2. Table of Contents
Executive Summary..............................................................................................................................................................1
1 Company Analysis..............................................................................................................................................................2
1.1 The Company ...................................................................................................................................................................2
1.1.1 Brand Image............................................................................................................................................................2
1.1.2 Brand Logo...............................................................................................................................................................2
1.1.3 Human Resource Management.......................................................................................................................2
1.1.4 Corporate Social Responsibility .....................................................................................................................2
1.2 Organizational Structure ............................................................................................................................................3
1.2.1 Internal Analysis ...................................................................................................................................................3
1.2.2 Production and Product Categories..............................................................................................................3
1.2.3 International Involvement................................................................................................................................4
1.3 S.W.O.T. Analysis............................................................................................................................................................4
1.4 Industry Analysis ...........................................................................................................................................................4
1.4.1 Porter’s 5 Forces ...................................................................................................................................................4
1.4.2 Herfindahl-Hirschman Index (HHI)..............................................................................................................5
2 Global Market Search.......................................................................................................................................................5
2.1 Country Selection...........................................................................................................................................................5
2.1.1 Region ........................................................................................................................................................................5
2.1.2 Country Comparison ...........................................................................................................................................6
2.2 Country Criteria..............................................................................................................................................................6
2.3 Country Evaluation.......................................................................................................................................................7
2.4 Conclusions and Recommendations......................................................................................................................7
3 Market Analysis...................................................................................................................................................................7
3.1 Pest Analysis ....................................................................................................................................................................7
3.1.1 Switzerland..............................................................................................................................................................7
3.1.2 Japan...........................................................................................................................................................................8
3.1.3 Canada .......................................................................................................................................................................8
3.2 Market Attractiveness and Growth Potential....................................................................................................9
3.3 Competitive Analysis....................................................................................................................................................9
3.3.1 Main Competitors .................................................................................................................................................9
3.3.2 Market Entry........................................................................................................................................................10
3.3.3 Other Competition.............................................................................................................................................10
3.4.1 Country Side-By-Side Selection...................................................................................................................10
3.4.2 Evaluation and Country Selection ..............................................................................................................11
4 Marketing Plan..................................................................................................................................................................11
4.1 Market Entry Mode....................................................................................................................................................11
4.2 Product............................................................................................................................................................................11
4.3 Price..................................................................................................................................................................................11
4.4 Promotion......................................................................................................................................................................12
4.5 Placement.......................................................................................................................................................................12
4.6 Sales Forecast and Projected Income Statement ..........................................................................................12
Recommendations .............................................................................................................................................................13
References...............................................................................................................................................................................14
Appendix...................................................................................................................................................................................15
3. 1
Executive Summary
This marketing plan has been developed for the fast food company Shake Shack. Shake Shack
has experienced tremendous growth in the past couple of years both domestically and
internationally. By expanding into a new international market, Shake Shack will be able to
continue its successful growth. The analysis in this marketing plan will explore the most
attractive countries for Shake Shack to enter as their next international expansion.
The research done in this analysis identified Canada as the most attractive market for Shake
Shack to expand into. Canada has a thriving economy, high urban population, and second highest
per capita expenditure on burger fast food. The highest competition in the Canadian fast food
market comes from McDonald’s Corporation.
Shake Shack should market themselves through their social media accounts and promote the fact
that they use only “good ingredients” as well as their commitment to the environment, their
employees, and their communities. They should host local events such as Ping-Pong and dodge
ball tournaments as well as implementing their free community fitness program, Shack Track &
Field, at the Canadian location.
The recommended entry mode is that Shake Shack work with an exclusive international partner
who will license and operate the Shake Shack location in Canada
4. 2
1 Company Analysis
1.1 The Company
1.1.1 Brand Image
Shake Shack is a fast, casual restaurant chain that is designed as a modern day roadside burger
stand. They are known for their burgers, hot dogs, frozen custard, shakes, beer, wine, and more.1
Shake Shack considers themselves to be the “anti-chain chain”. In order to achieve these, they
approach every decision they make by acting like they only have one restaurant. In this way, they
are able to ensure they continue to think small and use their culinary heritage.2
1.1.2 Brand Logo
Shake Shack’s current logo is an extremely simplified, line drawing of a burger in bright green.3
The simplicity of the logo relays many different aspects of Shake Shack quickly and easily. The
logo depicts Shake Shack’s most popular product while referencing their commitment to being
green in the ingredients they use and their interactions with the communities they are located in.
