Carl's Jr. Strategy: Competitive Edge & SWOT Case Study

Introduction - Analyzing Carl's Jr.'s Sustainability & Advantages

Strategy and management are the goals of the company that are set to make a competitive advantage and achieve the vision of the company. The present study is based on the case of a fast food chain of America known as Carl Jr. which was established in 1941. The report will outline the potential sources which provide a competitive advantage to the company. The study will also highlight the different dimensions of sustainability as the competitive advantage. At last, the SWOT analysis will be conducted to analyze the position of the company.

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Main Body

Answer to the question 1.

For a company to be successful it is very necessary that they work efficiently so that they can have a competitive advantage. In the company works efficiently then they have a competitive advantage which help the company in facing the competition effectively. The five potential sources of competitive advantage for the company according to the case study are:

Cost leadership

The Carl Jr. has one of the advantages when it comes to the pricing on the menu. The company from a very long period of time is known for fitting in the bill. In other words, Carl Jr. provided the price with a good amount of food as well (Haque, et. al, 2021). Their pricing strategy is mainly focused on their targeted customer in the market. That results in the company not just providing a value meal but at the same time with an affordable price. The pricing strategy of the company helps them to make a good position in the market against the competitor.

Innovation and technology

For a long period, the company has always focused on the needs and demands of the consumer. Moreover, as the targeted customers of the company are mainly Generation Y and Z they have come up with many new ideas as well regarding technology (Galanakis, et. al, 2021). Nevertheless, the new innovation and technology included self-serving kiosks. Further with the help of PQR which is kind or formula define as p mean how thing should be done why and finally completing the task. For example, the company have implemented the technologies in different stores effectively. Moreover technological advancement is very essential in the competitive market. Lastly, Carls also gave successfully implemented the technology and also receive many positive feedbacks as well. The company also noticed the changes in consumer behaviour after the installation of self-serving kiosks. The changes like customers preferring the automated machine service rather than the human service. Nevertheless, after such a good response the company is trying to launch more innovative and technology-based services to increase the experience of customers.

Differentiation

Carl Jr. has made many changes in the menu because of the target customer that are majority of Generation Y. The targeted customers are now very much health conscious mainly after the pandemic and the social media influence as well. Moreover, that is the reason Carl Jr. changed the menu and brought a new food item to achieve the expectations of the customer (Gandhi and Houde, 2019). The new food items are very new and innovative like sourdough toast, bacon, mushroom and Swiss cheese. At the same time, the company had launched pure turkey burgers and plant-based petty instead by replacing the meat-based petty. The new food items have helped the company to settle in new locations and attract new consumers as well.

Network effect

The Company is spread almost all over the world with many stores in different locations. Especially after the collaboration with Hardee’s even though at the time of the joint venture both organizations had used their own but added different food from each other menu. For example, Hardee’s menu included lunch and dinner but on the other side, Carl Jr. had breakfast and other snacks which helped both companies and made a lot of profit as well. Moreover, Carl Jr. spread across the world with the help of the Hardee’s. Nevertheless because of the wide range of the company they have diverse markets to work in.

Supply chain

As the network of the have a wide range the supply chain of the company is also efficient. The company have a good supply chain and logistic to provide the raw material all over the store in the world. Moreover, logistic and supply chain management is one of the competitive advantages for the company (Anca, 2019). Carl Jr. can balance the supply and demand ratio to retain existing customers of the company. That not only helps the company to retain but at the same time attract more new consumer by providing them best quality service.

Answer to the question 2.

Sustainability is defined as the meeting of need with respect to the present and at the same time not compromising for the future generation. In the current competitive market it is very necessary for the company to effectively focus on sustainability for getting successful. The four dimensions of the sustainability of competitive advantages are:

Effective Supply Chain Management

A company needs some competitive advantage by which it can sustain itself in the market even in intense competition. As Carl Jr. is a company in the fast food industry they have to face intense competition from various big organizations. Further all those efforts of the organization gain competitive advantages in term of stakeholder as well. At the same time the CATWOE model help the organization to understand stakeholder perspective as well. Especially after the pandemic company is focused and manages the supply chain to make it effective as well. At the same, the company have Arrow Stream a cloud-based food service supply chain management that helps in purchasing, distribution and quality control as well. Now for Carl Jr. Arrow stream become very important for the company to manage the supply chain.

