Chick-fil-a’s External Environment Analysis Research Paper (Research Paper Sample)

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Chick-fil-a’s External Environment Analysis
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Table of Contents TOC \o "1-3" \h \z \u Introduction and Background PAGEREF _Toc478309322 \h 32.0 PEST Analysis PAGEREF _Toc478309323 \h 42.1 Political. PAGEREF _Toc478309324 \h 42.2 Economic. PAGEREF _Toc478309325 \h 42.3 Society and Culture. PAGEREF _Toc478309326 \h 42.4 Technological. PAGEREF _Toc478309327 \h 43.0 Competitor Analysis and Promotion Strategy PAGEREF _Toc478309328 \h 53.1 Introduction. PAGEREF _Toc478309329 \h 53.2 Comparison. PAGEREF _Toc478309330 \h 53.3 Secondary Competitors. PAGEREF _Toc478309331 \h 64.0 Target Market Analysis & Segmentation PAGEREF _Toc478309332 \h 6Target Market. PAGEREF _Toc478309333 \h 64.2 Strengths and Weaknesses of Target Market. PAGEREF _Toc478309334 \h 74.2 Recommended Target Market. PAGEREF _Toc478309335 \h 7
1.0 Introduction and Background
Chick-fil-a’s headquarters is located in Atlanta, Georgia; it is the leading quick-service chicken restaurant in America. Though the chain is concentrated in the south, it has restaurants in 42 states and a total of 1700 locations including new locations like Manhattan, New York. Chick-fil-a first restaurant was established in 1967 in Atlanta by Truett Cathy CITATION Chi17 \l 1033 (Chick-fil-a, 2017). Cathy built the company around his family. The company is now being handed over to the third generation of the family. Since it was founded, it has managed to increase sales for 45 consecutive years. The increase in the beginning was credited with the invention of first chick nugget concept and boneless breast sandwich. Currently, it is credited with their excellent customer service and food quality. Chick-Fil-a serves notorious and fresh food products. Chicks is a private company and are not publicly traded, it began to franchise in 1986 and requires roughly 5,000 dollars to operate one.
Chicks menu includes sandwiches, chicken entrees, fresh lemonade, waffle fries. Salads and dessert served with combo meals. Chick-Fil-A serves communities through mall-based locations, buildings with a drive-through, and is also licensed to schools and airports. Its trademark products entail cool wrap, southwest, chargrilled salad, and original chicken sandwich. Their prices range from small fries for 1.34 to an original sandwich for 2.75; combo meals are available for 5.39 CITATION Lin14 \l 1033 (Linshi, 2014). Chick-Fil-A also has a kids Meal programs that include activities to educate kids on language, math, and art skills and provides healthy alternatives to soda and fries.
Chick-Fil has grown massively over the last 30 years; it growth can be merited to their emphasis on product quality. The company advertises using its signatures cow where cows attempt to convince consumers to eat more “chickin” (as spelled by the cows) or chicken. Chick-Fil-A does most of it advertising on network TV, but also spend a significant amount on spot and cable TV.
Chicks mission is “to glorify God by being a faithful steward of all that is entrusts to us, and to have a positive influence on all who come in contact with Chicks.” Chicks achieve its mission through corporate sponsorships, which portray its core value in making a positive impact on company’s community and the environment. The company also run a WinShape foundation that helps keeps with homes, scholarships, and camps. Chick sponsors Chicks Kickoff Game, Chick-Fil-A Bowl CITATION Chi17 \l 1033 (Chick-fil-a, 2017).
Chicks is only well known in the southern region of the US. However, the company is slowly expanding to other regions. In order to continue its growth and maintain strong competitiveness in the chicken quick-service industry, Chicks needs to spread much faster into others regions.
2.0 PEST Analysis
2.1 Political. Gay Marriage – Both. Chicks are known for its conservative culture and quality food, and when the founder opposed gay marriage publicly, there was a protest at the store for and against ChicksCITATION Tay22 \l 1033 (Taylor, 2016). This is both an advantage and disadvantage. A brand is more memorable and appealing when there is an emotional connection with the consumers.
FDA - Threat. FDA is the administration responsible for public health regulations; its role is to protect the country food supply. With thousands of restaurants serving millions on a single day. FDA ensures the food is safe from small, fast foods to franchise stores. In order for Chicks to continue doing business, they need always to ensure they comply with regulations set by the FDA.
