Wendy’s Operations Management, 10

Decisions, Productivity
UPDATED ONUPDATED ON FEBRUARY 7, 2017 BY LAWRENCE GREGORY

A Wendy’s
hamburger fast food restaurant in Tocoa, Honduras. Wendy’s strategic decisions
emphasize operations management for stability and productivity in all areas in its
current markets, mostly in North America. (Photo: Public Domain)
Wendy’s applies the 10 strategic decisions of operations management (OM) to address
needs in various business areas. These 10 strategic decisions are aimed at
streamlining Wendy’s activities. As the third biggest hamburger restaurant chain in the
world, Wendy’s must streamline its operations to effectively compete against aggressive
firms like McDonald’s and Burger King. Wendy’s operations management efforts are
indicative of the company’s prioritization of business stability rather than international
expansion. Nonetheless, the 10 strategic decisions of operations management are
applied in a way that supports Wendy’s potential expansion in more market areas.

Wendy’s operations management (OM) covers all of the 10 strategic decision areas for
its business. Wendy’s strategies are directed toward productivity and business stability,
and less at expansion in the global hamburger restaurant market.

Wendy’s Operations Management, 10 Decision Areas

1. Design of Goods and Services. Wendy’s emphasizes high output quality. This
decision area of operations management pertains to the design of the company’s
products and how it addresses business and market needs. In this regard, Wendy’s
strategy is based on product innovation to maintain product competitiveness.
2. Quality Management. In this strategic decision area, Wendy’s objective is to
maintain high quality standards to match outputs and consumer expectations. The
company ensures that its operations managers are prepared to apply these standards
at larger scales when expansion starts. Wendy’s mission and vision
statements emphasize high quality.

3. Process and Capacity Design. Wendy’s operations management strategy involves

production lines. Many of the ingredients are prepared in the company’s production line
facilities. Also, even at Wendy’s hamburger restaurants, this system is used to
maximize process efficiency and capacity utilization in all areas.

4. Location Strategy. Wendy’s strategy for this decision area of operations

management is typical in the fast food restaurant industry. For instance, the company
maintains strategically located Restaurant Support Centers as support hubs for its
franchisees. On the other hand, Wendy’s restaurant locations are based on proximity to
town and city centers.

5. Layout Design and Strategy. In this strategic decision area of operations

management, the goal is to ensure that layouts facilitate efficient movement of people,
materials and information. Wendy’s does so through standard layouts for its restaurants
and their kitchens. Total Quality Management is also used as basis for the layout design
and strategy of Wendy’s operations management in Restaurant Support Centers and
supply chain facilities.

6. Job Design and Human Resources. Wendy’s Restaurant Support Centers provide
HR training support for franchisees. In this way, the company satisfies its operations
management objective of standardization in this strategic decision area. Wendy’s
corporate control is applied through these centers, ensuring optimal human resource
performance.

7. Supply Chain Management. This decision area of operations management involves

the adequacy of the supply chain. In this regard, Wendy’s strategic objective is to
diversify its supply chain. Even though most of its operations are in North America,
Wendy’s operations management approach maintains suppliers outside North America
for a stable supply chain.

8. Inventory Management. Wendy’s uses a combination of centralized and

decentralized approaches for this strategic decision area of operations management.
The company applies centralized inventory management to minimize stockouts
throughout the inventory. On the other hand, decentralization ensures that Wendy’s
operations management is capable of responding to fluctuations in markets. For
example, Wendy’s restaurant managers are given considerable autonomy for managing
the inventory for day-to-day operations.
 9. Scheduling. This strategic decision area of operations management focuses on
implementing schedules that address customers’ needs. Wendy’s uses automation for
scheduling many of its activities in the supply chain. However, majority of operations in
Wendy’s hamburger restaurants involve manual and semi-automated scheduling.

10. Maintenance. Wendy’s operations management strategy for this decision area is to
use localized maintenance teams. Franchisees access local maintenance teams and
services from the Wendy’s Restaurant Support Centers. The company’s operations
management also includes in-house maintenance teams for some areas, such as
supply chain facilities.