Product Differentiation and Innovation

Carl Jr. Restaurant has made many changes and innovations within products and services with time. The company focus and prioritises the customer needs and demand at the same time tries to cope with the trend as well. For example, the company's target customers are mainly the generation y and z. Moreover, after the pandemic and social media, people are focusing on health a lot. So the company have added much new food to the menu that is healthy. At the same time when it comes to innovation, Carl JR. is one of the companies that have taken the initiative toward adopting new technology. Nevertheless, the company have brought a self-serving machine that has good reviews from customers.

Organizational responsiveness

The ability to identify and adopt changes in market or industry trends is known as organizational responsiveness. So when it comes to Carl Jr. there are many changes the company is adopting mainly after 2015. Nevertheless, the company faced many backlashes because its ads were not appropriate for the time period. Moreover, the company has realised its mistakes and now has started a new campaign which is technological innovation (Muneeb et. Al, 2023). Carl Jr. has already taken many initiatives from serving good quality food to the adoption of new technology. The organizational response is much better than before and those initiatives are also helping the company to build competitive advantages to sustain in the market.

Cost Leadership

Cost Leadership is one of the factors that can help the company to sustain its competitive advantages in the market. As the cost leadership is also a competitive advantage of Carl Jr. the company can sustain itself in the market even in the intense competition (Kimiti, 2020). The company have almost the same price as other fast food chains but with the quantity it becomes a pocket-friendly option for the customer. Cael Jr. ensures that the consumer has good quality food at an affordable price. Moreover, the company can also make some strategic plans to lower the cost to ensure that cost leadership remain a competitive advantage for them.

Answer to the question 3.

The SWOT analysis of Carl’s Jr. Hotel is as follows

Strengths

1. Wide variety in the menu: The Company have a variety of food items on the menu that include meat as well as plant-based (McCrory, et. al 2019). Moreover, as the company has store all around the world they have to change according to the cuisine and environment of the country. To make a position in the selected country and attract new customers.
2. Collaboration: Carl Jr. has collaborated with many other companies to meet the needs and demands of the organization. For example, the company has collaborated with Hardee to operate in various countries as well. At the same time, the collaboration provides an opportunity for the company to bring versatility in many, markets and other sectors as well.
3. Brand value: The Company has been working for a very long period of time with good quality and price that have made a brand value in the market. Moreover, the company has also used various marketing strategy to build reputation and brand value. For example, the company had a unique kind of advertisement that helped to gain value from the customer as well.

Weaknesses

1. Large no. of competitors: The Company is a part of the fast food chain industry that has many competitors in the market. Nowadays the number of new fast chain is also increasing as well (Clapp, 2021). Nevertheless, the increasing entrepreneurship culture in the market is also the reason behind the intense competition.
2. Low presence in the market: The presence of Carl Jr. is not that strong in the industry compared to its competitors. For example, McDonald's, Pizza Hut, Domino's and other fast food chains have a strong presence in the market. So the company have to make a lot of effort in the market as well.
3. Similar products: As a fast food chain the menu of Carl Jr. and other similar brands are almost the same. At the same time in order to launch some new items on the menu, it needs a lot of effort like market research and customer surveys etc. Moreover, this is one of the weaknesses of the company.
4. Labour and operating cost: The Labour and operating cost is getting higher day by day which results in an increase in the cost of the company as well (Carl’s Jr SWOT Analysis, 2023). At the same time if the cost of the company increases then the price of the menu will eventually be affected as well.

