1. Strategic Market Analysis and Recommendations for the Fred Harvey
Company.
Team #7
Awonti Etoo Ndjongo
Bach Nguyem
Eyeoyibo Tsegbemi
Kertis Leif
Patrick Lawson
Ratnayake Rankothge
WEST TEXAS A&M UNIVERSITY

2. Executive Summary
Fred Harvey Company has established a good successful business, especially after the
introduction of the Harvey Girls, in a period where gender inequality is becoming a huge issue.
Hiring of these girls is one great business decision, which draws a lot of attention to the
company. The level of customer service provided by them and the attention to details, are some
of the main emphases of the Fred Harvey Company. The company continued to run their Hotels
around major railway stations. However, in early sixties with the rapid increment of automobile
and air travels there was significant decline in rail passengers and that adversely affected on
Harvey Company since they only focused on Rail passengers. By mid sixties, company faced
financial difficulties due to decline of revenue. Company had to close many of their Harvey
Houses during this time. In the meantime, MacDonald successfully established 1937 and mainly
operated by the Highways. Their Fast food serving business model was popular among
automobile passengers compare to 30 min waiting time of Harvey houses. MacDonald rapidly
increased their franchises across the country by early sixties. Contemporarily, Howard Johnson
invested in restaurants and hotels on the highway roads, to cater automobile travelers as well.
The model used by Howard Johnson is very similar to Fred Harvey Company, with the use of
female waitresses. However, company catered their service to rail and highway passengers and
their hotels were more luxurious and added amenities compare to Harvey Hotels.
The 1950s was a decade of prosperity. With the economy booming and more disposable income,
spending pattern and habits changed. During the thirties and the recession most people could
simply only afford the basics. Later, Society was shifting from a production society, which
focused on meeting basic needs, to a consumption society, which focused on customer’s wants.
Americans enjoy high living standard, wanting more than just the basics, use and throw away, by
now pay later. With this trend, Consumers no longer needed many services on railroad, and there
was a shift to highway side eateries and hotels, as well as airline hospitality. The first major need
was for highway side eateries and hotels. The second major need was for airline hospitality. The
advancement of airplane technology significantly improved quality of air travel and enabled the
growth of commercial aviation. The growth of commercial aviation caused a growth in airports
and a need in airport food eateries as well as in flight food services. The third need was for
eateries by shopping center. As new shopping malls or centers were built, there was a need for
fast food restaurants and motels near shopping areas. The fourth need was for national park
tourism. El Tovar at Grand Canyon continued to be a great source of revenue for Fred Harvey
Company.
Harvey Company struggled with increased air and automobile travels. Company adapted to
strategic moves and invested in totally different industries such as arranging packaged motor
trips and investing in freestanding restaurants, resorts and national parks. With government
incentive to Airline and Automobile Industry Company struggled to survive. SWOT analysis
helps to determine the company’s current position. It explains Harvey Company’s strengths,
weaknesses, opportunities and treats during sixties. Based on the SWOT analysis, following
strategic recommendations are made. 1) Company will have to use existing resources to invest
the same model in different ways around upcoming highways. 2). Harvey company must expand
their same business operation into Airline industry with the emphasis of Harvey Girls 3).
Company must diversify the business operation vertically, horizontally and different business
model, yet related to current business expertise. Company can capitalize the relationship with the
government to establish business on the highways and expand operation in across the country.

3. Also it can successfully integrate their business with Airline industry using existing resources
such as Harvey Girls. It’s important that, company consider investing Airport and in-flight
catering both. Finally, Harvey company should consider Horizontal and vertical integration
where company can acquire small firms in the same type of business and some of important
suppliers to gain the competitive advantage.

