In-N-Out Burgers Inc - Case Study Example

In-N-Out Burgers Inc. Summary In-N-Out Burgers Inc. is a chain of restaurants that deal in fast foods. The company is unique sinceit has specialized in producing burgers. They have since launched varieties of burgers that are trademarked for exclusive making and distribution. The company is distinctly a family business that has refused franchising and public ownership for fears of dilution to brand and poor quality. It currently enjoys a regional feel and popularity in spite of the need to expand into other areas. Background In-N-Out Burgers Inc. is a US chain of fast food restaurants that majorly locates in the Southwestern parts of the country and in California. Harry Snyder and his wife founded the entity in 1948 by establishing the first In-N-Out Burger restaurant in California, Baldwin Park (Perman, 2009). Over time, the restaurant chain expanded out of California into states such as Nevada, Arizona, Texas, and Utah. In 1976, Rich Snyder and his brother, Guy, took over the company and facilitated its expansion into 93 restaurants. During his era, the company had its first non-southern California restaurant. Lynsi Snyder, the Snyder’s grandchild, is the current owner of the entity. The chain has expanded to open new distribution centers besides the initial Baldwin Park location. The company currently has 290 locations and it has 18, 000 employees. The new distribution centers will aid expansion into other parts of the country. What the company does well In 1948, Snyder established the first drive-through hamburger stand in California. The stand allowed drivers to make orders through a two-way speaker system. This was a unique idea that thrived on the In-N-Out’s mantra of giving customers quality food in an attractive and clean environment. It is essential to highlight that the In-N-Out Burgers Inc. has operated conservatively thereby confining the business within the family management. In close relation to this, they have resisted franchising and making the business a public limited company. Family management ensures a tradition through generations and years. The company seems to believe that customers frequent a business for a particular reason. This opposes the idea of dynamism that would have seen frequent changes in menus and brands. The company has claimed that franchising and making the entity a public limited company creates inconsistency and destroys the brand of the entity. In addition, the owners fear a rapid business growth is highly likely to compromise on quality. It is essential to highlight that the company emphasizes on employees’ welfare in their operations. Critics have noted the company’s business practices that entail employee-centered policies. In-N-Out offers exceptional wages that surpass the minimum wage guidelines. This occurs as they offer a least wage of US $ 10.50 per hour (In-N-Out Burger Inc., 2014). Such a policy gives the company notable advantages. To begin with, highly incentivized employees are highly likely to manifest higher productivity. This occurs as they try to offer services that are commensurate with their respective pays. In addition, they offer quality services because they are more satisfied with the work their duties. High productivity also occurs because the company enjoys employee retention. Besides, employee-centeredness fosters a proper brand for the company, as an entity emphasizing on corporate responsibility. In the contemporary business environment, corporate responsibility is key to marking an organization as a unit that minds the welfare of its stakeholders. This surpasses the traditional pursuit of profits, revenues, and market share. Besides, the company concentrates its business locations within a single region. This accords notable advantages. To begin with, the company eases coordination with the Irvine headquarters. The company notes that all the distribution centers exist at a distance that allows for a drive of less than one day. The company locates in Southern California and in southern states such as Arizona, Utah, Nevada, and Texas. Confining the business within a distinct region enables the careful and patient study of consumer habits. This is beneficial for designing a business strategy that satisfies the needs and the general preferences of a given market base. Problems and challenges The company faces notable challenges. To begin with, it is essential to highlight that America has a fast food culture that promises opportunities for new businesses (Smith, 2006). In turn, there is considerable competition from both major restaurant chains such as Mc-Donald and smaller competitors such as Chick-Fil-A. The industry, therefore, promises a capacity for new businesses that may threaten the market share of established entities. In turn, it is difficult to satisfy a dynamic customer base that may easily shift their attention to newer entities. The company has faced several legal issues. In 2006, Richard Boyd, a vice-president and co-trustee, filed a suit labeling certain directors as attempting to throw Esther Snyder and Boyd out of the company. Later, Lynsi Martinez and Esther Snyder appeared in a December video warning employees not to believe rumors about the company (Russell, 2012). The company then filed a suit against Boyd alleging that he signed uncompetitive bids and misused the company’s money on his ends. The judge dismissed two claims against Boyd and the trial date on the October of that year never occurred. A settlement was later reached out of court. In June 2007, In-N-Out filed a suit against a restaurant named Chadder for infringing on their trademark. In-N-Out claimed that Chadder, Utah-based restaurant, copied its look and feel. Chadder had violated trademarked menu items such as Protein Style, Animal Style, and Double-Double. In-N-Out restaurant later opened a restaurant in the American Fork area of Utah having gained a temporary restraining order against Chadder. Plan of Action The company has responded to competition in numerous ways. To begin with, it has created a distinct brand that it is difficult to imitate. For instance, the company has created a brand of convenience that specifically appeals for motorists. This manifests in cases of services that extend to motorists on traffic jams. The company also thrives on its regional popularity in the West and Southern areas of US. This compliments the resentment that the locals house against multinational chains such as McDonald. Besides, the entity thrives on its unique menu, which it holds as a secret. In the restaurants, a customer can taste a burger that is not in menu. For instance, Protein Style and Animal Style are products that feature on website, but are absent in the restaurants’ menus (Lopez-Alt, 2011). The company has trademarked both of these products thereby earning exclusive rights to producing and selling them (CBS, 2006). For instance, Animal Style is so unique that it entails two slices of melted cheese, grilled onions on top, and spread. All the same, the company should invest in expansion to other areas since they will squeeze their market shares in places such as Utah. References CBS. (2006). You’ve Likely Eaten Here, But Have You Tried The Secret Menu? CBS Los Angeles. Retrieved from http://losangeles.cbslocal.com/2014/06/26/have-you-sampled-these-restaurants-secret-menus/. In-N-Out Burger Inc., (2014). Employment. In-N-Out Burger Inc. Retrieved from http://www.in-n-out.com/employment.aspx. Lopez-Alt, J.K. (2011). The Ultimate In-N-Out Secret Menu (and Super Secret Menu!) Survival Guide. A Hamburger today. Retrieved from http://aht.seriouseats.com/archives/2011/03/the-in-n-out-survival-guide-we-ate-every-single-item-on-the-secret-menu.html. Perman, S. (2009). In-N-Out Burger. New York, NY: HarperCollins. Russell, J. (2012). In-n-out burger products. New York, NY: Book On Demand Ltd. Smith, A. F. (2006). Encyclopedia of junk food and fast food. Westport, CO: Greenwood Press. Read More