have always fallen in love with a better product “(Burke M, 2012). Speaking about quality food that offers Five Guys includes superior quality of meat, eighty percent lean, always fresh, never frozen at all. Potatoes always come from northern Idaho, because of weather condition they grow more slowly, solid and tasty in comparison to the potatoes grown in California or Florida, grow faster and are cheaper used by other fast food chains. Five Guys use anything but the best. Five Guys first soak fries in water so when the fries are per fried, the water boils, forcing steam out of the fry. This forma a seal so that when they get fried a second time, the fries don’t absorb any oil and so are never oily. “Fries are much harder than burgers” says Murrell. “We work day and night on them, all the damn time.” (Burke M, 2012).
Five Guys menu allows the chain to focus all its energy on executing its burger “perfectly” (Licata, E., 2009). Five Guys burger decided they would cook only in peanut oil, which cost five times as much as the oil, other burger restaurants were using (Lottie L., 2012). Finally, the factor is no advertisement, which I think contributed to the success of Five Guys. Five Guys burger had a belief that people want to know that their money is used in providing quality food. That’s why they don’t use advertisement to sell their product. Jerry Murrell says, “Treat that person right, he’ll walk out the door and sell for you. We were going to use our food to market our products” Jerry says. (Roger, Y, 2009).
Five Guys burger admits that they do things a little differently than most companies other fast food companies don’t, they put 3% of their revenue toward marketing or advertising. Five Guys burger simply don’t, they spent that money as a bonus to give their employees. “All of our employees at our stores, we pay them good money. I think that’s important” Murrell says. “Hire well-paid people and they’ll stay with you.” (Lottie L., 2012). Social and ethical practices of Five Guys burger
An organization is considered to be respectable because of its social and ethical policies it implemented within the organization. After a careful study, I think “No Marketing or advertisement” is one of the top social aspects of Five Guys. “He said anybody can be successful in the restaurant business if you serve a good product, (have a) friendly and clean atmosphere and reasonable price,” recalls Murrell (Lottie L., 2012). A word of mouth strategy worked really well for Five Guys. Five Guys used the strength of society in positive way and customer base is increased day by day on the recommendation of another customer. I think second aspect of social policy of Five Guys is selling its franchises.
This aspect helps middle class people to have their own small business which also helps in increasing the employment rate. More than 1700 stores reportedly been sold for future development into Five Guys outlets (Datamonitor, 2010) I think ethical aspect covers how an organization is beneficial for its employee. Most of the Organizations spent a fixed percentage of its revenue on marketing but Five Guys don’t do it. Five Guys spend that fixed percentage as bonus to employees. The Company has noted that it gives around $6m a year in bonuses to its employees. Murrell says its important to make employees feel a sense of ownership and accountability.
Five Guys has a policy to maintain high standard of customer service by employing mystery shoppers to regularly judge its outlets. This strategy positively appraises staff and keeps standard high. Five Guys send those secret shoppers twice a week to all locations, looking to catch staff delivering outstanding customer service. If they get a good score during the secret audits, they receive $1000 to divide amongst them, usually 5-6 people per crew. This is over and above the $8 or $9 an hour the crew makes, as a result crew feels happy and satisfied. Conclusion
This case study enables us to understand that business plan is very important in order to run a successful business. Business philosophy or company goal plays an important role in running the business successful. Businesses cannot flourish if higher management don’t have out of box solution or strategy. In this case study we have noticed that philosophy plays an important role along with the out of the box marketing strategy i.e. “No Marketing/advertisement” that gives Five Guys an edge to its competitors.
Reference
1. Janowitz, N. (2007). Five Guys sticks to burger-and-fries formula. Shopping Centers Today, 28(7), 32-33. 2. DATAMONITOR: Five Guys Case Study. (2010). Five Guys Case Study: Maintaining Growth in Fast Food with a Simple Menu & Quality Focus, 1-11. 3. Licata, E. (2009). FIVE
GUYS. Nation’s Restaurant News, 43(18), 58. 4. Lottie L., J. (n.d). Five Guys family keeps it simple. USA Today. 07/30/2012 5. Burke, M. (2012). Five Guys Burgers: America’s Fastest Growing Restaurant Chain. Forbes.Com, 26 6. Roger, Y. (n.d). Five Guys is simply successful. USA Today, 06/08/2009
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