4. Background of Fred Harvey Company in 1960s
Mr. Harvey's sons Byron S. and Ford took over the company in 1901, and operated it through the
1930's. When the last of them died, the company left Harvey control, and the company continued
to operate, albeit at a slower, lower level. After World War I, rising wealth, more automobiles on
the road, and more leisure time started hurting the Harvey Company, but the company adapted
and changed. While keeping many Harvey Houses, company moved away from full reliance on
train passengers and packaged motor trips of the southwest, including tours of Native American
villages and such natural wonders as the Grand Canyon (Harveyhouses, 2005).
During this time, company marketed Indian artifact, culture, and their living style. Unfortunately,
business continued to decline slowly as roads improved and air travel became possible, but the
depression so slowed business and industry that fewer and fewer people traveled for any reason,
by any means, let alone by train. By the 1950's though, the railroads, worn out by years of
carrying war goods, were cutting back. The government began massive subsidies to the
automobile and airline industries in the form of highway and airport construction funds, but not
to the railroads. Therefore, passenger trains began their decline. The Santa Fe was one of the
holdouts, setting high standards all the way to Amtrak that other railroads could have copied.
However, the Company has tried to adapt changing conditions according to market conditions.
This time, the Harvey Company began to focus more on freestanding restaurants, resorts and
national parks. By the early 1960's the Fred Harvey Company had moved out of Los Angeles
Union Station, and began operating the Music Center Restaurant (on the right) only a few blocks
away (Harveyhouses, 2005).
There are few main problems associated with the Fred Harvey Company and its existence.
Importantly, company has completely neglected the impacts of government decisions for the
business operation and the future trends that can influence overall organizational operation.
When analyzing company’s history during 60’s, some important conclusions can be made as to
why company struggled to survive after Ford’s demise. First, company had to change their
organizational strategy after WWII, rising wealth and increased automobile travels. The
company mainly arranged packaged motor trips of the southwest and promoted Indian culture
and arts. Then second time, they had to change their strategy as government started promoting
airline and automobile industries. This time the company took a completely different route and
got into freestanding restaurants, resorts and national parks. Since the beginning, every time the
company had to change the strategy, management started operating in a completely unknown
industry to the company. First time, they started offering packages of motor trips to Grand
Canyon. This is a totally unknown industry to the company and the management didn’t have a
good understanding about future developments of airline industry and the automobile industry.
Second time, they focused on resorts, national parks and music center restaurants. In the
meantime, the government was heavily promoting the highways and airline industry offering
them huge subsidies.
Market and Competitor Analysis
Competition in business is one thing, which drives some companies to become more successful,
innovative, and also increasing its customer’s satisfaction ratings, which is very important. The
world in constantly changing, new trends become long forgotten, and the only way to stay on top
of the market place is through evolving into the company the current market needs. While some
companies succeed in keeping up with the competition, others tend to crumble and give way to

5. the bigger companies or those who were able to keep up with changes in trends and other factors
such as environmental changes. The Fred Harvey Company is one of those companies, which
shows resiliency and ability to change and keep up with changes in the country during this era. It
has long been associated with premium ingredients and service. Regardless of the venue, these
attributes will continue to make the Fred Harvey Company successful. From its establishment, it
encounters challenges and competition from the start by other restaurants and food chains, which
have been established way before Harvey came into existence. Noting that one of the things or
factors influencing a company’s success is being new in the market, which the Fred Harvey
Company has successfully been able to manage. However, dining cars and railway stops are now
almost obsolete. The dining market no longer requires a focus on these areas. With the recent
affordability of cars for the everyday person and the development of commercial air travel,
railway travel is on the decline. The Fred Harvey Company should push into the current
emerging service industries that shows great promise for rapid growth in the 1960’s. These will
provide remerging sales growth and reenergize the Fred Harvey Company that is synonymous
with the best ingredients and superior service. This section will focus on the various facilities,
which creates or could be considered competition to the Fred Harvey Company. Also
recommendations of what Fred Harvey Company could do in order to remain competitive in the
restaurant and hospitality market.
By looking at the market, it is necessary to evaluate the transition of the American culture from
railway travel to private vehicle ownership. In the article Vehicle Ownership and Income growth
Worldwide, 1960-2030 by Joyce Dargay et al, it details the number of cars the population owns
per the population. Evaluation of personally owned automobiles in 1960 has shown to have over
74 million cars. This number is expected to triple by 2002. What does this say about the current
service needs in America? Consumers need to eat on the go. They need premium service and
fresh ingredients on the go. The Fred Harvey Company will need to progress into the fast food
marketplace. Fast food establishments are on the rise. According to the article Tastes of the
Decades, drive in food and lunch counters had rapid growth in the 1950’s. People want to be able
to drive minutes away and grab a delicious meal, which can be prepared fast. Based on the Fred
Harvey Company’s current structure, having to prepare and serve meals within the 30 min break
period of the rail stations, many of the practices can be applied to this new and exciting market
opportunity. Already, many emerging companies are starting to hit it big in this field.
McDonalds, for instance, has already opened several restaurants, and still, they cannot keep up
with consumer demands.
Competition analysis
Therefore, the first competition analysis will be of MacDonald. Established in 1937, the
MacDonald brothers successfully increased their business from one food stand in 1937, to having
228 franchises established by the beginning of the 1960s. The service at MacDonald is fast and
simple, permitting their customers to come in and out of the restaurant without necessarily
having to sit. This is how they have quickly developed into the quick stop fast food burger place
Americans have grown to love. Besides their short-staffed quick service, MacDonald also
operates as a drive-in restaurant. This has led their business to quickly grow because during this
period 1945 thru 1953, there was an increase in birth after the return of troops from World War
II, and there was also an increase in production of automobiles, like mentioned above; giving
birth to a mobile society. Some other factors which have promoted the growth of their business is
their kitchens are exposed so the customers could see how their food is being prepared, their

