Competitive Analysis
Group 3
Garrett Matthews
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David Hayward
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Cory Logan
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Nick Watkins
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Mayra Garcia
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Lindsey Pacatte
Strengths
Expert Management
Global Brand
Atmosphere
Opportunities
International Market
Recession
Fish Sandwich
Weaknesses
Breakfast Menu
Problem
Management
Threats
Food Borne Illnesses
Increase in Beef Prices
Wendy’s SWOT Analysis
Internal Factors
Favorable Factors
Unfavorable Factors
External Factors
Strengths
Expert Management
Atmosphere adds value
Global Brand
Strong Supply Chain
Opportunities
International Market
Advances in Technology
Fresh Burger Market
Recession
Weaknesses
Breakfast Menu
Management Changes
Threats
Food Borne illness
Increase in Beef Prices
Key Success Factors
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Contribute to a company’s competitive
advantages by identifying components that
the company performs well in.
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Competitive Factors
Managerial Factors
Financial Factors
Technical Factors
Competitive Factors
Product Strength
• Lack of differentiation
• Unique patty shape
Customer Loyalty and Satisfaction
• Convenience
• Speed of service
Competitive Factors
Market Share
 Third largest company in QSR
 Introduction of new products
Customer Concentration
 Location variables
 Strengthen penetration
Competitive Factors
Cost Control
 Centralized distribution center
 Reduce labor costs
 Economies of scale
Investments
 International fast food markets
 Knowledge of foreign markets
Managerial Factors
 Corporate Image
◦ Structure and culture
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Social Responsibility
◦ Dave Thomas Foundation for Adoption
Receives 2009 PR News Corporate Social
Responsibility Award
Managerial Factors
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“Doing What’s Right for Our Customers”
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Focusing on core: Hamburgers
Build on the success of Baconator
Emphasize product being fresh never frozen
Updated menu: appeal to 18 to 34 year olds
New image by capital reinvestment
Total customer feedback system
Managerial Factors
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Strategic Growth Plan
◦ Phase 1- revitalizing the brand name and
growing sales and profit
◦ Phase 2 – plan to build on that success by
continuing to improve on company name and
brand
 “Doing What’s Right for Our Customers”
Financial Factors: Current Ratio
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Over the 5 year period,
current ratio for Wendy’s
peaked of 1.66 in 2006
See a downward trend
since 2006
Wendy’s current ratio was
at .76 for 2008
This .76 current ratio can
affect Wendy’s ability to
secure short-term
financing from both
creditors and investors
Wendy’s currently has the
lowest current ratio of all
the benchmark companies
Financial Factors: Current Ratio
Wendy’s current ratio is not a concern
currently
 The concern is the downward trend in its
current ratio
 This downward trend will directly affect
investors and creditors decision making
 They have the lowest current ratio making
them more of a risk compared to the
benchmark companies
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Financial Factors: Return on
Equity
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Wendy’s was highest in 2005
and 2006.
Most years there was an
above average return for
other companies.
In 2007, Wendy’s saw about a
6% drop in ROE from 2006.
In 2008, Wendy’s reported a
loss of $480,000.
Financial Factors: Return on
Sales
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Wendy’s is volatile.
◦ Food prices; fresh never
frozen
◦ Low margins; competition
◦ Must control cost
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Overall McDonalds and Sonic
had some of the highest
returns
◦ Utilize economies of scale
◦ lesser overhead cost
Financial Factors: Altman Z Score
Snapshot of a company’s likelihood of filling
bankruptcy
 Composite score encompassing 5 commonly
used financial ratios
 Company’s that are in the 1.8 and under range
are seen as extremely likely to file for
bankruptcy
 Anything above 3.0 is considered unlikely for
bankruptcy
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Financial Factors: Altman Z Score
Wendy’s current Altman Z Score is 7.85
 Indicates Wendy’s is safe from bankruptcy
at the current time
 Wendy’s creditor’s will view them as safe
to loan to
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Technical Factors
New and up to date technologies have
long time been the means of support of
the quick-service restaurant
 Wendy’s has combined order-taking,
order processing, and payment steps
down to an effortless deed that only
takes a matter of seconds.
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Top Performers
operational excellence like cutting costs,
maintaining quality, and basically running a
tight ship
 product innovation which refers to creating
a flood of great new products.
 The information era, on the other hand,
will require mastery of a third category of
customer intimacy
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Technical Factors
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The future generations of winners in the
QSR business will be well-known for the
most part by how well they know their
customers and how they make the most of
that knowledge to build customer
preservation and loyalty.
Wendy’s strategy takes structure along three
steps: (1) collecting information, (2) turning
information into knowledge and (3) turning
knowledge into a customer relationship.
Technical Factors
QSR companies will have the capability to
know their customers in unmatched
degrees of specificity.
 Instead of the wide-ranging demographic
segments that companies now use for
their marketing, technology will facilitate a
pinpoint approach on a household-byhousehold, individual-by-individual basis.
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Wendy’s Strategy Formulation
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Wendy’s is confined to a red ocean
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Therefore, in order for Wendy’s to
continue forth, they must look to new
ventures and ways of doing business that
are consistent with their mission but also
allow for further future growth
Business and Economic
Characteristics
Because Price and Convenience are near
universal throughout firms in the industry,
Wendy’s must focus on becoming the
“highly favored” fast-food choice
 Doing so will give customers more
inclination to visit store locations
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Forces that Affect Competition
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The Economy caused businesses everywhere
to focus on low cost to the customer; this
presents a problem when every firm lowers
prices
The end result is that low price becomes the
new standard so competition now lies in
value
Wendy’s has taken this road before during
the inflationary period of the 1970s, with the
slogan “Quality is Our Recipe”
Forces that Affect Competition
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The Super Size Me
Documentary
Caused a public backlash
against fast-food
restaurants
In response to the 2004
film, Wendy’s introduced
the Chicken
Temptation® selections
to their menu
Competing in the Industry
Overall Wendy’s needs to stand by their
strategy of creating a niche market by way
of their side dish offerings.
 Expand competition base by being
innovative and effective
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