Wendy’s Productivity Measures

Wendy’s productivity is measured through a wide variety of criteria. Variations among
franchisees’ operations management also lead to differences in the productivity
measures used. The following are some of the most notable productivity criteria
considered at Wendy’s:

1. Stockout rate (inventory management productivity)

2. Orders fulfilled per hour (Wendy’s restaurants’ productivity)
3. Rate of problems solved (Wendy’s Restaurant Support Centers’ productivity)

Wendy’s Stakeholders: A CSR Analysis

UPDATED ONUPDATED ON FEBRUARY 7, 2017 BY JESSICA LOMBARDO

A Wendy’s
hamburger fast food restaurant in Japan. Wendy’s corporate social responsibility
programs and initiatives address most stakeholders’ interests. (Photo: Public Domain)
Wendy’s international success involves addressing the interests of its stakeholders
through appropriate corporate social responsibility (CSR) programs. Stakeholder theory
suggests that companies influence and are under the influence of stakeholders, which
 are individuals or groups that have a stake in what the company does. Wendy’s
corporate social responsibility initiatives reflect the company’s strategy and concern for
these stakeholders. These programs also influence how Wendy’s maintains its
sustainability, its corporate and brand image, as well as the attractiveness of its
products. Suitable and relevant corporate social responsibility programs address
stakeholders’ interests and increase Wendy’s chances of long-term success as one of
the top hamburger fast food restaurant chains in the world.

Wendy’s corporate social responsibility (CSR) initiatives include programs that target
the interests of customers, employees, and other major stakeholders. These
stakeholder groups are prioritized according to Wendy’s strategy and business
philosophy.

Wendy’s Stakeholder Groups & CSR Initiatives

Wendy’s stakeholders’ interests are the bases for the company’s corporate social
responsibility initiatives, which embody the company’s core values, such as “Do the
Right Thing.” However, not all stakeholders have the same significance in the business.
Wendy’s prioritizes its stakeholders and their interests as follows, arranged according to
the company’s corporate social responsibility strategy:

1. Customers (Wendy’s top priority)

2. Employees
3. Communities
4. Investors
5. Governments

Customers. Wendy’s gives its customers top priority as stakeholders in its corporate
social responsibility programs. The company believes that customer satisfaction is a
primary goal of the business. This stakeholder group is interested in high quality and
appropriate pricing of Wendy’s products. Also, customers are significant because they
are the source of the company’s revenues. Wendy’s corporate social responsibility
strategy satisfies the interests of these stakeholders by focusing on quality, which is one
of the selling points of the business. For example, one of Wendy’s core values is
“Quality is Our Recipe.” Thus, Wendy’s corporate social responsibility strategy ensures
the company’s focus on customers’ interests through quality.

Employees. Employees are the second-priority stakeholders in Wendy’s corporate

social responsibility strategy. This stakeholder group’s interests are career opportunities
and proper compensation. Employees are important because they directly affect
Wendy’s business capabilities. The company believes “People are our greatest asset
and the foundation of our success.” Wendy’s CSR programs focus on providing
adequate training to develop employees’ potential. Also, these stakeholders are given
appropriate compensation, with increasing opportunities for higher compensation across
the corporate ladder. These factors show that Wendy’s corporate social responsibility
strategy adequately addresses the interests of this stakeholder group.

Communities. Wendy’s corporate social responsibility efforts highlight one of the

company’s core values: “Give Something Back.” In this regard, communities are one of
the major stakeholders in Wendy’s CSR approach. This stakeholder group is significant
because they affect customers’ and investors’ perception and behavior toward the
company. Communities are interested in Wendy’s contributions to their development.
The company addresses these interests through financial support for a number of
organizations, such as the Dave Thomas Foundation for Adoption, which maintains
the Wendy’s Wonderful Kids program. Wendy’s main corporate social responsibility
thrust in addressing this stakeholder group’s interests is support for family unity and
social development.

