Wendy\'S Market Analysis final PDF

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Wendy’s COMPANY PROFILE

By: Manisha 300166813

Introduction The Wendy’s company is an international chain of fast food restaurants. It offers variety of products such as chicken sandwiches, hamburgers, salads, chili, variety of baked potatoes, chicken nuggets, chicken strips, chicken snack wraps, cheeseburgers, French fries, soft drinks and frosty. Wendy’s operate in a highly competitive quick service market. In February 2020, Wendy’s introduced new plantiful burger in its menu. Wendy’s was founded in 1968 by Dave Thomas in Columbus, Ohio. The company’s headquarters is in Dublin, Ohio. Wendy's is well recognized for its square hamburgers made to order, using fresh, unfrozen beef *, freshly prepared salads with hand-cut lettuce and other signature products such as chilli, baked potatoes and sea salt fries. The current CEO Wendy’s have a total of 6800 restaurants worldwide. 6446 of these restaurants are franchised and rest 354 restaurants are operated by company. The first restaurant of Wendy’s in Canada was opened in Ontario in 1976. Wendy’s account for a total of 384 restaurants in Canada and 52 of them are in British Colombia. Wendy’s is 50% partner with Tim Hortons in a Canadian restaurant real estate joint venture. So, Wendy’s and Tim Horton own combined units in various locations in Canada. Wendy’s restaurants have total 12500 employees worldwide and in Canada has 5500 of total employees. Wendy’s generated $256.51 million in sales (USD) in 2019. Wendy’s was the third largest hamburger fast food chain in December 2018. The company is listed on NASDAQ. The financial year end of Wendy’s is in December. I choose to do the market analysis about Wendy’s because I recently started working there and I wanted to find out more about the my workplace.

SWOT Wendy’s is impacted by number of internal and external factors such as labour cost, price competition

Strength

Weakness

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High quality menu offering

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High prices

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Strong brand name/ goodwill

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Franchising

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Business experience

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Perishable stock

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Restaurant marketing

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Low employee satisfaction

Opportunities

Threats

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Increasing demand of fast food

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Meat consumption

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Growing eating out customers

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Competition

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Introducing breakfast

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Rising labour cost

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Digital order taking

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Change in preferences of customers

STRENGTHS The company offers vide range of products in its menu. The menu in Canada includes hamburgers, freshly made salads, sea salt fires, chicken and wraps, lemonades, frosty and kid meals. Wendy’s offer 12 different kinds of hamburgers, 6 types of salads, 3 kinds of chicken sandwiches, 4 kinds of baked potatoes, 4 types of French fries, nuggets and frosty desserts. Wendy’s have value menu, combos and meal deals. The company also introduced products based on seasons such as berry burst salads which comes every summer. Wendy’s have built a good image than most of its competitors as their primary selling focus is on better quality, enhanced taste and freshness of preparing food. Wendy’s also

prioritise customer management relationship which have increased customer satisfaction over the past years. It has also built a strong culture amongst its dealers because of which they help in promoting the company’s product. Due to expansion of the company, Wendy’s have developed expertise in handling business in new markets and make profits in such emerging markets. Wendy’s is very active on social media which is the most used way of promoting in these days. Wendy’s operate its various social media portals on Instagram, Facebook and Twitter where various market campaigns are carried out successfully.

WEAKNESS Wendy’s have higher prices for its products than compared to its competitors. Wendy’s claim to provide better quality burgers which are healthier than its competitors, but the premium beef burger have a starting price of $6-$8. Though Wendy’s have a value menu which offers value prices of various items and kid meals, but due to shortening of beef patties for the value menu because of COVID-19, Wendy’s is out of these items from the month of April. The company is only serving the bigger beef burgers starting at $6 due to which it has lost many customers. Wendy’s is focus on refranchising their stores which can result in reducing the brand quality. Due to franchising the company will only earn profit from margin of franchisee royalties which might not be high all the time. Moreover, most of the inventory used in Wendy’s is highly vulnerable to decomposition. During this time of COVID-19, the sales cannot be predicted so the management of the unused goods is very difficult as they must use fresh ingredients. Low employee satisfaction is one of the major weakness of the company. The paid time off is only given to the managers and not to any crew members. During this global pandemic, the wages of the staff are not increased they are still only paid minimum wages and the shift hours are cut off. This has led to decrease in employee satisfaction.

