In-N-Out Barger External Environment Analysis - Case Study Example

In-N-Out Barger External Environment Analysis Introduction In-N-Out Burger is a fast food company based in South West of America. The company also has a number of areas where the fast foods are provided to the customers as appropriate. The company original started its operations in 1948, though with few market prospects in terms of sales and customer base. The modern dispensation store has expanded to other location, though in confined to the US. States such as Texas, Arizona, Nevada and Utah host the fast food company. In-N-Out Burger is no longer confined to South Carolina, but also to other locations a factor that has raised its profile in the market (Perman, 2009). The company’s internal structure significantly choreographed to enhance efficiency and productivity. Towards the end of the year 2013, the company had about 19000 members of staff with over 290 strategic locations. A number of distribution centers have been opened to the extent that they are the strategic components that are essential for expansion in the future. In-N-Out Burger is a privately owned entity and has never had prospects of going public based on a number of reasons. Case in point is that the company has resisted the prospects of an initial public offer in order to maintain quality of the products produced and the customer base (Capon & Capon, 2009). The aim is to ensure consistency and enhance growth as appropriate. The company lays numerous emphases on the wellbeing of the employees to the extent that In-N-Out Burgers pays its employees wages that are beyond the target set by the federal government or the individual state. The aim of this report is to provide analysis on the external environment of the company based on a number of issues. In-N-Out Burgers constantly monitors the external environment to ensure that it continues to remain relevant in the market. The external environment manifests a number of issues that can easily determine comfort of a company in the market or eventual face off. The economy has remained stable with less volatility experienced in the market. In this sense, the company has managed to capitalize on the stability of the market to the extent that the returns on investment have doubled compared to the other years. The US economy has been a factor that that has ensured continual growth and expansion of the company to other locations. Since the recession, The US economy, and specifically of particular individual states has remained stable and making it relatively easy for In-N-Out Burgers to maximize on the situation. The rise of the middle class in the past few years has expanded the customer base in the sense that many people have the money to make purchases. The stability of the economy has enhanced profitability for the company to the extent that more revenues have been collected in the recent past. The stability of the economy has made it possible through profitability of the company to expand to other locations and spread the customer base. It is a notable fact that that the future looks even brighter for the company in the sense that the market continues to remain stable with less volatility experienced. In-N-Out Burgers is located in societies where majorities of the people are young and some in the middle class. The social and cultural set up of the locations where the In-N-Out Burgers has set bases is relevant to the wellbeing of the company. In the modern dispensation, many young people and those in the middle class are embroiled in the lifestyle issues to the extent that fast foods resonate with a number of people. In Texas and Arizona, there are mixed races that visit the restaurant for the foods offered. The diversity of the people and the love for the company and its products has remained one of the greatest strengths for the restaurant (Perman, 2009). The culture that is inherently furthered by the younger generation is the fact that fast foods are better compared to when one engages in cooking. The culture of work where people work in shifts and have less time to change from one duty to another gives an advantage to the In-N-Out Burgers. Case in point is that people rush to the restaurant to make purchases so as to beat the deadlines set by their jobs. Essentially, the company capitalizes on the unique and diverse nature of the people who are bound by a number of factors to make the profits. In-N-Out Burgers has been visited by a number of celebrities making the younger generation follow into the footsteps of their idols to visit the restaurant. Culture and social factors boost In-N-Out Burgers to a greater extent in terms of attracting customers to the business. Political and legal issues are critical external components that can negatively affect a business entity to a greater extent. In-N-Out Burgers has been embroiled in a number of legal issues some fronted by the customers themselves. Some of the customers have sued the company for being discriminated against while others have taken legal actions based on some accidents. The company has to set a standard in order to deal with unnecessary legal battles that only tarnish the name of the restaurant. Legal issues and numerous court battles make the company appear to be disrespectful or inclined towards some biases a factor that can affect the wellbeing of the fast food restaurant. In-N-Out Burgers does not have internal instruments of conflict resolution mechanisms within the confines of the restaurant. In-N-Out Burgers does not have any challenges that arise from politics. Politics is analyzed based on the executive wing that is the government and the local political entities. The government is committed to supporting businesses because through such initiatives, it is possible to enhance employment. It is important to note that the company receives support from the government effectively raising its prospects in the market. The taxes imposed on the fast food company have been relatively fair; thus, the business has not been affected through various taxation modes. On the other hand, the various states where the company is set have immense support from the local entities effectively boosting its chances of doing business. Though the company faces a number of challenges in terms of legal issues, the political wing has remained supportive. The customer base for the company stretches to the extent that it draws from a number of sectors. The company has a policy that is pegged on giving the customers the first priority. The needs and expectations of the customers are appropriately adhered to and the relevant steps taken to expedite on providing the clients with the best products. The customer’s specifications on the products needed are carefully researched to ensure that the burgers meet the specifications of the people as expected. It is important to note that some of the suggestions concerning the burgers and other products have been introduced into the company’s menu. The special relations that the company has with the members of the public are the reason why it has become difficult for others companies to beat In-N-Out Burger (Schermerhorn, 2011). Throughout the business environments that In-N-Out Burger has presence, the customers are viewed as special pillars that build the company and ensure that profitability is enhanced. In-N-Out Burger has a loyal