6. menu is short and simple, which is adequate for them given their reduced number of employees.
All these factors, including the stop and go business model made for an easy way for customers
to get their food on the go and not worry about the long wait for food to be served and sit at the
table to eat. The business under Ray Kroc in the 1960s only grew bigger, and eventually going
public in 1965. In his article, Garcia (2015) said:
The company continued to expand opening more branches in other countries. By the end
of the 1950’s, McDonald’s had established itself as a “trade name” synonymous with fast food,
despite the long list of copy-cat hamburger chains that followed and still compete with
McDonald’s today. The restaurant’s legacy is not merely in its Americanization of the
hamburger. The name “McDonald’s” has become a hallmark of Americanism globally. Now,
with restaurants on six continents, McDonald’s golden arches are as recognizable overseas as the
Stars and Stripes.
MacDonald has long started to establish a franchise business before the coming of Fred Harvey
Company. Fred Harvey Company has already succeeded in trying to establish a franchise during
this period, obtaining contracts at railroad stations for the establishment of the restaurants chain
and rest stops. The Brand that the Fred Harvey Company possesses already resonates with
consumers. People think about the premium customer service, great food and coffee, and fresh
ingredients. There is great promise for the Fred Harvey Company if they dive into this new and
emerging service field. There could be possibilities of increased sales if perhaps something is
copied from the take out service MacDonald provides. Especially considering the fact that these
trains don’t stop at the stations for too long, not providing enough time for the patrons to stop
and sit for a long meal, and providing some of their food products on the go will solve this issue
and eventually increase sales.
On a good side, competitors in this market typically just offers hamburgers and foods, which are
simple. Chick Fila and McDonalds, both companies in this emerging field, do not offer an
extensive or flavorful meal options. The Fred Harvey Company already has been making fast,
flavorful, and diverse menu options for a better part of a century. The competitors do not have
near the experience or abilities to produce such a high quality product. Even though the
competition has established franchises throughout the U.S., they cover mostly suburban areas,
having little access to the road travelers. From east coast to West coast, people know Fred
Harvey. The Fred Harvey Company can eventually move into the suburban and metro markets,
providing the same food and service previously denied due to geographic location. Many
younger generations have never been treated to the Fred Harvey experience based on the decline
of railways and the migration of population to the west coast. With the explosive population
growth of the 1940s, this allows the Fred Harvey Company to serve a brand new generation. The
recommendation is to move in the metro markets of the U.S. first. Targeting major cities such as
New York City, Philadelphia, Chicago, Washington DC, and other large metro areas. Then,
progress.
Conversely, Howard Johnson has a more competitive business model. Unlike MacDonald’s
business model, with their fast food shops opened in the suburbs, Howard Johnson has a similar
approach to Fred Harvey Company. Howard Johnson invests in opening restaurants and hotels
on highway roads, to cater to the travelers as well. The model used by Howard Johnson is really
similar to Fred Harvey Company, with the use of female waitresses who are professionally
dressed and aren’t allowed to interact with customers in a way, which will be considered
unprofessional. Howard Johnson operates his business as a family oriented business, attracting