1.1.3 Human Resource Management
Shake Shack stands for following the 5 tenants of enlightened hospitality of (taking care of each
other, our guests our community, our suppliers and our investors). Shake Shack strives to bring
together caring, warm, fun, intelligent people who love to serve. One of Shake Shack’s biggest
missions as they grow is to grow more team members into leaders making good salaries and
getting good benefits supporting their families. 4 In addition to paying higher-than-average
wages, the company has a program called Shack Dollars through which it gives the hourly team
1 percent of sales off the top line every day. Shake Shack is committed to their roots; therefore,
any Shake Shack manager from any location is required to spend between two and four weeks
working at the original Madison Square Garden’s location.5
1.1.4 Corporate Social Responsibility
Shake Shack is deeply committed to the environment, their employees, and the communities they
are located in. Shake Shack is also committed to not only being a part of but also giving back to
the communities they are located in.6 They are also committed to minimizing their impact on the
environment by using reclaimed materials throughout all of their locations.7 Shake Shack places
high priority on not only hiring employees who are committed to hospitality but also providing
their employees opportunities to grow within the company.8 They also are strongly committed to
connecting with the communities they are located in through ensuring they understand and listen
1
https://www.shakeshack.com/
2
https://www.shakeshack.com/press/eater-com-shake-shack-ceo-randy-garutti-on-building-an-anti-chain-burger-company/
3
http://www.shakeshack.com/
4
https://www.shakeshack.com/join-our-team/
5
http://www.qsrmagazine.com/reports/5-tips-shake-shack?page=2
6
https://www.shakeshack.com/
7
http://www.inc.com/jeff-haden/shake-shack-ceo-the-anti-chain-burger-chain.html
8
https://www.shakeshack.com/press/eater-com-shake-shack-ceo-randy-garutti-on-building-an-anti-chain-burger-company/
5. 3
to them as well as actively engaging them.9 They achieve this through programs such a Shack
Track & Field, a free community fitness program, as well as hosting events such as tennis table
tournaments.10
1.2 Organizational Structure
1.2.1 Internal Analysis
Shake Shack started in 2001 as a hot dog cart in Madison Square Park in Manhattan, New York
and was created by Danny Meyer’s Union Square Hospitality Group (USHG).11 USHG owns a
total of 11 restaurants as well as a catering division12 and has earned an unprecedented 25 James
Beard Awards as well as consistently appearing on Zagat’s Most Popular List.13 In 2004, USHG
won the bid to open Shake Shack’s first permanent location in Madison Square Park.14 Since its
opening, Shake Shack has grown to be the largest part of the USHG's portfolio. Its average store
performance of US $4 million is more than twice that of McDonald's average store performance
within the United States.15 Shake Shack currently operates as a private company; however, they
intend to pursue initial public offering (IPO) and are preparing to go public.16
1.2.2 Production and Product Categories
Shake Shack produces a variety of menu items including burgers, hot dogs, fries, frozen custards,
shakes, beer, wine, and lemonade. Shake Shack prides themselves on using only “good
ingredients” and uses only 100% all-natural Angus beef, that is vegetarian fed, humanely raised
and source verified and there are never any hormones or antibiotics.1 Shake Shack also sells
apparel and accessories (shirts, hats, bags, sunglasses and watches) at their locations as well as
online. The majority of gear in the Shake Shack Shop is made from eco-friendly materials;
manufactured by apparel companies that are focused on environmental and social
responsibility.17
9 9
https://www.shakeshack.com/join-our-team/
10
https://www.facebook.com/ShackTrackAndField/info
11
https://www.shakeshack.com/
12
http://www.ushgnyc.com/family/restaurants/
13
http://www.ushgnyc.com/company/
14
https://www.shakeshack.com/
15
http://www.cnbc.com/id/39679233
16
http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=228987805
17