Opportunities

The fast food restaurants industry in Canada has increasing demand over the five years (2015-2020). By modifying the menu according to the customer wants and providing customer with more satisfaction in less prices can help the company to acquire more share in the market than its competitors. Wendy’s in Canada do not have any breakfast menu, launching the breakfast menu can help the company to improve the growth opportunities. The competitors of Wendy’s such as McDonald already have breakfast menu and is an industry leader with 27% sales in breakfast. Although Wendy’s have breakfast menu in U.S. but launching it in Canada can help it to improve it sales as many customers demand for it as it is convenient. The digital sales of Wendy’s only account to 3% of its sales. As digital ordering and delivering is rapidly boost up the sales in digital sector. The new and up to date technology which provide effortless order taking can enhance the experience of quick service fast food restaurants for the customers. Due to COVID-19, 2020 started with a lockdown as a reason many people were not able to leave their homes. As the situation of Canada is improving many people are going out to eat. This can boost up the sales of the company if they provide offers better than their competitors and improve customer experience more.

Threats Wendy’s is more famous for its bacons and beef burgers. Many Asian countries are against eating pork and beef. Canada being a multicultural country with 3.8% of permanent Indian residents and 56% of foreign students being from India and china, it can affect the image of the company in long run.

The minimum wage rate is increasing due to COVID-19 which will increase the labour cost. Wendy’s might have to increase the prices of the products, cut off hours or lay off some of its employees so that they do not lose any profit. These will contribute in both employees and customer dissatisfaction which can harm company image. Fast food restaurant industry is highly competitive. Burger King and McDonald are the two biggest competitors of Wendy’s. the intense competition can put high pressure on the company. The large number and rising fast food restaurants can also prove to be a threat for Wendy’s company. Although, many resources are spent on the market researchers, predicting the consumer preferences is difficult during this time. Trends keeps changing very quickly. Nowadays people are mostly focused on healthy eating and using dietary products. Fast food is generally considered unhealthy and a reason for obesity due to which these consumer preferences can pose as a threat to Wendy’s.

Target market Wendy’s is a business that sells it products directly to the consumers. Wendy’s uses the following places to distribute its products: 

Outlets

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Kiosks

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Online Website

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Mobile application

Wendy’s target market is based on demographic in which they target younger population (millennials and young professionals). Wendy’s is trying to evolve and transform so that they can attract more young adults. Social media have become the most effective platform to drive consumers and connect with them. Wendy’s are also attempting to attract the generation Z by offering kid meals with free toys. Wendy’s uses enhanced technology and digital marketing. For the TV commercials, Wendy’s choose a red-haired spokeswoman who is also a millennial. Wendy’s uses various mediums such as social media, digital promotions and mobile marketing through its app. The company also uses Facebook promotions to promote its new products. Wendy’s Canadian project creates series on YouTube titled “Girlfriends at Wendy’s Eating Salad & Talking About Stuff” which also features millennial women. Wendy’s has about 740000 twitter followers and 5.8 million Facebook likes. Although millennials and boomers have very different preferences, Wendy’s tries to modify its menu so that it can attract both the generations. By using the mobile apps, the orders can be placed ahead of time and the waiting line can be skipped easily. Due to which the introduction of the digital orders and mobile app have helped to attract more millennials. Also, most of these young consumers want to eat fresh and healthy. So, Wendy’s try to make food fresh by using better ingredients so that they can keep up with the trend.

Types of Products and Services Wendy’s serves variety of end use consumer products which are brought by the final consumer for their own use. These products are tangible, non-durable goods which are perishable. Wendy’s in Canada serves the following products:  

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DESSERT - CHOCOLATE FROSTY KIDS MEALS - 4-PIECE NUGGETS MEAL -

KIDS HAMBURGER MEAL

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KIDS’ CHEESEBURGER

HAMBURGERS - 1/4 SINGLE -

1/2 DOUBLE

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3/4 TRIPLE

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BACONATOR

- SON OF BACONATOR - CHEESY CHEDDAR BURGER - JR. HAMBURGER DELUXE - JR. CHEESEBURGER DELUXE - JBC (JR. BACON CHEESBURGER)  