7. not only adults but also welcoming to children. Therefore, “the waitresses are hired not for their
beauty or bust measurement but for their manners and deportment” (Alexander 1958, p. 48).
Howard Johnson also invests a lot in innovations, trying to find ways to provide food to the
customers at cheaper prices, coming up with new drinks and he even went on to buying the basic
recipe for ice cream from a pushcart peddler, coming up with the Johnson’s “28 Flavors” which
earned will expectedly earn him millions. Alexander (1958). The various locations also don’t
charge customers for coat check, also providing enough hooks for the customers to hang their
coats or hats when they get to the restaurant. This creates a customer friendly atmosphere, which
is great given the type of business they are in. After the establishment of the franchise, Howard
Johnson doesn’t visit every location to ensure quality of the business. He however is strict on
training of managers at every location, being it owned by him or by someone else. The managers
are trained in the Johnson method and take refreshers now and then to ensure that they keep the
standard of the business. Even though Howard Johnson has focused on the highways with none
to little investments in the railroads, he is a visionary, not limiting himself to the railroad perhaps
after observing the growth of the automobile industry. Howard Johnson also unlike Fred Harvey
has opened hotels, which are more modern rather than culturally inclined. The hotels provide
comfort, luxury and somewhat of a future design, with all hotels equipped with air conditioning.
This has left for possibilities of improvements to keep innovating the various hotels to portray
what it was always intended for: providing the customers with comfort and a feel of new.
Besides spreading the franchise around land transportation, another emerging market is
commercial air travel. Air travel can be many times faster than railways. In the late 1950s the
Boeing 707 was commercialized. This produced a large boost in commercial air travel. It offered
a smoother and more convenient flight from the standard piton-driven airplanes that were used.
According to the US Centennial of Flight Commission in The Era of Commercial Jets, this gave
consumers a newfound peace with riding in commercial aircraft. These commercial aircraft do
not have a reliable food and service provider. The Fred Harvey Company has already established
dining cars in railways. The company has already had the experience of serving passengers on
the go. This is a new and emerging field, and it has the Fred Harvey Company all over it. The
company will have to adapt its practices of railway service to accommodate for the space
constraints of the aircraft, but it will open an evolved consumer to the Fred Harvey experience.
Simple adaptations of the current model would produce according to The Golden Days of Air
Travel: by Katia Hetter, over 62 million people traveled on aircraft in 1960. This number will
undoubtedly swell in oncoming years with deregulation, price reductions, and technology. With
no formal competition, this would be a great avenue to boost sales in the Fred Harvey Company
and get the company back to its roots in providing great food and service to traveling consumers.
To conclude, making major business decisions also involve doing research on the competition,
current societal trends, projected changes in the market and demand and innovation. Fred Harvey
Company has established a good successful business, especially after the introduction of the
Harvey Girls, in a period where gender inequality is becoming a huge issue. Hiring of these girls
is one great business decision, which draws a lot of attention to the company, the level of
customer service provided by them and the attention to details, which is one of the main
emphases of the Fred Harvey Company. However, the focus on the train stations and a few
services established inside the train food service is a mistake. Railway transport has slowly
started to decline with the increase in automobile use and commercial airlines. Also, the
establishment of the hotels, which are, focused more on culture of the area, and built as some sort
of museum could only serve these purposes in the future. The image, which is being created, is