https://shop.shakeshack.com/index.php?statp=stand_for_something_good
6. 4
1.2.3 International Involvement
Although Shake Shack views themselves as the “anti-chain chain”, they have experienced
extremely successful expansion. Over the past 10 years, Shake Shack has expanded throughout
the East Coast of the United States as well as to England, Russia, Turkey, United Arab Emirates,
Kuwait, and Qatar. Of these 55 locations, 31 are located within the United States and 24 are
located internationally.18 Shake Shack has proven they are able to efficiently not only adapt but
also connect to the different cultures they expand to while also staying true to their roots by
slightly altering the menu and interior while also adding a location specific concrete to the menu
of every location.19
1.3 S.W.O.T. Analysis
Strengths: Shake Shack’s “anti-chain chain” approach has factored largely into the company’s
success. By following this mantra, they take their time and ensure that the communities they
expand too will enthusiastically accept them. Shake Shack also
makes sure to relate to, listen to, and engage the communities in
which they operate. Shakeb Shack aims to be an affordable luxury
for their consumers in the current economy. Another aspect of Shack
Shack’s success is their dedication to sustainability and ensuring that
they consistently use high quality ingredients as well as their
promotion of a team environment, positive culture, and leadership
opportunities among their employees.
Weaknesses: Shake Shack has a noticeable lack of advertisements
and instead relies heavily on their own social media accounts such as
Facebook, Twitter, and Instagram. However, while this may limit
the number of people Shake Shack is able to reach, it allows them to
maintain the brand image of an “anti-chain chain”.
Opportunities: Shake Shack has experienced considerable success in both domestic and
international expansion. A major opportunity for Shake Shack is to expand not only to the west
coast of the United States but also to an increased number of countries. With their 24 current
international locations thriving, Shake Shack is primed to expand to even more new countries.
Threats: The food and burger court market is extremely competitive, and is therefore a major
threat to Shake Shack. There are many American burger style restaurants both domestically and
internationally that are direct competitors of Shake Shack.
1.4 Industry Analysis
1.4.1 Porter’s 5 Forces
Threats of Potential Entrants: For the fast food industry, barriers to entry are considerably low;
therefore, there is a high threat of potential entrants to the industry that could potential become
threats to Shake Shack.
Threats of Substitutes: The fast food industry is highly competitive and is a saturated market;
therefore, the threat of substitutes to Shake Shack is extremely high. Consumers have many other
options when it comes to finding similar products.
18
https://www.shakeshack.com/
19
https://www.themoscownews.com/business/20131220/192120720/NY-chain-Shake-Shack-brings-burger-culture-to-Moscow.html
Strenghths:
Brand Image
CSR
Affordability
Sustainabilty
Weaknesses:
Lack of Ads
Opportunities:
Domestic
Expansion
International
Expansion
Threats:
Competitors
7. 5
Bargaining Power of Suppliers: Fast food companies have many options when it comes to
where they are obtaining their products. Because there are so many vendors offering the same
goods, a company can easily choose to buy from one
vendor instead of another. Therefore, there is very low
bargain power of suppliers.
Bargaining Power of Buyers: The fast food industry is
extremely competitive and there are many fast food
restaurants that offer similar menu items to Shake
Shack. Because consumers have so many options when
it comes to where they purchase their food, there is high
bargaining power of buyers.
Intensity of Rivalry: Intensity of rivalry within the fast
food industry is very high. The fast food industry has an
extremely high growth rate and therefore and increasing
number of competitors. The industry concentration is
expect to continue to grow over the next 5 years with many company’s experiencing increase
success through franchising.