Opportunities

1. Online order facility: Many fast food chains have a facility for online orders for customers. So the company also has the opportunity to adapt to the new change in the customer trend to provide them with a good experience. At the same time, it is one of the time periods when the industry has to change and adopt new things.
2. Attract the kinds with fun elements: The target customers of the fast food chain are mostly the age group of 18-34. So Carl Jr. has the opportunity to target the new age range of kids by changing the menu and adding some fun elements like free toys or sweets etc. This will help the company have diverse customers and opportunity to learn new things as well.
3. More advertising and Marketing: With the help of more advertising and marketing the company can make a good reputation in the industry as well (Lee, and Cho, 2020). At the same time, digital marketing also provides better opportunities and platforms. Moreover, the company's targeted customers also use most social media platforms which are why this is the best opportunity.

Threats

1. Unfavorable market conditions: people nowadays are focusing on health and safety a lot, especially after the pandemic (Barman, Das and De, 2021.). Moreover, fast food chains can be affected by this lot in a negative way. Nevertheless, it is a very well-known fact that fast food is unhealthy for the body the awareness results in unfavorable market conditions.
2. Regulatory changes: The rules and regulations by the government change from time to time. The companies have to follow the regulations of the national and international governments which change with time period.

Conclusion

The study has concluded various factors of Carl Jr. restaurant with the help of a case study. Moreover, some question regarding the restaurant has been mentioned the first question was to identify competitive advantages to the company. Some of them were cost leadership, network effect, technological innovation etc. Further, the study inferred that there are different types of dimension of sustainability which includes organizational responsiveness and effective supply chain management. In the end, it was evaluated that analysing the strengths and weaknesses of the company is necessary. The major strength highlighted was brand value and a wide variety of options on the menu along with a low presence in the market as a weakness.

References

Books and References

Anca, V., 2019. Logistics and supply chain management: an overview.Studies in Business and Economics,14(2), pp.209-215.

Barman, A., Das, R. and De, P.K., 2021. Impact of COVID-19 in food supply chain: Disruptions and recovery strategy.Current Research in Behavioral Sciences,2, p.100017.

Clapp, J., 2021. The problem with growing corporate concentration and power in the global food system.Nature Food,2(6), pp.404-408.

Galanakis, C.M., Rizou, M., Aldawoud, T.M., Ucak, I. and Rowan, N.J., 2021. Innovations and technology disruptions in the food sector within the COVID-19 pandemic and post-lockdown era.Trends in Food Science & Technology,110, pp.193-200.

Gandhi, A. and Houde, J.F., 2019. Measuring substitution patterns in differentiated-products industries.NBER Working paper, (w26375).

Haque, M.G., Munawaroh, M., Sunarsi, D. and Baharuddin, A., 2021. Competitive Advantage in Cost Leadership and Differentiation of SMEs “Bakoel Zee” Marketing Strategy in BSD.PINISI Discretion Review,4(2), pp.277-284.

Kimiti, P., 2020. Nexus between cost leadership strategy and performance: Fact or fallacy in milk processing firms in Kenya.International Business Research,13(10)

Lee, H. and Cho, C.H., 2020. Digital advertising: present and future prospects.International Journal of Advertising,39(3), pp.332-341.

McCrory, M.A., Harbaugh, A.G., Appeadu, S. and Roberts, S.B., 2019. Fast-food offerings in the United States in 1986, 1991, and 2016 show large increases in food variety, portion size, dietary energy, and selected micronutrients.Journal of the Academy of Nutrition and Dietetics,119(6), pp.923-933.

Muneeb, D., Khattak, A., Wahba, K., Abdalla, S. and Ahmad, S.Z., 2023. Dynamic capabilities as a strategic flexibility enabler: organizational responsiveness to COVID-19.Journal of Asia Business Studies,17(4), pp.824-849.

Online

Carl’s Jr SWOT Analysis. 2023. Online. Available through: < https://www.mbaskool.com/brandguide/food-and-beverages/10370-carls-jr.html>