8. that of hotels which portray culture and tradition and do not contain anything modern. Therefore,
at some point, these hotels will be considered, as landmarks and the Fred Harvey Company will
not be able to change this image they created later on.
Consumer Need Analysis
Society and Economy in the 1950s
The 1950s was a decade of prosperity. The economy was booming again for the first time in 30
years. During the Eisenhower era, Americans achieved a level of prosperity, which had not been
seen before when standard of living increased and surpassed previous levels. The economy grew
by about 37% overall, and at the end of the decade Americans on the average had 30% more
purchasing power.
The return of troops from the Second World War also created the baby boom, which increased
demand for houses and jobs. The G.I. Bill gave military veterans affordable access to college
education and low-cost mortgages, adding a productive pool of highly educated workforce with
high paying jobs.
With the economy booming and more disposable income, spending pattern and habits changed.
During the thirties and the recession, most people could simply only afford the basics. During
the war, most of the nation’s productive capacity shifted to armaments. With consumer goods
available and more disposable income, people were ready to spend. Society was shifting from a
production society, which focused on meeting basic needs, to a consumption society, which
focused on customer’s wants. Americans enjoy high living standard, wanting more than just the
basics, use and throw away, by now pay later. Product promotion spending increased almost 3
fold (5 to 13 billion). The creation of credit cards helped promote consumerism (Shmoop, n.d.).
Americans moved from rural areas to cities and from cities to suburbs. People moved from the
Northeast to the South and West. California’s population grew by 49% and Florida’s by 79%.
During the fifties the number of cars in the US grew nearly double to 74 million cars and by
1960 80% of American families had at least one car and 15% had two or more. The National
Highway System started in 1956. The advancement of automobile allowed people to move away
from the cities to the suburbs. Drive-in movies boomed, motels growing, as well as shopping
malls. Shopping malls began to appear everywhere; by mid-fifties, 1800 shopping centers were
built.
Commercial aviation also improved with Donald Douglas, Boeing, and Lockheed all introduced
commercial passenger planes that can travel faster and longer distance, with luxurious cabin and
smoother rides, stewardesses, and a new level of comfort and services (Hubpages, 2011).
Consumer needs
With the new trains now capable of traveling much longer distance without needing to stop to
refuel, the need of trackside eateries declined all together, eventually reducing their revenue.
The revolution in railroading which had trains which stopped at stations for meals, making
railroad the main transport during that period came to an end, and turned their reign over to the
new transportation system, the bus. This change made the Harvey houses a symbol of the ancient
days and olden times (Fried, 2010).

9. $323,715,639.00
$813,417,000.00
$650,943,000.00
$0.00
$100,000,000.00
$200,000,000.00
$300,000,000.00
$400,000,000.00
$500,000,000.00
$600,000,000.00
$700,000,000.00
$800,000,000.00
$900,000,000.00
1900 1950 1959
Railroad Passenger Revenue
In the 1950s, the growth of automobile industry, interstate highway, and commercial airlines led
to a decline in train travel and railroad passenger revenue. Consumers no longer needed many
services on railroad, and there was a shift to highway side eateries and hotels, as well as airline
hospitality.
Source: U.S. Department of Statistics in conjunction with Bureau of Transportation
Railroad use by passengers has dramatically decreased since 1900. Years from 1920 to 1949
were left out due to exterior factors such as WWI, Government takeover of Railroad, and The
Great Depression.
-From 1900 to 1950 passenger levels dropped 15.72%
-From 1950 to 1959 passenger levels dropped 27.54%
-Overall since 1900 passenger levels have dropped 38.93%
-Since adoption of the National Highway systems and the introduction of motorized vehicles, the
need for passenger trains has substantially dropped.
-Railroad Revenue has increase since 1900, but factors such as pricing regulation, and increased
fares have caused this.
-Average revenue per passenger in 1900 was $1.78

10. -Average revenue per passenger in 1950 was $1.67
-Average revenue per passenger in 1959 was $1.84
-Trends shown by previous graphs indicate fewer passengers are using railways as transportation
and costs are rising. Rising costs tend to eliminate customers. Less people will use railways.
Due to this, the first major need was for highway side eateries and hotels. The Interstate
Highway Act was passed in 1956. With this, a new Interstate Highway System will be
constructed throughout the nation with 41,000 miles of new highway. Howard Johnson had a
strong presence but more in the Southeast and Midwest and along existing roadsides. The
Southwest and West was underserved. The new highway system will open up new opportunities
and needs for highway side dining and lodging. The growth of the interstate highway and the
automobile industry also fueled automobile travel. The total number registered motor vehicle
increased significantly to over 70 million vehicles.
Source: Highway Statistic 1960- US Department of Commerce
Next, the second major need was for airline hospitality. The advancement of airplane technology
significantly improved quality of air travel and enabled the growth of commercial aviation. The
airlines now have sound proof and pressurized cabin air planes with stewardess who made air
travel better and more enjoyable. Commercial air travel passengers and revenue continued to