Investors. Investors are significant stakeholders that influence the availability of

Wendy’s capital. This stakeholder group is interested primarily in business profitability.
Wendy’s CSR programs address these interests by focusing on stability instead of
expansion. For example, the company has limited international operations, but its
operations in North America are stable and highly profitable. These conditions show that
Wendy’s corporate social responsibility approach is cautious in ensuring business
stability, with limited global expansion.

Governments. Governments are stakeholders that significantly affect Wendy’s through

regulatory requirements. This stakeholder group is interested in regulatory compliance
as well as business contributions to economic development. Wendy’s corporate social
responsibility initiatives address these interests through its legal department as well as
its Restaurant Support Centers that ensure regulatory compliance of all franchisees.
Wendy’s corporate social responsibility programs directly address the interests of this
basic stakeholder group.

Wendy’s CSR Performance in Addressing

Stakeholders’ Interests
Wendy’s corporate social responsibility programs are focused but limited. The company
addresses most of the interests of stakeholders. However, other significant interests are
not properly satisfied. Thus, the recommendation is for Wendy’s to increase its
considerations for employees’ expectations of higher wages. It is also recommended
that the company should implement more CSR programs to address other community
concerns, such as livelihood. These recommendations are aimed at enhancing Wendy’s
corporate social responsibility standing and performance based on stakeholders’
interests, and at improving the company’s brand image.

Wendy’s Marketing Mix (4Ps) Analysis

 UPDATED ONUPDATED ON FEBRUARY 7, 2017 BY NATHANIEL SMITHSON

Sign of a Wendy’s
hamburger fast food restaurant at night. Wendy’s marketing mix is typical in the fast
food industry, although the company’s products are competitive. (Photo: Public Domain)
Wendy’s is one of the leading international hamburger fast food restaurant chains in the
world. The company’s marketing mix (4Ps) supports such industry position. The
marketing mix defines the strategies and tactics the company uses to implement its
marketing plan, and indicates how the business relates with the target market. Wendy’s
marketing mix is the company’s approach to the dynamics of the fast food market. This
approach changes according to trends in the global market. The marketing mix shows
how Wendy’s addresses issues and needs in the market.

Wendy’s marketing mix (4Ps) shows that the company relies on traditional approaches
to reach target customers in various markets worldwide.

Wendy’s Products (Product Mix)

Wendy’s is known for hamburgers. However, the company offers many other products.
In this component of the marketing mix, organizational outputs are considered. The
following are the product lines in Wendy’s product mix:

1. Burgers
2. Chicken
3. Sides
4. Salads
5. Beverages
6. Desserts
 While hamburgers are the main product line, Wendy’s offers other product lines to
complete the customer experience. For example, with hamburgers, sides, salads,
beverages and desserts, customers can enjoy a full meal. This component of the
marketing mix involves standardization of products, which supports economies of scale
and Wendy’s generic strategy.

Place/Distribution in Wendy’s Marketing Mix

Wendy’s completes most of its transactions in its restaurants. This component of the
marketing mix identifies the places or venues through which the firm transacts with its
customers. In Wendy’s case, the following are the places for distributing products:

1. Restaurants
2. Kiosks
3. Website
4. Mobile app

Wendy’s generates most of its revenues at its restaurants. However, the company also
occasionally uses kiosks, such as those located in malls and venues of special events.
Customers can also place their orders through Wendy’s website. In addition, the
company allows consumers to access the menu and special deals through the Wendy’s
mobile app. This component of the marketing mix shows that Wendy’s relies on opening
more restaurants to maximize its growth.