1.4.2 Herfindahl-Hirschman Index (HHI)
Table 1 HHI Index
Company Sales (2013, $ Billions) Market Share
McDonald’s Corporation 89,125 16.6%
Yum! Brands, Inc. 55,502 11.1%
Others 402,711 72.3%
HHI 275.56
Source: IBISWorld.com
The HHI Index is a measure of market concentration ranging from 0 to 10,000. The greater the
HHI number is, the greater the concentration. The U.S. Department of Justice state considers a
market to be a competitive marketplace if the result is less than 1,000. The fast food industry is
extremely competitive with an HHI index of 275.56. Shake Shack is categorized as “Others” as
are many other fast food companies that have smaller market shares. McDonalds is Shake
Shack’s main competitors and holds one of the largest market shares in the industry.
2 Global MarketSearch
2.1 Country Selection
2.1.1 Region
Shake Shack is currently located in only seven countries worldwide; therefore, there is
opportunity in many regions for their entry into a new market. Presently, Shake Shack is only
operating in one European country; however, this region has a high GDP per capita as well as a
high population, making the prospective of expanding within this region extremely appealing.
Intensity
of Rivalry:
High
Threat of
Potential
Entrants:
Hight
Bargaining
Power of
Buyers: High
Threat of
Substitutes:
High
Bargaining
Power of
Suppliers:
Low
8. 6
2.1.2 Country Comparison
In order to asses which three countries should be considered as potential countries for Shake
Shack to enter, variables will be taken into consideration that are necessary for Shake Shack to
consider before expanding into a new market. A Lickert Scale will be utilized to rate the selected
criteria as well as weigh their importance to the fast food industry and ultimate relevance to
Shake Shack’s decision of what country they should expand into. The countries being evaluated
are Sweden (SE), Netherlands (AN), South Korea (KR), Germany (DE), Canada (CA), South
Africa (ZA), and Australia (AU), Japan (JP), France (FR), Switzerland (CH).
Table 2 Country Side-By-Side Comparison
Factors Wt . SE KR AN DE JP FR CH CA ZA AU
Ease of Doing
Business20
11 5 27 14 29 31 20 16 43 10
Rank (1-5) 4 5 3 2 3 2 4 4 1 4
Weight 20% .8 1 .6 .4 .6 .4 .8 .8 .2 .8
Population
(Mil.)21
9.72 49.03 16.87 81.00 127.1 66.26 8.06 35.52 53.14 23.63
Rank (1-5) 1 2 1 4 5 3 1 2 2 1
Weight 25% .25 .5 .25 1 1.25 .75 1 .5 .5 .25
GDP/capita 40.9 33.2 43.3 39.6 37.1 35.7 54.8 43.1 11.5 43
Rank (1-5) 4 3 4 4 3 3 5 4 1 4
Weight 25% 1 .75 1 1 .75 .75 1.25 1 .25 1
Expenditure
on Burger
Fast
Food/Capita
135.0 20.7 41.5 51.1 63.7 76.0 66.7 160.0 29.9 100.1
Rank (1-5) 5 1 2 2 3 3 3 5 1 4
Weight 30% 1.5 .3 .6 .6 .9 .9 .9 1.5 .3 1.3
Overall 100% 2.65 2.55 2.45 2.8 3.5 3.0 3.75 3.6 1.85 3.35
Source: CIAWorldFactbook.com, *EBSCOhost 1
2.2 Country Criteria
In the Lickert scale above, I assess the ease of doing business, the population, the GDP per
capita, and the expenditure on burger fast food per capita. These criteria will help to determine
which three countries should undergo further analysis to decide where Shake Shack should
expand their business. Ease of doing business is essential as it ranks the regulatory environment
20
http://www.doingbusiness.org/rankings
21
http://www.worldometers.info/world-population/population-by-country/
9. 7
and how it is beneficial to the business operations and would make expanding there a smoother
process.22 GDP (Gross Domestic Product) per capita indicates the economic productivity of the
country and allows the county’s wealth to be assessed. Population helps to show how many
potential customers would be in a specific countries market. Expenditure on burger fast food per
capita shows how much each country typically spends specifically burgers from fast food
companies.