11. increase. The growth of commercial aviation caused a growth in airports and a need in airport
food eateries as well as in flight food services.
Source: Historical Air Traffic Data – Bureau of Transportation Statistics
Furthermore, the third need was for eateries by shopping centers. As new shopping malls or
centers were built, there was a need for fast food restaurants and motels near shopping areas.
With the rise of consumerism, Americans spent more time and money at shopping centers.
The fourth need was for national park tourism. El Tovar at Grand Canyon continued to be a
great source of revenue for Fred Harvey Company. Throughout the depression the Grand
Canyon remained crowded. The company had a few smaller national park facilities in Painted
Desert, Death Valley, and La Fonda. Even with the economic crisis and the war, visitors
continued to flock to these national parks.
Overall, the 1950s was a decade of prosperity. Post war economy was booming and fueling
consumerism. The growth of the automobile industry, national highway system, and commercial
airlines all contributed to the decline of railroad passenger services, needs, and revenue.
Consumer needs shifted from railroad traveling and services to air travel and services,
automobile travel and highway side services, and customer services with the rise of shopping
centers and consumerism.
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
1954 1955 1956 1957 1958 1959 1960
Revenue Passenger Enplanements
Revenue Passenger
Enplanements

12. SWOT Analysis &Strategic recommendations:
As the first step of the strategy formulation, Harvey Company must consider, evaluate and
analyze the company’s position using SWOT analysis. With the insight into SWOT analysis,
following strategic moves can be recommended in order to save the company from moving
towards bankruptcy or disaster. 1) The company will have to use existing resources to invest the
same model in different ways around upcoming highways. 2). Harvey company must expand
their same business operation into the airline industry with the emphasis of the Harvey Girls 3).
Company must diversify the business operation vertically, horizontally and different business
model, yet related to current business expertise.
SWOT ANALYSIS - HARVEY COMPANY DURING 60's
Strengths Weaknesses
1. Reputation/Recognition 2. Well
trained Harvey Girls
1. Weak Management 2. Centralized
Experience
3. Assets 4. Core competencies 3. Lack of innovation
Opportunities Threats
1. Highway Restaurants 2. Airport
Restaurants
1. Revivals competition 2. Job market open
for women
3. Airline Catering 4. Vertical
&Horizontal integration 3. Foreign companies’ investments in the US.
5. Foreign Investments 4. Government Regulations.
Above chart represents current business position of the company. According to the SWOT
analysis, the company has several strengths. It has a well-established reputation where people
know the company for its high quality service and foods. Also well-trained Harvey Girls are a
great strength which they can make use of for their future projects. Besides that, the company
also has tangible and non tangible assets that can be used for their new business ventures.
Finally, their experience in running hotel industry is strength in their future business moves.
However there are some weaknesses of the company too. Weak management is the biggest weak
pint of the company. After the company went out of the Harvey family’s management, it hasn’t
had an effective management team. More so, the management mainly operated only in railroad
related hotel industry and didn’t explore nor did they have any experience in other industries.
Then, the Harvey Company barely embraced the innovation. Also, there are many opportunities
lined up right now, since the government is promoting highways and giving subsidies, there is an
opportunity to start highway restaurant chain using their other existing resources. They can do
the same thing for the airline industry as well. With the increase in airline travels, the company
can start foreign investments. Since the job market is already opened to women, the company