customer base that is rivaled by few in the fast foods business. It is important to note that attracting more customers is a constant issue for the company. The fact that the company listens to the customer’s needs is the point of continued maximization on returns on investments. In-N-Out Burger has built a broad customer based on a number of issues. The company to promote its products to the clients uses advertisements extensively. The company uses the mainstream media to advertise its products to the public. Consequently, the company uses branding to market the product and this continues to be the strongest point through which In-N-Out Burger manages to draw more clients on its side. The quality of the products at In-N-Out Burger cannot be overemphasized. The company continues to improve its menu by introducing more burger products and the quality improves in different phases. As the company continues to file specifications on what they expect the products to be, the restaurant is set to acquire more expand its base as appropriate. It is important to note that In-N-Out Burger continues to build on the loyalty of the clients in the sense that customers are encouraged by the fact that they get products that meet their needs and expectations. Quality products are the basis for drawing customers to the business. Diversification of the burger production is another issue that raises the company’s profile to a greater extent. There are different burger ingredients that the company stocks to the extent that it provides wide variety products necessary for choices to made. Essentially, the company provides the clients with diverse choices that make it possible for the restaurant to capitalize on the advantage. It is likely that In-N-Out Burger will continue with the product improvement and quality into the future and such tendencies are set to continue raising the company’s prospects in the market. Competition remains one of the serious issues that continue to threaten the relevance of In-N-Out Burger in the fast food business. While the company struggles to meet the needs and expectations of the people, competitors have devised new methods to dislodge the entity from the wide customer base (Rao et al., 2008). The MacDonald’s one of In-N-Out Burger serious competitors to the extent that most of the customers naturally prefer the MacDonald’s for the burgers and other fast foods products. On the other hand, Burger king is a competitor providing almost similar products though of different quality effectively challenging the prospects of t In-N-Out Burger in being a formidable force in the market. Serious competition, however, lies between five guys and In-N-Out Burger. In terms of locations, Five Guys command 750 chains against 258 of In-N-Out Burger. The number of locations that Five Guys are situated provides customers with the option s of getting to the destination with relative ease. It is important to note Five Guys continue to expand significantly; thus, providing customers with varied options on how to get the burgers and other fries. In-N-Out Burger has been slow on expansion compared to its major rival Five Guys. The process of ordering for burgers and fries from Five Guys is significantly different from what In-N-Out Burger offers. Customers have varied ways through which they can get the products from the Five Guys chains to the extent that clients do not have to struggle as much. While In-N-Out Burger maintains the dominance in some areas of the south, the completion it continues to receive is critical and requires necessary strategies to ensure that the competition is shade off as appropriate (Justin, 2006). More fast food companies continue to be a threat to In-N-Out Burger and the more the competitors expand the more likely that the market tides will turn against the restaurant. It is necessary for In-N-Out Burger to take serious measures either to deal with insurgence of other entities or risk irrelevancy in the market. However, it is critical to note that In-N-Out Burger maintains a loyal customer base, especially in California and other locations and it needs to maximize on the influence to increase its fortunes in the market. The future looks even tough for the company in the sense that there are other fast food restaurants that continue to emerge and it is likely that In-N-Out Burger will face stiff competition from the new entrants in the market (Pendse, 2008). The company’s supply agenda has been strategically enhanced to ensure that fresh meet and other materials get to the company at an appropriate time. Case in point is that the company has had to build processing centers in some locations to limit the distance of transportation from the headquarters to the necessary destinations. For instance, when the company moved to Texas, the company built a processing facility to ensure that the materials were readily available for transformation into palatable food (Perman, 2009). In-N-Out Burger has an elaborate grinding system that enables them to have constant supply of products to their outlets. Though other chains have a way through which they grind their foods. In-N-Out Burger has a system that is rivaled by few essentially giving it an advantaged only sought by the competitors. In terms of supply of foods stuffs, In-N-Out Burger is properly established and its strategy of having centers of supply within the locations where the chain is located is a strategic plan that continues to build the company’s confidence in terms of having a constant supply of materials to the stores (Perman, 2009). In-N-Out Burger only has a few areas that have to be looked into in so far as the external environment is concerned. Conclusion In-N-Out Berger’s is an established fast company based in the South West of America and its dominance in that region cannot be overemphasized. The report analyzes the external environment of the company and the various issues that are critical to its survival based on the established facts. The US economy, and specifically of particular individual states has remained stable and making it relatively easy for In-N-Out Burgers to maximize on the situation. Consequently, the social and cultural set up of the locations where the In-N-Out Burgers has set bases is relevant to the wellbeing of the company. Legal issues and numerous court battles make the company appear to be disrespectful or inclined towards some biases a factor that can affect the wellbeing of the fast food restaurant. In-N-Out Berger’s external environment remains volatile to some extent, and how the company manages to wither the challenges will define its relevance in the market. References Capon, C., & Capon, C. (2009). Understanding the business environment: Inside and outside the organization. Harlow, England: Prentice Hall/Financial Times. Justin, P. (2006). Business Environment: Text and Cases. McGraw Hill. Perman, S. (2009). In-N-Out Burger: A behind-the-counter look at the fast-food chain that breaks all the rules. New York: Collins Business. Pendse, P. H. (2008). Business analysis: Visualizing business processes and effective software solutions. New Delhi: Prentice-Hall of India. Rao, C. A., Rao, B. P., & Sivaramakrishna, K. (2008). Strategic management and business policy: Texts and cases. New Delhi, India: Excel. Schermerhorn, J. R. (2011). Exploring management. Hoboken, N.J: Wiley. References Read More