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Value Chain Analysis Service Marketing and Sales Outbound Logistics Operations Inbound Logistics Customer call center for complaints, service cards, communications Advertising, brand marketing, cupons, store decoration, new item creation, media promotions Order processing, drive through window, shipping Food creation, cooking, maintenance, cleanliness and hygiene controls, communications infrastructure and training Storage of raw materials, inspection Replacement parts for equipment, service contractors Advertising- Radio, TV, newspaper & internet Restaurant supplies, computer services, waste disposal and POS operations Food, paper goods, real estate, cooking equipment, energy, eRestaraunt services & inventory applications Transportation, local sourcing for fresh vegetables and salads, site maintenance contractors, restaurant supplies Procurement Service manuals, training videos, customer feedback systems Market research, new product introduction, sales & forecasting systems Back kitchen monitors, order timing, better equipment for drive through, remote call center for drive-thru ordering Design of terminals, design of procedures, quality control procedures, wireless thermostat monitoring & control, card payment terminals Design of ordering/scheduling software, potential JIT delivery system for goods Technology Development Recruiting, training, development Human Recourses Financing, legal support, general management, accounting, quality control Firm Infrastructure The Value Chain
The Value Net WENDYS Suppliers Meat Suppliers Veggie Suppliers Restaurant Supplies Distributors Equipment Manufacturers Customers Customers eating at fast food restaraunts Families Companies Complementors Coca Cola Nestle Hinez Hasbro Movie Studios Government Regulators Competitors McDonald’s Burger King YUM Brands (-) (-) (+) (+)
Value Analysis Company Key Activities: Outbound Logistics Business Design Elements: Brands/ Customer Selection Suppliers Meat Suppliers Veggie Suppliers Restaurant Supplies Distributors Equipment Manufacturers Complementors Coca Cola Nestle Hinez Hasbro Movie Studios Government Regulators Competitors McDonald’s Burger King YUM Brands Customers Customers eating at fast food restaurants Families Companies
Forces SUBSTITUTES RIVALRY SUPPLIER POWER COMPLEMENTOR POWER CUSTOMER POWER NEW ENTRANTS THREAT OF NEW COMPETITORS
Scale Capital required- This is clearly an important factor, as Wendy’s needs to maintain strong economies of scale. Efficiency production and cost reduction are crucial for Wendy’s competitive strategy.
Technology, Patents- This is another vital factor for Wendy’s as Wendy’s food preparation is unique from other competitors
Customer loyalty, branding- Customer loyalty will help Wendy’s retain a customer base and fend off competition.
Raw Materials- Wendy’s needs to secure the most cost-effective raw materials in order to maintain efficiencies and remain competitive.
Market Saturation- This factor may serve Wendy’s well as the market for fast food is clearly saturated, thereby increasing the barriers to entry.
Number, Quality, Availability- Wendy’s clearly has many substitutes in it’s industry
Price-Performance- Wendy’s must be aware of competitor prices in order to stay competitive
Switching Costs- This refers to costs associated with switching suppliers. As the only difference is the amount of gas necessary to drive to the restaurant, and all competitors have many locations, this is effectively zero.
Saturation of alliances- Many of the competitors have the same or similar alliances with the complementor (e.g. Coca Cola) or their rival (e.g. Pepsi). As it is relatively simple to obtain the product, the complementors have relatively little power in this respect.
Centrality, equality- Contracts between fast food restaurants and complementors are relatively simple and commoditized. There is little power here.
Scope differentiation- As complementor power rises, scope differentiation decreases. As such, Wendy’s needs to always maintain a certain level of differentiation to avoid increases complementor power.
National Diversity- A nationally diverse market makes it difficult for Wendy’s to maintain a uniform strategy. It will need to adopt different strategies to help compete with regional and local fast food chains.
Number, size, concentration- Customer concentration in a certain market segment will increase competitive pressures on Wendy’s.
Information- Customers are always smart shoppers, they always know what they are looking for. They are also well aware of pricing differences.
Differentiation- Wendy’s needs to differentiate its products to accommodate customers’ different tastes and preferences.
Customer Loyalty- This is crucial for Wendy’s as customer retention via differentiated product lines and competitive pricing will boost Wendy’s market position
Key Triggers- Domestic Market Saturation, Movement overseas of domestic customers, Sourcing opportunities
IR-Grid Analysis- Group = International companies (Low Pressure for local responsiveness, Low Pressure for Global Integration)
Political & Socio-Cultural Trends Company- Offers corporate social performance and political activities Suppliers (Policy Makers) FDA Congress Customers (Social Actors) Activists Community Groups (Political) Complementors Pro-Business Legislators Lobyists (Political) Competitors LA Government Supersize Me (-) (-) (+) (+) Corporate Political Advantage Process Social Legitimacy Process
4) Maintain vigilance for merger/vertical integration possibilities
Threats and Opportunities, Redux Regional/ Boutique stores Inter/Intra group mergers Government Action (Los Angeles) More upscale “boutique” stores Consumer concerns about nutritional data Mass Customization Commoditization Global Expansion