13. will have no difficulties in finding suitable candidates for Harvey Girls when there is need for
expansion.
Strategic recommendations:
First recommendation is the company will have to use existing resources to invest the same
model in different ways around upcoming highways. Currently Federal government is promoting
highways around the country, which will enable motorist to travel long distances. Travelers
already know the Fred Harvey Company as a quality service rest stop. With this project, the
company should closely work with government to establish restaurants on the highways, that
way government can provide additional support, which is required to establish the business.
Possibly, there will be some incentive programs to promote investors related to highway projects
(double promotion). With this help, they will need to consider establishing at least small Harvey
Houses at each proposed highways and later they can be developed into larger hotels depending
on the traffic. They will also need to reinvent their menu, adding more to it, or making those
already available better, with possibilities of different taste in food and services from the road
travelers.
Second recommendation is the Harvey Company must expand their same business operation into
the airline industry with the emphasis of Harvey Girls. With the increased airline travels, there is
a huge demand for restaurants at the airports. Since the government is currently investing on
airport and airline related projects, the company can easily expand the operation to this sector.
However, Harvey girls might need to be trained particularly for airline industry, given the
possible diversity in airline travelers. Airline travelling comes with its own complications, the
Harvey Company will have to deal with foreign customers and Harvey girls will need training on
foreign cultures, foods and customs etc. Also, company should strive to establish at least one
Harvey house in each airport. Another opportunity is airline-catering service. Harvey Company
can move on to Airline catering business with its expertise and recourses. However, as it was
mentioned above, the company should gain good understanding about foreign passengers and
their specific dining requirements to start this business. They should closely work with the
government, local airline and airline agencies, trying to get a deal to get this business completed
successfully.
The company must diversify the business operation vertically, horizontally and different business
model, yet related to current business expertise. This is very important area of strategic move.
The company will need to carefully evaluate the possibilities of mergers of similar companies to
obtain different expertise that is required for airline and highway industry. Companies must be
selected carefully as some of the company’s operations and reputation may not be totally suitable
for Harvey company operation. More so, the company can consider vertical mergers too. This
will be a very good move in the catering service to merge with other food catering companies.
For example, vegetable suppliers, meat and fresh fish suppliers or transporters may be good
candidates for these mergers. Vertical mergers will be advantageous because the company can
obtain supplies at a cost effective price and the way it needs. This is very important in the airline
catering industry. Harvey Company has a very good opportunity to consider foreign investments.
With the increased airline travels more business opportunities are available for the company to
move into travel industry. In the beginning they can start their Harvey House at an Airport where
U.S. airline frequently fly. This then can be expanded to other airports as well. Later, they can

14. move completely into a different business model, depending on the foreign country’s market
requirements.
The Rationale behind the strategic recommendations above:
Since the company already has an elegant blueprint on the different yet complex aspects of its
business, it is apparent that more investment is needed in the changing times to conform to the
fast paced trend. Competition obviously is on the rise and more Harvey Houses and eateries
around railway stations are already expecting to be rolled out. Capitalizing on the already
established relationship with the Federal government and the highways linking small town
America with big cities (Route 66 for example spiraling from Illinois to California (Wikipedia)),
and the newly commissioned Interstate Highways (Wikipedia) connection all nook and crannies
of the union, the company should begin investments especially in big cities where these
highways will go through or within close proximity. Here the company is actually introducing
itself to new markets and perhaps feeding the whole nation as oppose to the West, where was its
forte. Its service could be segmented where instead of more formal dinning as it was had back
then; the need for a coat will be relaxed as the Harvey Houses are now serving a more diverse
America. Here segmentation can be introduced, where although the same quality of food and
service is provided, but a slightly lower grade (an informal setting to be precise). This broadens
the base of the business and attracts more people, in addition a more relaxed menus, since
Americans are now getting into fast foods. The other parts of the business into books and printed
materials can also be expanded in the pocket rest areas scattered on these highways. Material
introducing Fred Harvey can be given for free and points on maps showing where the next or
closest restaurant can be found (Wikimedia Foundation, 2015)
Secondly, the introduction price, product, place, and promotion rationale. Already, Fred Harvey
has the knack for pricing and it is competitive in that aspect. The product with respect to its
services have always been top notched (except from the rush during WWII when they lax in the
hiring of Harvey Girls), it appears that the boggling issue during this era will be location. How
effective will each restaurant be to the business at this time? The airline industries are picking up
steam, what airports have the most traffic and which are known to be prime for connecting
flights? Restaurants can be established at airports where there is more traffic and those airports
used more frequently for connections and layovers can have Harvey Hotels. The competition is
fierce right about now, Fred Harvey has built a model being copied by numerous companies both
big and small, but venturing into airline catering will definitely be a winner. There is a track
record already, but for decades Fred Harvey has been servicing train with its dining cars
(Appetite for America pg. 41), so why not provide excellent food service on flights, thereby
giving the customers a taste of what they can get when they visit a Fred Harvey restaurant at
their layover or at their destinations? Since most hostesses are comprised of females, the Harvey
Girls already have the experience to service their customers; this should give an edge to Fred
Harvey over its competition. What other way to welcome foreigners to the United States, and a
showcase to potential foreign investors who might want to have a first look at the style in which
Fred Harvey services its customers? Likewise there is some effort or form of promotion taking
place. If servicing an airline for example TWA and napkins are handed over, a reference can be