2.3 Country Evaluation
In the Lickert scale above, each country was ranked from 1-5 based on the data of each variable,
with 5 being the best and 1 being the worst. Based on which variable was more significant in
regards to expansion in the market, the weight each variable was assigned was determined. The
Lickert scale clearly shows what variables are most important and which countries have the
highest scores; therefore, helping to deduce which countries are the best candidates for Shake
Shack to expand into.
2.4 Conclusions and Recommendations
Table 1 shows you the three countries with the highest scores. The countries that ranked the
highest within the variables are Switzerland, Japan, and Canada. Now that these countries are
selected, further analysis on these countries will be made in order to narrow it down to one
location. Once this is completed, we will figure mode of entry into the country along with other
important factors when entering a new country for business.
3 MarketAnalysis
3.1 Pest Analysis
3.1.1 Switzerland
Switzerland is located in central Europe, east of France and north of Italy. Its main cities are
Zern, with a population of 341,730, Geneva with a population of 183,981, Basel with a
population of 164,488, and the capital, Bern, with a population of 121,631.23
Political Factors: Switzerland’s government type is formally a confederation but similar
in structure to a federal republic. Their legal system is a civil law system.
Economic Factors: Switzerland has a per capita GDP that is among the highest in the world.
The country’s GDP per capita is $54,800 and the GDP is $371.2 billion with a growth rate of
1.9%. Their currency is in Swiss Francs, one of the world’s strongest currencies, with an
exchange rate of 1 Euro equaling 1.022 US Dollars.24
Social Factors: Switzerland has a population of 8.06 million people with a negative growth rate
of 1.1%.25 The age distribution from 0-14 years is 15.1%, from 15-24 years is 11.4%, from 24-54
years is 42.9%, and from 55 years and over is 29.3%. Switzerland’s official languages are
German (64.9%), French (22.6%), and Italian (8.3%).2627
22
http://data.worldbank.org/indicator/IC.BUS.EASE.XQ
23
http://www.geonames.org/DE/largest-cities-in-germany.html
24
http://data.worldbank.org
25
http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG
26
https://www.cia.gov/library/publications/the-world-factbook/geos/sz.html
27
http://www.indexmundi.com/switzerland/age_structure.html
10. 8
Technological Factors: Switzerland has 4.382 million main line telephone users and 10.46
million mobile cellular users. They have 5.301 million Internet hosts and 6.152 million Internet
users. Switzerland has a highly developed manufacturing industry that specializes in high-
technology.28
3.1.2 Japan
Japan is located in Eastern Asia and is an island chain between the North Pacific Ocean and the
Sea of Japan, east of the Korean Peninsula. Its main cities are it’s capital, Tokyo, with the
population of 8,336,599, Yokohamo with the population of 3,574,443, Osaka with the population
of 2,592,413, and Nagoya with the population of 2,191,279.
Political Factors: Japan has a parliamentary government with a constitutional monarchy. They
operate within a civil law system based on German model that also reflects Anglo-American
influence and Japanese traditions.29
Economics Factors: Japan has a GDP of $4.729 trillion, the world’s third highest GDP, with a
growth rate of 1.5%. Their currency is in Yen with an exchange rate of 1 Yen equaling 0.008347
US Dollars.
Social Factors: Japan has a population of about 127,103,388 people with a population growth
rate of -0.2%. The age structure consists of ages 0-14 at 13.2%, ages 15-24 at 9.7%, ages 25-54
at 38.1%, and ages 55 years and over at 39.0%. Their official language is Japanese.3031
Technological Factors: There are 64.237 million main line telephone users and 138.363 million
mobile cellular users, the 7th highest in the world. Their telephone system is a very high level of
modern technology and has excellent service of every kind. There are 64.453 million Internet
hosts, 2nd highest in the world, and 99.182 million Internet users, 3rd highest in the world.32 Japan
is a master of high-technology and is among the world’s most technologically advanced
producers of motor vehicles and electronic equipment.
