The aim of the report is to create a long-term strategic plan for the Chick-fil-A Company and the details related to the company have been discussed in the case study. The report includes the environment analysis which creates an impact on the working and decision making of the company. Furthermore, it includes the analysis of the external factors and the internal factors as managers perform the analysis related to both external and internal factors.
CFA (Chick-fil-A) is the southern U.S. privately held restaurant chain with headquarters in Atlanta Georgia. The company acquired 13th rank for quick-serve restaurant franchises in the U.S. the restaurant was founded by Samuel Truett Cathy. The products that are offered by the company include chicken sandwiches, milkshakes and some sort of different recipe (Chick-fil-A, 2018).
Technological Trends- Company doesn’t have any distinct or visible technological advantages that can make the operations of company different from its competitors. CFA can also make use of upgrading technology for promoting the products in the market (MBA Skool, 2018).
Demographic Trends- CFA customers are more affluent, more active and more educated as compared to its competitors. The customers of Chick-fil-A website were more likely to be female between the ages of 25 and 44 with the income of $100,000–$150,000. Most of the people who visit restaurant are the college students who belong to Caucasian ethnicity (Hitt, Hoskisson & Ireland, 2014). If in case the preference of these people fluctuates then they won’t be able to make an appropriate profit.
|
Demographic |
Percentage of Customers |
|
Age |
|
|
18 and under |
18% |
|
18–24 |
11% |
|
25–34 |
22% |
|
35–44 |
24% |
|
55–64 |
7% |
|
65+ |
3% |
|
Gender |
|
|
Male |
43% |
|
Female |
57% |
|
Household Income |
|
|
$0–$50,000 |
13% |
|
$50,000–$100,000 |
26% |
|
$100,000–$150,000 |
31% |
|
$150,000+ |
30% |
|
Education |
|
|
No College |
38% |
|
College |
47% |
|
Grad School |
15% |
|
Ethnicity |
|
|
Caucasian |
74% |
|
African American |
16% |
|
Asian |
4% |
|
Hispanic |
5% |
|
Other |
1% |
Economic Trends- Economic trend reflect the GDP, inflation, unemployment rate, the purchasing power of the customers and many other. U.S GDP growth will increase to 2.5% in the year 2018. The expected GDP growth rate will be 2.1% in 2019 and 2.0% in the year 2020. Apart from this, the unemployment rate will drop to 3.9% in 2018 and 2019 but it may rise in the year 2020 by 4.0% (Amadeo, 2018). The rise in the GDP gives an opportunity for the company to enhance the profit and sales of the company.
Political/Legal Trends- The political and legal factors include the acts and regulations formed by the government that create an impact on the decision of the company. The acts formed by the US work as a huddle for the company while expanding the business. CFA follows the acts and regulations introduced by the government.
Sociocultural Trends- The changes in the sociocultural trends might impact the restaurant and its working. Most of the people visit restaurants on weekends as it became the social trend for them. Though, the culture of US motivates the people to consume healthy products which might change their preferences for products (Grant, 2016).
Global Trends- The changes in the foreign country creates an impact on the working of CFA as the company has its operations in Mexico, Puerto Rico and Canada. Most of the people across the world are becoming health conscious due to which the sales of restaurants are declining.
Physical Environment Trends- CFA Company committed its responsibility towards the environmental sustainability journey. The company boasted a number of green initiatives that consist of retrofit 900 restaurants in the year 2012 with the energy efficient lighting, refrigeration, and water saving technologies (Hitt, Hoskisson & Ireland, 2014). The company also took a step for recycling of the cups in California locations along with this company is planning to add a new place to it. Through, this company is able to accomplish its responsibility towards the society.
The CFA Company falls under the food and beverage industry and this industry is one of the growing industries across the world. The profits in the “Food & Beverages” segment amounts to the US $16,557m in 2018. In the U.S the user penetration is at approximately 40.9% in 2018 and is predicted to hit 48.2% in 2022 (Statista, 2018). This reflects that industry is expected to rise but it might fall as well because maximum numbers of people are becoming health conscious in U.S (Nicolopoulos, 2018).