2.2 Economic. Interest rates- Both. High-interest rates mean customers don’t have much of their income left. Therefore they cut down on their spending. High-interest rates also lead to farmers spending less on equipment resulting in less production.
Employment rates – Both. When unemployment is high, Chicks may lose customers to competitors like McDonald’s. Lack of employment will mean a good number of customers will lose their jobs and will not be able to afford their high prices and vice versa when the economy improves CITATION Hay16 \l 1033 (Peterson, 2016).
2.3 Society and Culture. Community involvement- Opportunity. Chicks locations like to get involved in community events; many Chicks locations hold several special events that bring families together. Chicks implement a common marketing strategy that is based on attracting kids who eventually attract parents to come and spend. Chicks sponsor two football games, the Chicks Bowl and the Chicks Kickoff Game.
2.4 Technological. App- Opportunity. As though fast food wasn’t fast enough, Chicks has plans to make their customer experience much faster and more personal. They have introduced an App that lets users bypass lines. After placing an order on the app, customers receive an alert when their food is ready. The more customers use the app; the more treats are sent their way, having the app installed also earns additional rewards.
Social media – Opportunity. Chicks can target healthier hipster style market by use of social media. Chicks have used the same advertising scheme since 1995 CITATION Chi17 \l 1033 (Chick-fil-a, 2017). The cow character has become associated with Chicks. Chicks can use social media such as Twitter, Facebook, and Instagram to introduce the cow character to new generations and potential customers.
3.0 Competitor Analysis and Promotion Strategy
3.1 Introduction. KFC was founded by Colonel Harland Sanders in Louisville, Kentucky in 1953. KFC market share is estimated to be around 30% which has been decreasing over the years CITATION Tay22 \l 1033 (Taylor, 2016). KFS serves 12 million people in 109 countries in a single day. They specialize in extra crispy, Kentucky grilled chicken original recipe. KFS best seller is the original recipe fried chicken which is made from Colonel Sanders blend of 11 spices and herbs. The recipe is unchanged since the chain began. Kentucky grilled chicken combo or an original two-piece recipe is 5.97. the combo comes with a drink, a side, and the sandwich. Customers are able to pick from 300 items available on menus around the globe. KFC is the first fast food to introduce recyclable food take-out containers. The company follows the slogan “reuse, renew, rejoice.” The containers are microwavable, dishwasher safe, and Tupperware-style.
KFC has spent more than 100,000 hours re-training employees. It held 43 rallies all over the US that were attended by the majority of restaurant managers and also held training events in all their locations in the US. KFC taste scores have increased significantly in all locations, evidence that their re-colonization strategy is working. The process has increased customer satisfaction and interest. KFC is also implementing subtle methods of boosting customer service and employee performance. The chain plans to redesign the majority of its 3000 restaurants in the US in the next 3 years after redesigned locations reported decreased turnover. Redesigned locations also encourage more application CITATION Tay22 \l 1033 (Taylor, 2016). Most of the brand innovation are focused on the employees and not customers. Digital innovations help employees restock, schedule shifts, and calculate the distance from work to improve timeliness.
3.2 Comparison. Chicks sell 3 times as much as KFC, and this is the reason it is first in chicken QSR rankings. In 2014 Chicks recorded 3.1 million sales per restaurant, the greatest ever achieved by a fast food chain in the US compared to KFC 96000 CITATION Tay22 \l 1033 (Taylor, 2016). Chick strategy clear dominates KFC. According to several analysts, Chicks mix of superior customer service and food quality is the main reason they are on top. Chicks constantly rank at the top in customer service surveys, with customers complimenting their restaurant's tidiness, convenient, quick service, and good employees. Chicks strategy is the most unique among all quick-service restaurants. they do not to attract customers using low prices, cheaper value menus, and low quality. Unlike its competitors, Chicks uses a different approach to their marketing and pricing. They focus more on freshness and quality to keep profit margins high. Chicks products are priced higher than similar competitors to eliminate low-cost value items. There are several terms related to the approach that Chicks uses to establish its pricing structure. One strategy is prestige pricing which sets a high price to portray an image of uniqueness and high quality. These strategies are effective because customers tend to link quality with price Another strategy the implement is price skimming which is the highest price consumers will pay for a product they desire. The risk is such pricing strategies is they can alienate consumers who are either unwilling or unable to pay the price, especi...