The genetic business strategies
American has several fast food restaurant chains that have been operational for a long period of time. Chick-fil-A is one of the competing companies for the ever growing market that was started in the year 1946. The company started with the initial name Dwarf House and was later changed to Chick-fil-A. Through the strategies that the company put in place, it is clear that the company has been receiving a positive growth trend from its initial state to being a major customer preference option. (Weinstein, 2020)
Through the passion that the company has created, it has been able to grow a unique customer experience which has led to the creation if the unique market where clients keeps on coming back for more products. However, its products are more expensive than what other competitors in the market who deal with similar products sell their products for.
The reason behind the increased cost of the end product is the cost that the company spends while producing and also the amount of time so that to guarantee the customer the best product. One of the prides of the company is that it has invested a lot of time when it comes to developing their final recipe that is more than 11 years. The company also has spent over $50million to come up with all the necessary equipment that will be required for the organization.
The success of the company is based on the fact that it took a new approach of the market which is different from what other major companies are doing. The customers in the US market are known to prefer burgers and also beef. (Feliciano, 2021). The company saw an opportunity of approaching the market in a different dimension hence creating an untapped market.
Another strategy that the company has used to win the customers is a state where the customers are made to feel at home each time they arrive at the organization. Major first food companies have highly focused on reducing the amount of time that each customer should spend while being served so that to prevent a large number of the customers that might not be easy to handle. The company does the opposite by welcoming the customers and giving them a positive experience as they wait for their order to be processed.
The company also has a high value of its employees so that to retain the most experienced. This has been achieved through paying them higher that what other companies pay. The company has also created opportunities for the employees to develop their career opportunities. There are allowances that have been put aside for each employee depending on their situation.
A combination of all this has led to intrinsic motivation development for the employees and in return, they have created a positive client environment. This happens from the moment one gets in the premises of the company and creates a feeling that the company values client experience hence increasing the chances of customer return.
Business strategy analysis on the market approach
The current fast foods market has put a lot of effort on creating healthy food market due to raising healthcare concerns. There are diseases which include chronic diseases that are being caused by what clients consume. To counter this, the government has stressed on ensuring that companies follow the right procedures on food production.
Throughout the 11 years of the company’s product development, it has focused on developing a unique taste of its products and also on developing foods that meet the set food standards. Through this, clients are assured that they are consuming the right foods which has minimal arm to their health.
Taking opportunity from restaurants
Due to poor customer services that are being offered by restaurants, the current food industry seems to focus more on first foods where the clients feel that their needs are being addressed in the right way. This has led to the growth of the food industry hence boasting the performance of companies such as Chick-fil-A.
The company has used the restaurants’ weakness for its strength through creating a positive customer approach where the main emphasis of the organization is the customer experience. The welcoming employees seem to target the return of each client hence leading to the organization’s growth.
Covid-19 adaptation strategy
During the covid-19, several organizations failed especially when the government announced the closer of major companies. Several of them fell to an extent that they might not recover after the pandemic situation. However, Chick-fil-A seems to thrive despite of the pandemic due to its market approach strategy.
This can be proved by the fact that the president chose to work with the company’s CEO so that to bring up the country’s economy back to its feet through coming up with strategies of reopening other industries in the country. The government through the ministry of health came up with strict restrictions on how people would handle the pandemic which to a large extent seemed impossible to accomplish. Through the online platforms and complying to the protocols first enough, the company came up with a new business strategy that would help in dealing with the situation that was created by the pandemic.
The ability of a business to do well, it must be set to adopt some of the economic threats that might come up. For the pandemic situation, no organization seemed to be prepared on what would be coming therefore it was up to the organizations’ management to develop quick strategies that would promote the development of the companies. Effective ways of market approach led to the continuity of the company despite of the situation in hand.
One of the strategies that the organization applied when approaching the market was to expand its services to other countries outside US such as in South Africa. However due to unexpected market dynamics in the new markets, the company did not do as well as it had planned initially which led to failure in the international market stage.