Wendy’s Promotion (Promotional Mix)

Wendy’s promotes its products through a variety of strategies and tactics. This
component of the marketing mix presents the communication strategies and tactics the
company uses to reach its target consumers. Wendy’s applies the following promotion
tactics, arranged according to significance:

1. Advertising (Wendy’s main tactic)

2. Personal selling
3. Sales promotion
4. Public relations

Advertising is the primary tactic Wendy’s uses to promote its products. For example, the
company advertises its products through print media, television, and online media.
Wendy’s also uses personal selling to communicate with customers. For example,
restaurant personnel usually encourage customers to order more products, such as
desserts or sides. Wendy’s applies sales promotion in the form of short-term special
offers and discounts. For instance, the company occasionally distributes discount
coupons to customers. Moreover, Wendy’s implements public relations as a way of
promoting its business and products, such as when the company sponsors special
 community events to make the brand more popular. Thus, Wendy’s addresses this
component of the marketing mix mostly through advertising and personal selling, which
are significant determinants of the company’s revenues.

Wendy’s Prices and Pricing Strategy

Wendy’s pricing strategy is similar to those of firms like McDonald’s and Burger King.
This component of the marketing mix identifies the company’s strategies for setting its
prices. Wendy’s applies the following pricing strategies:

1. Market-oriented pricing strategy

2. Product bundle pricing strategy

Wendy’s main pricing strategy is market-oriented. This pricing strategy reflects the
conditions of the market and the competitive landscape. For example, changes in
demand and supply are used to adjust the prices of Wendy’s products. On the other
hand, the product bundle pricing strategy involves offering product groups (e.g. combo
meals) for a discount. These pricing strategies are supported through Wendy’s generic
strategy.

Wendy’s PESTEL/PESTLE Analysis &

Recommendations
UPDATED ONUPDATED ON FEBRUARY 6, 2017 BY JUSTIN YOUNG

A Wendy’s
restaurant in Brantford, Canada. Wendy’s PESTEL/PESTLE analysis indicates major
 changes for the company to address the external factors in its remote or macro-
environment. (Photo: Public Domain)
Wendy’s success as one of the biggest hamburger fast food restaurant chains in the
world is based on its ability to address the concerns shown in this PESTEL/PESTLE
analysis. The PESTEL/PESTLE analysis identifies the most notable external factors in
Wendy’s remote or macro-environment. These factors threaten or create opportunities
for the company. Wendy’s must include them in strategy formulation to ensure long-
term competence. Managers and investors can use the results of the PESTEL/PESTLE
analysis to determine Wendy’s potential and capabilities based on the conditions of the
remote or macro-environment.

Wendy’s effectively addresses most of the external factors indicated in this

PESTEL/PESTLE analysis. However, the business must improve its aggressiveness for
innovation and expansion to counteract the threats in its remote or macro-environment.

Political Factors Affecting Wendy’s Business

Wendy’s macro-environment is under the influence of the political landscape. This
aspect of the PESTEL/PESTLE analysis considers the political conditions that effect the
company’s remote environment. The following are the major political external factors
significant in Wendy’s business:

1. Increasing economic integration and alliances (opportunity)

2. Stable political conditions in major markets (opportunity)
3. Increasing government intervention on GMOs in the EU (threat)

Wendy’s has the opportunity to internationally expand based on the economic benefits
of increasing integration and alliances among countries. In addition, the stable political
conditions in major markets present minimal barriers and challenges for Wendy’s to
grow its business. However, the company must address the EU’s strong position
against GMO ingredients, which are usually found in fast food. In this aspect of the
PESTEL/PESTLE analysis, Wendy’s should consider expanding, while improving its
products to counteract the effects of government intervention on GMOs.

Economic Factors Important to Wendy’s

The economic situation determines Wendy’s business performance. The influence of
economic trends on the remote or macro-environment is evaluated in this aspect of the
PESTEL/PESTLE analysis. The following economic external factors are significant to
Wendy’s:

1. Increasing disposable income in developing countries (opportunity)

2. Stability of most major economies (opportunity)
3. Slowdown of Chinese economy (threat)
 The external factor of increasing disposable income presents opportunities for Wendy’s
to expand in developing countries. Also, the company can expect stable performance in
major markets. However, China’s declining economic growth rate could reduce Wendy’s
potential global growth, despite the company’s plans to expand in the Chinese market.
Based on this aspect of the PESTEL/PESTLE analysis, the economic external factors
emphasize Wendy’s opportunities for global growth and expansion.