3.1.3 Canada
Canada is located in northern North America, north of the conterminous US. Its main cities are
Toronto with a population of 4,612,191, Montreal with a population of 3,268,513, Vancouver
with a population of 1,837,969, and Calgary with a population of 1,019,942.33
Political Factors: Canada is a parliamentary democracy and a federation with a constitutional
monarchy. They operate within a common law system except for Quebec where civil law is
based on the French
Economic Factors: Canada’s GDP per capita is $43,100 and the GDP is $1.518 trillion with a
growth rate of 1.2%. Their currency is in Canadian Dollars with an exchange rate of 1 Canadian
Dollar equaling 0.8794 US Dollars. Canada resembles the US in its market-oriented economic
system, pattern of production, and high living standards.34 35
28
https://www.cia.gov/library/publications/the-world-factbook/geos/sz.html
29
ttps://www.cia.gov/library/publications/the-world-factbook/geos/sz.html
30
https://www.cia.gov/library/publications/the-world-factbook/geos/fr.html
31
http://www.indexmundi.com/japan/age_structure.html
32
https://www.cia.gov/library/publications/the-world-factbook/geos/ja.html
33
http://www.geonames.org/DE/largest-cities-in-canada.html
34
https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html
35
http://data.worldbank.org/indicator/SP.POP.GROW
11. 9
Social Factors: Canada has a population of 38,834,841 with a growth rate of 1.2%. Their age
structure consists of ages 0-14 at 15.5%, ages 15-24 at 13.7%, ages 25-54 at 41%, and ages 55
years and over at 30.8%. Canada’s official languages are English (58.7%) and French (22%). 36
Technological Factors: There are 18.01 million main line telephone users and 26.263 million
mobile cellular users. There are 8.743 million Internet hosts and 26.96 million Internet users.
Canada is a high-tech industrial society.37
3.2 Market Attractiveness and Growth Potential
Figure 2 shows the top three countries for entry and where they rank in terms of growth and
attractiveness. Because of Switzerland’s high GDP growth rate, it ranked as the largest growth
potential. Canada, however, ranked as most attractive due to economy and market size. The size
of the countries bubbles correspond to the size of their population.
Figure 3 Attractiveness vs. Growth
Source: Author
3.3 Competitive Analysis
3.3.1 Main Competitors
The top global players in the fast food industry are McDonald’s Corporation and Yum! Brands,
Inc. with a combined market share of 27.7%.
In Switzerland, McDonald’s is the biggest competition with 14% market share of food service
and 48 outlets in fast food at the end of 2013. The second biggest competition is Burger King
with 2% market share. This illustrates the first-to-market advantage McDonald’s can
experience.38
36
http://www.indexmundi.com/canada/age_structure.html
37
https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html
38
http://www.euromonitor.com/fast-food-in-switzerland/report
Canada
Switzerland
Japan
L
e
s
s
G
r
o
More
Attractive
L
e
s
s
G
r
o
More Growth
Less
Attractive
Less
Growth
12. 10
In Japan, McDonalds is the largest competition with the highest market share and the second
biggest competitor is MOS burger. MOS burger has a definite advantage of being native to
Japan.39
In Canada, McDonalds is the largest competition with 25% market share of food service. 40
3.3.2 Market Entry
Shake Shack should approach market entry in the same manner they have for their other 24
international locations. They should enter the Canadian market by working with an exclusive
international partner who will license and operate the new location in Canada.
3.3.3 Other Competition
Other competition that would effect Shake Shack and would serve as a threat to them is full-
service restaurants, many of which also offer take-out and home delivery services, as well as
supermarkets and convenience stores that offer froze, pre-packaged, and ready to eat meals.
3.4 Country Selection
3.4.1 Country Side-By-Side Selection
Table 3 shows all of the criteria that are important in making the final decision on which country
to enter. The criteria in this table were an extension off of Table 2. I added the unemployment
rates and the percentage of the population below the poverty line. These factors are important
because the larger the population that is unemployed or below the poverty, the less potential
customers they could have. Also, the population 15-54 was an added criterion because younger
age groups have a greater propensity to purchase take-out foods. The final addition was the urban
population. There are more consumers and those looking for fast-food options. These new
additions helped to visualize more specifics about the three countries. To see the scale used to
weigh these factors, refer to the Data Range Exhibit in the Appendix.