The initial market failure did not stop the company from making the second attempt on making the expansion. However, due to the lessons learnt from the first mistakes, the company began with creating a single branch in Canada so that to understand the country’s market dynamics. After the testing was completed, the company launched the sales of its products and in the first day, over 3000 sales of chicken sandwiches were sold.
The company also employed a similar strategy in approaching the market in Vancouver through first running a test and then launching the main business. In the year 2020, it has carried its operations in Canada where a similar strategy has been used in creating the market expansion in the region.
The main strategy used by the country is to first test the market through launching a single store. Through the store, the organization learns on the product marketing within the country. This includes the cultures of people so that to understand the most appropriate ways of approaching the market. Setting up single branches in the target country also saves on the costs in case the company fails.
Approaching a new market.
When a business is launched in a new market, it is clear that it will often face new challenges such as marketing the new product. This means that launching the company as a go in a country and opening several branches at once does not mean that the company will perform well. This was the problem that initially affected the company hence resulting to the losses. The lesson learnt has led to the creation of the new strategy of testing the market first them launching the product fully.
Another key strategy for the company is that it has been consistent on its products since its beginning. The market approach has been the same whereby the chicken taste has not been changed since when the company started. They key changes that the company has made is not customer treatment whereby it has focused on giving them the best experience that other competing companies have not have not matched.
The quality of a product is always interesting to the customers but that is not enough to retain them. What the customers experience while seeking for services in an institution is key to determining whether they will come back or not. The treatment from the employees in the company helps the clients in creating a perception of the type of services that the organization is willing to offer them. If it is a positive experience, there is a high change that they will return for more and if negative, most of them often communicate to other clients through online platforms of through physical meetings hence warning them or referring them to the company.
The company uses a faith-based marketing approach whereby the customers might turn up or fail to turn up to get the products. Several companies have failed through using this strategy whereby they have incurred losses from the wasted products due to low customer turn up. Chick-fil-A has a strict policy on its productivity together with products handling and clients’ treatment which has been key to its success.
Through this, it has been able to create a traffic of loyal customers who always come back for more products. Due to such a traffic, the company has done well with the faith-based strategy where it is assured that clients will always turn up to consume the produced products. Considering its amount in sales, the company generated a total sales of $10.5 billion becoming the third largest after McDonald’s and Starbucks. The sales increased by more than 16% in the year 2019 which shows a positive trend.
Another strategy that has been used to control the product quality is the fact that the company is only owned by a single individual unlike other franchise owned companies the management creates policies that are used to control all operations in the branches hence ensuring that the products are of the same quality. Those allowed to manage branches are expected to control only a single branch in the location so that to maximise on the production quality.
Attracting investors into the business
Investors who are willing to invest in opening Chick-fil-A store have also been allowed to do so if they are willing to follow all the policies and standards that have been set by the company. However, they are supposed to pay a fee of $10,000 so that to open the stores. The newly opened stores should not be at the same position with others stores.
For a quick food business to grow, other investors must be present so that to boast the operations. This includes the type of marketing that will be done by the company. A product which has a good name will attract a large number of investors who would be willing to get into the business. The strategy has led to the increasing number of people who are willing to invest in the opportunity created by the organization. (Hollensen, 2013).
The company is also using the strategy of growing into other locations around the world. Currently it possesses 2,639 stores in United States whereby 16% of the total number of stores are located in Texas. More are opening in other locations within the country. However, there are only three stores abroad both in Canada and the United Kingdom.
Increasing the market size
The main reason behind high numbers in United States is that the management clearly understands the nature of the market within the country and also has done proper marketing for the local market. This is not the same case to the international market as the management has to analyse and understand the market before venturing into making an investment.
Internationally the demand for quick foods is increasing especially due to the demand of allocating more working hours instead of spending time in a restaurant. Because of this Chick-fil-A is taking this opportunity to capture the growing market in all corners of the work. However, it is not easy to set up several stores before running a pilot study on the people’s response towards the products. That is why the growth process has taken a lot of time.
To reach out to a large number of customers, companies must be willing to spend money on making investments. There are several methods of advertisement that companies can choose from when it comes to approaching the market. It is also vital for the company to consider the most appropriate method of advertising that will reach out to a large number of clients within the anticipated period of time.