Social/Sociocultural Factors Influencing Wendy’s

Business Environment
Wendy’s business is subject to the impact of sociocultural conditions on the remote or
macro-environment. The effects of social or sociocultural trends are considered in this
aspect of the PESTEL/PESTLE analysis. The following sociocultural external factors are
significant to Wendy’s strategic performance:

1. Increasing emphasis on quality (opportunity)

2. Increasingly busy lifestyles (opportunity)
3. Higher health consciousness (threat & opportunity)

The increasing emphasis on quality is an external factor that creates opportunities for
Wendy’s to improve product quality to attract and retain customers. Also, the busy
lifestyles of people in town centers and city centers increase demand for convenient fast
food. This condition presents the opportunity for Wendy’s to grow in such areas.
However, higher health consciousness could dampen demand. Nonetheless, the
company can address such threat by further improving product quality. This aspect of
the PESTEL/PESTLE analysis shows that Wendy’s can improve its business
performance based on the effects of sociocultural external factors.

Technological Factors in Wendy’s Business

Technologies define many processes in Wendy’s business. This aspect of the
PESTEL/PESTLE analysis tackles the influence of technologies and technological
trends on the company’s remote or macro-environment. Wendy’s must consider the
following technological external factors:

1. Increasing business automation (opportunity)

2. Moderate degree of R&D investments in the industry (opportunity)
3. High use of mobile technology (opportunity)

Based on increasing business automation, Wendy’s has the opportunity to implement

optimal automation of its processes to support economies of scale. Also, the company
can increase its competitiveness by surpassing other companies’ research and
development (R&D) investment levels. Wendy’s has the opportunity to improve its
online/mobile presence to reach more customers through their mobile devices. In this
 aspect of the PESTEL/PESTLE analysis, the technological external factors present
significant opportunities for Wendy’s to improve business competence.

Ecological/Environmental Factors
Wendy’s partly depends on the natural environment. This aspect of the
PESTEL/PESTLE analysis identifies the ecological/environmental conditions and issues
relevant in the company’s remote or macro-environment. The following ecological
external factors are the most notable in Wendy’s case:

1. Increasing emphasis on business sustainability (opportunity)

2. Low-carbon lifestyle trend (threat & opportunity)
3. Climate change (threat)

Wendy’s can enhance its brand image by improving its sustainability standing. In
relation, the company has the opportunity to reduce carbon emissions through
efficiency, so as to attract consumers who are conscious about their carbon footprint.
However, Wendy’s faces the threat of climate change, which could disrupt the
company’s supply chain. This aspect of the PESTEL/PESTLE analysis indicates that
the ecological external factors present threats and opportunities that affect Wendy’s
long-term viability.

Legal Factors
Legal systems affect Wendy’s performance and its remote or macro-environment. Legal
issues and regulatory requirements are considered in this aspect of the
PESTEL/PESTLE analysis. The following legal external factors are significant in
Wendy’s business:

1. Increasing food safety regulations (threat & opportunity)

2. Regulation of GMO ingredients (threat)
3. Increasing legal support for unions in developing countries (threat)

Increasing food safety regulations are a threat if Wendy’s does not respond accordingly.
However, this external factor also presents the opportunity for the company to improve
its product quality, such as through innovation. In relation, Wendy’s must respond to the
threat of new and tighter regulations on GMO ingredients, especially in the European
Union. On the other hand, the increasing support for unions in developing countries
threatens Wendy’s leverage for rapid growth in these markets. In the legal aspect of the
PESTEL/PESTLE analysis, the external factors threaten Wendy’s business.

Wendy’s PESTEL/PESTLE Analysis –

Recommendations
The external factors in Wendy’s remote or macro-environment present a variety of
threats and opportunities. However, the company must prioritize the most significant
and urgent issues. The primary recommendation is for Wendy’s to focus on product
improvement to address issues related to GMO regulation, consumers’ health
consciousness, and product safety. Also, Wendy’s must implement a more aggressive
global expansion strategy to benefit from the rapid economic growth of developing
countries. In addition, international supply chain diversification can improve Wendy’s
resilience despite the threat of climate change.

