In-N-Out Burger - Research Paper Example

?In-N-Out Burger Company Overview In-N-Out Burger is one of America’s leading fast-food retail chains with over 120 stores in California and Nevada (Funding Universe, n.d.). In-N-Out Burger was founded by Harry Synder back in 1948 as the first drive-thru Californian restaurant. Over the years, the company has remained in the hands of the Synder family. The main reason behind In-N-Out Burger’s success is that it has a simple menu and maintains a customer-friendly attitude (Funding Universe, n.d.). Simplicity was what Synder had in mind when he opened the first In-N-Out Burger store. As its name suggests, everything about the company is quick and fast. Customers can go through the drive-thru and order via a two-way speaker unit; the menu is very limited; and prices remain competitive (Funding Universe, n.d.). Slow and steady was the philosophy that made this company so great. In recent times, the company has expanded into other states such as Arizona, Utah, and Texas (In-N-Out Burger, 2012). Many experts would say that the company has failed to become a national brand because it limits itself in terms of growth. However, when Harry and his wife founded In-N-Out Burger, their desire was to “serve customers high-quality, fresh food with efficient, friendly service in a clean and tidy environment” (Funding Universe, n.d.). Synder had no aspirations for turning In-N-Out Burger into a corporate brand; this is why the company has remained family-owned to this very day. Even though Harry Synder has passed away, his legacy lives on through his children and their children. Justification for International Expansion With the struggling economy these days, In-N-Out Burger needs to consider alternatives to the current markets in which it is involved in. There is potential growth in other states around America, but with the economy so fragile, it may not be the best move. In-N-Out Burger should look further afield and try to capture some of the huge global demand for fast food. In many developing countries, people are starting to turn to fast food as their incomes grow. Of course, In-N-Out Burger would have to adopt its strategy that was so successful in California. Prices would have to be lowered so that local consumers could afford it. Also, cultural considerations would have to be made so that the In-N-Out Burger brand does not get a bad reputation for offending religious and/or cultural values. In-N-Out Burger has already proven that it can expand to other states within the United States, albeit at a very slow pace. However, so long as In-N-Out Burger could retain control over its foreign operations, then there is no reason to say that the company could not still hold true to its philosophy. The problem is that when most other fast food restaurants expand overseas, they do so through franchising. This would not be suitable for In-N-Out Burger because it goes against the company’s core values. If the company was going to go down the franchise route, then they should make sure that American expats are put in charge because they would understand the company’s organizational values. Country Overview The three proposed countries that In-N-Out Burger should consider expanding to are Canada, France, and Japan. Each of these countries will be evaluated in terms of the fast food industry and In-N-Out Burger’s likelihood of success. Canada In terms of culture and food preferences, Canada is very similar to the United States. This makes Canada an ideal first step towards expanding overseas. As of 2010, the Canadian fast food industry was estimated to be worth C$ 20 billion (Euromonitor International, 2011). This shows that the fast food industry in alive and well in Canada. This probably means that there are limited growth opportunities because the market is already saturated with fast food chains. Tim Horton’s, with a 26 percent market share, and McDonald’s, with a 15 percent market share, are currently the two market leaders in the fast food industry. However, because Canadian consumers already frequent fast food restaurants regularly, and the market is continually changing, In-N-Out Burger will be able to capture a small market share in the short term. Once the brand builds up its presence in Canada, it will be able to take on the big industry leaders France France, specifically Paris, is famous for being one of the greatest food cities in the world. The French fast food industry, however, has its share of challenges. First of all, many French people complain about American fast food because it is blamed for the decline of French cuisine (Atkielski, 2012). McDonald’s has a strong presence in France, but they have had to alter their menu considerably to appeal to French taste. McDonald’s struggled to penetrate the French fast food market until it realized that French need to consume either beer or wine with every meal (Atkielski, 2012). If In-N-Out Burger was to achieve even a fraction of the success that McDonald’s has had, then it would probably have to offer alcohol to its patrons. Part of In-N-Out Burger’s appeal is that it has a simple menu, and adding alcohol to it would change the brand completely. Thus, France is not a suitable country for In-N-Out Burger to expand to because of the above mentioned factors. Japan The Japanese fast food industry is growing at a fast rate. The Japan Food Service Association reports that the number of fast food customers increased during 2010 (JMR , 2011). However, sales volume decreased since the beginning of 2010 (JMR , 2011). This suggests that although the fast food market is appealing, it does have its fair share of challenges. Wendy’s and Burger King have struggled in the last few years, with Wendy’s forced to withdraw from the Japanese market completely (JMR , 2011). While Japan could be an attractive place to expand to, the culture is very different from the average Californian. Also, the location is quite far away, so it would be difficult to retain In-N-Out Burger’s company values. Finally, the number of competitors in the market means that In-N-Out Burger would likely struggle to be able to survive in the short term. References Atkielski, A. (2012, April 15). Paris Fast Food. Retrieved May 7, 2012, from Anthony's Home Page: http://www.atkielski.com/main/ParisFastFood.html Euromonitor International. (2011, August). Fast Food in Canada. Retrieved May 7, 2012, from Euromonitor International: http://www.euromonitor.com/fast-food-in-canada/report Funding Universe. (n.d.). In-N-Out Burger. Retrieved May 7, 2012, from FundingUniverse: http://www.fundinguniverse.com/company-histories/InNOut-Burger-company-History.html In-N-Out Burger. (2012). History. Retrieved May 7, 2012, from In-N-Out Burger: http://www.in-n-out.com/history.aspx JMR . (2011). Fast Food Sales. Retrieved May 7, 2012, from Japan Consumer Marketing Research Institute: http://www.jmr-marketing.com/user/705/Fast_Food_Sales/ Read More