Chick-fil-A spends over $60million annually trying to reach out to clients through various advertising methods such as billboards, television ads and making sponsorships. One of the major adverts that has attracted many customers is then one that shows an advertisement by cows which are asking people to eat more chicken and less cow meat. The cows appear to be trying to save themselves from being consumed through directing people to chicken. It is a message that can be recalled by the viewer’s hence creating the required attention.
The billboards has also been placed in various locations all over the country in strategic places where people can easily recognise them. This has increased people’s awareness on the company hence getting attracted to the products. To expand the awareness, the company has also sponsored a football team and through carrying its name, the company has been able to advertise itself to different locations through acquiring the attention of the fans.
One of the best ways of reaching out to clients especially the young generation is through online platforms. The young people have migrated into the online platforms such as Facebook and Twitter which means that it is an important part of capturing their attention. Chick-fil-A has not overlooked on the strategy since it has user various methods of online advertisement and has also reached out to several platforms so that to capture the attention of the young generation.
All the methods that have been employed above when it comes to capturing the market are not enough if the supply chain is not given the right attention. This looks into how clients can access products in a more efficient manner than what other competitors would be willing to offer. The company has seen a positive trend of its supply chain from the year 2012 to the current period of time which has grown from $4million to $10million.
The company’s Business Model
Product sold by the company
The company forces on selling chicken Sandwich in the established stores that have been carefully researched on so that to ensure that the right quantity is given to the clients. Clients also focus on consuming healthy meals. To achieve this, the company has given focus on producing assessed products that meet the set health standards. This has been a major factor on the company’s growth.
How the organization makes money
The organization charges more per product than any other company. However, clients still by the products despite of their high price because they feel that the products are of high quality. The company has grown due to its ability to sell its products under a highly conducive environment which attracts the clients. This is better than what other would be willing to offer hence contributing to higher sales hence more productivity by the company.
Customer value proportion
It was noted early that the company hopes that a higher number of customers will turn up to consume the products at the end of the day. This means that there is no definite number of clients as the numbers keeping on changing within an increase or decrease of the clients. However, the company’s loyal clients have kept the company in a progressive motion through coming back for more products.
Despite of competition and other factors such as the pandemic, the company has shown a progressive profitability since when it was initiated and after more strategies have been put in place together with making expansions to other regions. The profit made per product is higher than cost of operations which means that the company is doing well in terms of profitability.
Company expansion and product change
The company has made expansions of its operations from targeting one region to spreading all over the country through opening various stores. At first, it made expansions outside the country but because of poorly planned strategies, the expansion did not take place as planned hence slowing down the progress of the company. However, the product has not changed its product instead it has done research on the taste improvement. This has been a key factor to perfecting the products hence increasing the number of clients. (Feldman, 2020).
Vertical related activities
The company does not hold any connection with other businesses. The key strategy of the business is to adopt other investors who intend to open new locations in various countries to invest in the business. The clients visit the stores so that to access the products there for value chain products does not apply.
It is right to say that the company’s management is done through vertical integration. Vertical integration is a situation where a company has the ability to control all owners within a business setting. The company makes the decisions where the other operators are expected to follow. In this situation, the company controls activities in Chick-fil-A so that all operations within the business are governed by one person at the managerial level. This is key to creating a business with a positive trend and growth.
The organization is doing well in terms of its development despite of its slow approach into the international market. It is also a unique company that is it has retained the productivity. The company has also adopted the use of technology on its development which is key to the right marketing strategy. Despite of the high product prices, clients have remained loyal to the company hence creating a stable market environment.
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Seaman, L. (2021). Chick-Fil-A Staffing and Training: Applications to Recreation Agencies.
Feliciano, A. (2021). Correlation Study: CEM Scores and Customer Perception Value in Chick-fil-A Teterboro from 2018-2019. Journal of Student Research, 10(1).
Weinstein, M. D. (2020). It’s Coming: Chick-Fil-A Scheduled to Open In August.