Wendy’s Five Forces Analysis (Porter’s

Model)
UPDATED ONUPDATED ON FEBRUARY 6, 2017 BY LAWRENCE GREGORY

A Wendy’s
hamburger fast food restaurant in Japan. Wendy’s Five Forces Analysis (Porter’s
model) shows that competition, customers, and substitutes are the top concerns based
on external factors in the industry environment. (Photo: Public Domain)
Wendy’s is the third biggest hamburger fast food restaurant chain in the world. This
position indicates the company’s effectiveness in addressing the issues identified in this
Five Forces analysis. Michael Porter developed the Five Forces analysis model to
understand the influences of external factors in the industry environment. Thus,
Wendy’s Five Forces analysis points to the main strategic issues for the company. The
Five Forces analysis also reflects the industry environment conditions that affect other
firms competing against Wendy’s. This Five Forces analysis is useful for managers and
investors to evaluate Wendy’s performance and potential, as well as the situation of the
global fast food restaurant market.
 Wendy’s Five Forces Analysis (Michael Porter’s model) presents the external factors
most relevant to the company and its industry. Wendy’s long-term success partly
depends on its effectiveness in addressing issues shown in this Five Forces analysis.

Overview: Wendy’s Five Forces Analysis

The intensities of the five forces affecting Wendy’s business depend on the dynamics of
the hamburger fast food restaurant market. Nonetheless, the following are the
intensities of these five forces based on Wendy’s current performance and the current
conditions of the global market:

1. Competitive rivalry or competition (strong force)

2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (weak force)
4. Threat of substitutes or substitution (strong force)
5. Threat of new entrants or new entry (moderate force)

Recommendations. The Five Forces analysis highlights competition, the bargaining

power of buyers, and the threat of substitutes as the most important issues facing
Wendy’s. The company must prioritize these forces to ensure competence in the
business. Nonetheless, Wendy’s must also consider other issues, which include the
threat of new entrants and bargaining power of suppliers. To optimize strategic success,
Wendy’s must develop its products to counteract the negative effects of competitors and
substitutes. Such product-focused approach can also attract and retain more
customers.

Competitive Rivalry or Competition with Wendy’s

(Strong Force)
Competitors strongly affect Wendy’s industry environment. This part of the Five Forces
Analysis focuses on the impact of companies on each other. In Wendy’s case, the
following are the external factors that create the strong force of competitive rivalry:

 High market saturation (strong force)

 High aggressiveness of firms (strong force)
 Low switching costs (strong force)

The fast food restaurant market is saturated with many firms with diverse strategies.
This external factor imposes a strong competitive force against Wendy’s. Also, the
company faces aggressive firms, such as McDonald’s and Burger King. Moreover,
Wendy’s consumers can readily move to other companies or restaurants because many
prices and quality levels are comparable (low switching costs). In this part of the Five
Forces analysis, Wendy’s must prioritize competition as one of the most significant
forces in its industry environment.
 Bargaining Power of Wendy’s Customers/Buyers
(Strong Force)
Consumers are major influences in the hamburger fast food restaurant industry
environment where Wendy’s operates. This part of the Five Forces Analysis determines
how customers influence business performance. The following are the external factors
that maintain the strong bargaining power of customers on Wendy’s:

 Low switching costs (strong force)

 High substitute availability (strong force)
 Moderate quality of information (moderate force)

The low switching costs enable customers to easily move from Wendy’s to other
companies. There are also many substitutes in the market. This external factor
empowers Wendy’s customers to consume substitutes instead. Furthermore,
consumers have access to information to help them decide when buying from Wendy’s.
Based on this part of the Five Forces Analysis, the effects of the bargaining power of
customers on the industry environment is also one of Wendy’s priority concerns.