Table 3 Country Side-By-Side Comparison
Factors Weight Switzerland Japan Canada
Ease of Doing Business 20 29 16
Rank (1-5) 4 3 4
Weight 10% .4 .3 .4
Expenditure on BurgerFast Food/Capita 66.7 63.7 160.0
Rank (1-5) 3 3 5
Weight 15% .45 .45 .75
GDP/capita 54.8 37.1 43.1
Rank (1-5) 5 3 4
Weight 10% .5 .3 .4
Population (Mil.) 8.06 127.1 35.52
Rank (1-5) 1 5 2
Weight 15% .15 .75 .3
Unemployment Rate 3.2% 4.1% 7.1%
39
http://www.euromonitor.com/fast-food-in-japan/report
40
http://www.euromonitor.com/fast-food-in-canada/report
13. 11
Rank (1-5) 3 3 1
Weight 10% .3 .3 .1
Population below poverty line 7.6% 16% 9.4%
Rank (1-5) 2 1 3
Weight 15% .3 .15 .45
Population Ages 15-54 (Mil.) 54.3% 47.3% 54.7%
Rank (1-5) 5 4 4
Weight 15% .75 .6 .6
Urban Population 73.7% 91.3% 80.7%
Rank (1-5) 4 5 4
Weight 10% .4 .5 .4
Overall Rating 100% 3.25 3.35 3.4
Source: CIAWorldFactbook.com
3.4.2 Evaluation and Country Selection
The Table 3 country side-by-side comparison shows that out of the 3 countries that are potential
new markets, Canada is the most attractive. Canada has a strong consumer base and thriving
economy. Expanding into Canada will be the best movie for Shake Shack in their continued
international expansion. They have the highest expenditure on burger fast food/capita as well as
the highest population for ages 15-54 and have an 80.7% urban population, which are the
individuals that will be attracted the most by Shake Shack products.
4 Marketing Plan
4.1 Market Entry Mode
Shake Shack’s best option for market entry mode is to follow the same process they have utilized
when opening in foreign markets in the past. They should work with an exclusive international
partner who will license and operate the Shacks in Canada.
4.2 Product
Shakes Shack offers high quality products with the convenience of a fast food restaurant while
maintaining the ambiance of being an “anti-chain chain”. The mix of offering both high quality
products and service makes Shake Shack’s products very desirable. With Canada having the
second highest per capita expenditure on burger fast food, behind only the United States, it can
be assumed that the Canadian market will readily accept Shake Shacks current products.
However, Shake Shack, as they have done with every previous location, should add a location
specific concrete to the menu of their future Canadian location to connect to the Canadian culture
and community while staying true to their roots.
4.3 Price
Figure 4 illustrates how Shake Shack compares to its main competitor in regards to price and
quality. With McDonalds being the market share leader, they have the lowest priced product with
the lowest quality. Shake Shack sells their product for a higher price; however, has significantly
better quality. When looking at McDonald’s prices in Canada, specifically Big Mac prices,
compared to their prices in the United States, their Canadian prices are 9.38% higher. Therefore,
when Shake Shack prices their products in Canada, they should take their competitors price
14. 12
increase into consideration. Table 2 in the Appendix shows a breakdown of’ McDonald’s prices
and the projected prices for Shake Shack in Canada based off McDonald’s price change.
Figure 4 Price vs. Quality
Source: McDonald’s Corporation, Yum! Brands, Inc., Shake Shack
4.4 Promotion
Shake Shack historically has had a noticeable lack of advertisements and instead relies heavily
on their own social media accounts such as Facebook, Twitter, and Instagram. However, this
allows them to maintain the brand image of an “anti-chain chain”. Through their social media
sites, Shake Shack should continue to promote the fact that they use only “good ingredients” as
well as their commitment to the environment, their employees, and their communities. They
should host local events such as Ping-Pong and dodge ball tournaments as well as implementing
their free community fitness program, Shack Track & Field, at the Canadian location.