The major competitors of the company are McDonald’s, Popeye’s, Burger King and KFC. CFA found a rise in the sales of the company comparing it with the other companies along with this CFA ranked second among U.S. quick-service chicken restaurants. KFC continues to cede a lot of market share to privately held CFA. In the year 2010, CFA Company surpassed Popeye’s, McDonald’s and burger king in total sales growth with the same-store sales growth in spite of having far fewer locations and closing its outlets 52 days every year. CFA gave strong competition to its competitors with the help of strong customer base (Hitt, Hoskisson & Ireland, 2014).
|
Strength |
· The company has a strong presence in the market with 320 locations in the mall with 1000 stand-alone locations in January 2013. The growth focus of the company was in Southern California and Midwest. · The company makes use of the effective advertisement campaign due to which the company has the second largest market share in the chicken restaurant market. In 2009, the chain invested $27 million on advertisement media (Hitt, Hoskisson & Ireland, 2014). |
|
Weakness |
· The company has slow and steady growth in the international market. · Less number of outlets comparing it with the competitors. |
|
Opportunity |
· The company is getting numerous numbers of proposals for the franchises every year (Amason, 2011). · The company is involved in the sponsorship of college athletics in football so the company can utilize the opportunity for the successful and effective advertisement (Meister, Parker, Slaughter & Underwood, 2012). |
|
Threats |
· The competitors (McDonald’s, KFC, Popeyes and many others) of the company are the biggest threat to the company (Hitt, Hoskisson & Ireland, 2014). · CFA finds a threat if in case the franchises policies of the company are not followed by the franchisers. |
Strategy Formulation is the process of developing the strategy and this is the procedure through which the chose the appropriate strategy to accomplish the goals. CFA should expand the business in numerous countries internationally (Karami, 2012). The company should bring some changes in their strategy as CFA did not offer any kind of frequent buyer card, the company should provide the card so that they will be able to form the good connection with their customer and can also promote their brand effectively. The company can also provide the training to their staff so that they can perform their activities effectively.
The strategic action plan includes what actions can be taken by the company for implementing the particular strategies.
|
Strategies |
Start time |
End time |
Duration |
|
Selecting the country for expansion |
Jan 2018 |
March 2018 |
3 months |
|
Identifying the customer needs and opening the outlets |
April 2018 |
June 2018 |
3 months |
|
Providing frequently buyer card |
July 2018 |
September 2018 |
3 months |
|
Training to employees |
October 2018 |
December 2018 |
3 months |
Conclusion
The report is based on the case study of Chick-fill-A, a well-known restaurant chain. The report includes the analysis of the company that helps the managers of the company in forming the strategies to face the competitors. It also includes the general environmental and industry analysis that helps the company in identifying the impact on working of the business.
References
Amadeo, K. (2018). US Economic Outlook: For 2018 and Beyond. Viewed on 10th February 2018, https://www.thebalance.com/us-economic-outlook-3305669
Amason, A. (2011). Strategic management: From theory to practice. Routledge.
Chick-fil-A. (2018). Food. Viewed on 10th February 2018, https://thechickenwire.chick-fil-a.com/Food
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hitt, M.A., Hoskisson, R.E & Ireland, R.D. (2014). Strategic Management: Competitiveness & Globalization: Concepts & Cases. 11th edition. Cengage Learning.
Karami, A. (2012). Strategy formulation in entrepreneurial firms. Ashgate Publishing, Ltd..
MBA Skool. (2018). Chick-fil-A SWOT Analysis, USP & Competitors. Viewed on 10th February 2018, https://www.mbaskool.com/brandguide/food-and-beverages/3344-chick-fil-a.html
Meister, M., Parker, E., Slaughter, J. & Underwood, J. (2012). Situational Analysis and Marketing Strategy. Viewed on 10th February 2018, https://emmabparker.files.wordpress.com/2012/04/chick-fil-a.pdf
Nicolopoulos, J. (2018). Top 5 trends for food and beverage industry businesses in 2018 (Video). Viewed on 10th February 2018, https://www.bizjournals.com/boston/news/2018/01/29/top-5-trends-for-food-and-beverage-industry.html
Statista. (2018). Food & Beverages. Viewed on 10th February 2018, https://www.statista.com/outlook/253/109/food-beverages/united-states#
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