15. made to the Fred Harvey brand such as “FLY WITH US AGAIN and Enjoy the Fred Harvey
Sensational Meal” (Fried, 2010).
The Fred Harvey Company, although diversified, was not in itself well managed at this time. It
appears innovation is lacking and the only way to grow in this era was to be a leader and not be a
passive one at that. The company will have to go public as the investment needed carry on these
new expansions is grand. It is not always the case to build from scratch, smaller companies can
be acquired, which should save a lot of time in re-organizing to begin servicing customers.
Although the company started of as a family owned business which had mostly the values of
Fred Harvey himself, this modern times should be incorporated with the trend of the era.
Horizons should be tested and other business ideas in line with the vision of the company should
be explored. New management enacted, those who have better understanding of the different
regions of the country given autonomy to have practices that although are inline with the parent
companies vision, but are suitable to generate business for its locale (Fried, 2010).
Conclusion
The Fred Harvey Company certainly left its mark in American history, and till this day, a lot of
people travel to the mid west in order to have the Fred Harvey Company experience. Sure they
probably still make a lot of money as a touristic site but they definitely could have been as big as
they were before today. They just couldn’t keep up with the competition and the changes going
on in the U.S. at the time, thus giving route for other fast food, restaurant and hotel chains to be
established. The fact that most if not all of their hospitality service didn’t invest in modern and
infrastructure like did Howard Johnson is another factor, which could be considered for their
decline. The analysis above touched based on various strategic recommendations which
would’ve made the Fred Harvey Company remain relevant in the fast growing hospitality
business which they once where considered a big competition. A lot could be learned from this
by other companies in order for them to be able to implement strategic marketing ideas, which
will ensure them to stay competitive in their market. Innovation and market research are one of
the key reasons the Fred Harvey Company didn’t turn out a bigger success which they definitely
had possibilities for. With the great tools they had; Harvey Girls, which drew so much attention
to them during that period (fight for gender equality) and the name they had made for themselves
among travelers could’ve been used to their advantage during their expansion. With great
management and a study of changes in the country at the time, they could’ve been more
diversified, increasing their market share. Marketing managers need to be able to assess the
current situation of a company, and be able to make good predictions of where the company
could gain more market share.

16. References
Alexander, J. (1958). HOST Of The Highways. Saturday Evening Post, 231(3), 16-50.
Fried, S. (2010). Appetite for America: Fred Harvey and the Business of Civilizing the Wild West--One
Meal at a Time (Kindle Location 323). Random House Publishing Group. Kindle Edition.
Garcia, M. J. (2015). McDonald's Restaurants. Salem Press Encyclopedia,
Hubpages. (2011). A History of Commercial Airlines. Retrieved from
http://hubpages.com/technology/A-History-of-Commercial-Airliners#
NA, (2015). Interstate Highway System. Wikimedia Foundation. Retrieved from.
https://en.wikipedia.org/wiki/Interstate_Highway_System
NA, (2015). U.S Route 66. Wikimedia Foundation. Retrieved from
https://en.wikipedia.org/wiki/U.S._Route_66
NA, (2005). Harveyhouses. Retrieved from http://www.harveyhouses.net/fredco.html
Railways Times. Vol. 80, Released 1901 (PP167-PP168).
Shmoop (n.d.). Economy in the 1950s. Retrieved from http://www.shmoop.com/1950s/economy.html
Statistical Abstract of The United States, 83rd
edition (PP576). Compiled by Edwin Goldfield, Released by
U.S. Department of Statistics in conjunction with Bureau of Transportation. Retrieved from
http://library.cqpress.com/cqresearcher/document.php?id+cqresrre1931070900
Tastes of the Decades (accessed on November 7th
, 2015). Retrieved from http://restaurant-
ingthroughhistory.com/tastes-of-the-decades/
The Era of Commercial Jets by US Centennial of Flight Commission (Accessed on November
7th
, 2015). Retrieved from
http://www.centennialofflight.net/essay/Commercial_Aviation/Jet_Era/Tran7.htm
The Golden Days of Air Travel: by Katia Hetter. (20112). Retrieved from
http://www.cnn.com/2012/05/25/travel/nostalgia-travel/
Vehicle Ownership and Income Growth Worldwide, 1960-2030 by Joyce Dargay et al (2007).
Retrieved from
http://www.econ.nyu.edu/dept/courses/gately/DGS_Vehicle%20Ownership_2007.pdf