4.5 Placement
In order to reach their target market of a young, urban population, Shake Shack should open their
Canadian location in one of Canada’s three most populated cities. These cities are Toronto,
Montreal, and Vancouver. I would recommend that they enter either the Toronto or Vancouver
market as Montreal has heavy French influences and would require significant more research and
planning. I would also recommend that the new location be designed in the same vein as other
Shake Shack locations and make use of recycled materials to stick with their environmentally
friendly image.
4.6 Sales Forecast and Projected Income Statement
Due to the fact that Shake Shack is a private company, it is difficult to find financial statements
from past years in order to create a sales forecast and projected income statement. However, we
can make an educated guess that Shake Shack will gain market share and continue to increase
sales in Canada, similar to that of the other foreign countries it has entered and been successful.
McDonald's
Corporation
Yum! Brands,
Inc.
Shake Shack
Q
u
a
l
i
Q
u
a
l
i
Quality
Price
15. 13
Recommendations
The fast food markets in the three countries being evaluated all have qualities that make it
attractive for a company to expand into. However, eliminating Switzerland as an option would be
the first step due to the fact that its population considerably smaller than the other options. More
specifically, Canada’s market has turned out to be the most attractive among them all.
It is recommended that Shake Shack enter the Canadian market with their restaurant that can
target the middle consumer. They should enter the market by working with an exclusive
international partner who will license and operate the Shake Shack location in Canada in one of
its urban cities, where they could be exposed to many consumers who consistently choose
convenient, fast food options.
16. 14
References
Global Fast Food Restaurants – IBISWorld Industry Report August 2014. (2014). (). IBISWorld.
Retrieved from http:// http://clients1.ibisworld.com/reports/gl/industry/default.aspx?entid=1480
Fast Food Expenditure per Capita. (2006). Euromonitor. Retrieved from
http://www.portal.euromonitor.com/portal/analysis/tab
Shake Shack CEO: 'We Want to Be the Anti-Chain Chain'. (2012). Haden, J. Retrieved from
http://www.inc.com/welcome.html?destination=http://www.inc.com/jeff-haden/shake-shack-ceo-
the-anti-chain-burger-chain.html
Shake Shack Founder Expands his Empire. (2010). Kramer, K. Retrieved from
http://www.cnbc.com/id/39679233
5 Tips from Shake Shack. (2010). Van Tan, R. Retrieved from
http://www.qsrmagazine.com/reports/5-tips-shake-shack?page=2
17. 15
Appendix
Table 1 Data Range Exhibit
Data Range Exhibit
Ease Of Doing Business
40+ 1
30-40 2
20-30 3
10-20 4
0-10 5
Population (Mil.)
0-25 1
25-50 2
50-75 3
75-100 4
100+ 5
GDP/Capita
0-13 1
13-26 2
26-39 3
39-52 4
52+ 5
Expenditure on Burger Fast Food/capita
1-30 1
30-60 2
60-90 3
90-120 4
120+ 5
Unemployment Rate
0-1.5 5
1.5-3 4
3-4.5 3
4.5-6 2
6+ 1
Population Below Poverty Line
0-4 5
4-8 4
8-12 3
12-16 2
16+ 1
Population Ages 15-54 (Mil.)
52+ 5
18. 16
39-52 4
26-39 3
13-26 2
0-13 1
Urban Population
90+ 5
70-90 4
50-70 3
30-50 2
0-20 1
Table 2 Projected Price Breakdown
Price In: Shake Shack: Shack Burger McDonald’s: Big Mac
USD($) 4.99 4.80
CAD 22.50-361.51** 6.06
Euros-USD($) 5.46 5.25
**Project Prices in Canada
Source: Author
“On my honor, I have not given, nor received, nor witnessed any unauthorized assistance on this
work”.