SOFT DRINKS MILK - CHOCOLATE MILK -

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WHITE MILK

SALADS - APPLE PECAN -

GRILLED CAESAR

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SOUTHWEST AVOCADO

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TACO SALAD

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SIDE GARDEN

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SIDE CAESAR

CHICKEN WRAPS AND SANDWICHES - SPICY CHICKEN -

HOMESTYLE CHICKEN

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GRILLED CHICKEN

SIDES - APPLE JUICE -

ORANGE JUICE

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COFFEE

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TEA

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WATER

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CHILI

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BAKED POTATO

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LEMONADE

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APPLE SLICES

Channels of Distribution https://www.qsrweb.com/news/wendys-recognizes-top-suppliers-and-distributors/

Wendy’s channels of distribution are managed by QSCC (quality supply chain co-op) which manages distribution centres for Wendy’s in Canada.

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The coca cola company has partnered up with Wendy’s for more than 25 years. Coke offers Wendy’s with various product and services z

Most of the raw material of Wendy’s is from American farmers and ranchers.

Promotional Strategies Being one of the leading hamburger fast food restaurant, Wendy’s uses various strategies to promote its products. Wendy’s uses the following techniques to connect with its target market: Wendy’s have incredible social media strategy to attract its customers. Wendy’s has a very professional team which are known for their funny responses that provide customer

service on social sites. The Wendy’s team is highly responsive on Twitter which makes the customers happy. They respond to the tweets quickly and investigated the complaints of the customers. Wendy’s team try to solve the issue as soon as they can. Wendy’s is very active on social media and post quite frequently which have helped to build a loyal following. Advertising is the primary strategy used by Wendy’s for the promotion. Tv, print media, online sites are the different mediums through with the company promotes itself. Commercials and various radio ads are used to promote the products. Whenever a consumer visit Wendy’s, the staff always ask them to try out a new product. The brand voice of Wendy’s is different from its competitors as its clever and funny. Wendy’s is consistent on social media which keeps the audience engaged. In 2019, the chain decided to invest around 24 million so that they can build a more strong digital platform for the promotion. This personal selling technique help to encourage customers to buy more. Wendy’s also uses public relation to promote its products by sponsoring community events. Wendy’s also use sales promotion and the value menu is the part of this strategy which provide quality product at very low prices. Wendy’s provides its service directly to the consumers through its stores. Wendy’s open its outlets at the places where it is convenient for people to access the services and there is a continuous flow of consumers. Most of the Wendy’s outlets are at or near universities, hospitals, entertainment venues, offices or airports. The in-store of Wendy’s is very well maintained and cleaned with touchless features included.

Socially Responsible Behaviour Wendy’s run The Dave Thomas Foundation for Adoption (DTFA) which is public nonprofit charity and is focused on foster care adoption. The funds raised by the foundation were more than $15 million in 2019. Wendy’s partnered up with snapchat use CauseCups’, when a customer use to snap Wendy’s cup logo it would launch a special online

experience and automatic donation of $5 was made from Dr. Pepper and Coca-Cola to DTFA. Wendy’s took the initiative to use fresh produce and turned to hydroponic vine ripened tomatoes. By 2019, every outlet of Wendy’s in Canada was using hydroponic greenhouse tomatoes. The greenhouse helps to make efficient use of water and hardly use any pesticides. In March 2020, they also introduced hydroponic greenhouse lettuce, which reduced the waste and is environment friendly. Wendy’s have become one of the first restaurants to setup animal welfare focused policy and establishing principles for animal care. Under this policy they reduce or eliminate the use of antibiotics. In 2020 they launched ACSP (Animal Care Standards Program) under which they use comprehensive tools for testing of beef and pork. In 2019, Wendy’s also introduced Squarely Sustainable Initiative guide to: 

Use less

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Use better

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Spark action

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Engage partners

They put these efforts in the areas like minimising food waste by not ordering more than they need and using fresh ingredients. To reduced water use they have two franchise which has primary goal to reduce water use over a 10-year period. The one acre of tomatoes grown in the greenhouse replaces 20-acre of traditional field grown tomatoes. They also put these efforts to substantial sourcing and packaging by reducing the packaging footprint and energy and emissions by using fewer material and less land.

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