Bargaining Power of Wendy’s Suppliers (Weak Force)

Suppliers determine the availability of materials Wendy’s needs in its business. In this
part of the Five Forces Analysis, the effects of suppliers are considered in terms of how
they impact Wendy’s and the industry environment. The following external factors reflect
the weak bargaining power of Wendy’s suppliers:

 Low forward integration (weak force)

 High overall supply (weak force)
 Moderate size of suppliers (moderate force)

Suppliers have weak influence on Wendy’s, partly because they have minimal forward
integration. The external factor of forward integration is the degree of control that
suppliers have in the distribution and sale of their products to firms like Wendy’s. Also,
suppliers are weak in the industry environment because of the abundance of supply in
the market. Despite the moderate size of some suppliers, they are not big enough in
imposing their demands on Wendy’s. As shown in this part of the Five Forces analysis,
suppliers are a minor concern in Wendy’s strategic decision-making process.

Threat of Substitutes or Substitution (Strong Force)

Wendy’s faces the threat of substitutes in the market. The impacts of substitutes on
firms and the industry environment are analyzed in this part of the Five Forces Analysis.
 In Wendy’s case, the following are the external factors that create the strong threat of
substitution:

 Low switching costs (strong force)

 High differentiation of substitutes (strong force)
 High affordability of substitutes (strong force)

Consumers can easily move away from Wendy’s toward substitutes because it is easy
to do so, based on the low switching costs. For example, fine dining restaurants and
groceries are easily accessible. High differentiation is an external factor that makes
substitutes attractive for many consumers. Moreover, Wendy’s customers could choose
substitutes based on low prices. This part of the Five Forces Analysis shows that the
threat of substitution is one of the top issues in Wendy’s industry environment.

Threat of New Entrants or New Entry (Moderate Force)

New entrants can change Wendy’s business performance and the conditions of the
industry environment. The impact of new companies is considered in this part of the
Five Forces Analysis. The external factors that create the moderate threat of new entry
against Wendy’s are as follows:

 Moderate cost of doing business (moderate force)

 Moderate ease of brand differentiation (moderate force)
 High cost of brand development (weak force)

The moderate cost of doing business is an external factor that limits the entry of some
companies. Also, the moderate ease of brand differentiation enables some firms to
readily compete against Wendy’s. However, the high cost of brand development
prevents many new companies from succeeding in competing against firms like
Wendy’s. In this part of the Five Forces Analysis, the threat of new entrants is a
considerable issue facing Wendy’s.

Wendy’s SWOT Analysis &

Recommendations
UPDATED ONUPDATED ON FEBRUARY 6, 2017 BY JESSICA LOMBARDO
 A Wendy’s
restaurant in New York City. Wendy’s SWOT analysis shows that the company is strong
and competitive, but must diversify and globally expand. (Photo: Public Domain)
Wendy’s potential for international growth can be evaluated through a SWOT analysis.
The SWOT analysis is a means of understanding the influences of internal and external
strategic factors on the company. In the case of Wendy’s SWOT analysis, the
considerations have a global span since the company has international operations. As
one of the major competitors in the global fast food restaurant market, Wendy’s SWOT
analysis also sheds light on the conditions of the industry, especially the competitive
landscape and how other firms fare. At present, the company effectively addresses the
main issues facing the business. However, as shown in this SWOT analysis, Wendy’s
can improve through more aggressive international expansion.

Wendy’s SWOT analysis reflects the company’s ability to continue its stable growth in
major markets. Global expansion can boost the company’s performance.

Wendy’s Strengths (Internal Strategic Factors)

Wendy’s strengths are based on the company’s continuing progress in the fast food
restaurant industry. This part of the SWOT analysis considers the internal strategic
factors that make the company competent in its business. Wendy’s most notable
strengths are as follows:

1. High quality products

2. Extensive experience in the business
3. Strong brand image

The company is known for high quality products. Quality is emphasized in Wendy’s
mission and vision statements. For example, the square-shaped hamburger patties are
marketed as freshly prepared beef. In addition, Wendy’s has developed into an effective
business because of its experience since it was founded in 1969. Also, as one of the top
players in the global fast food restaurant market, the company has one of the strongest
 competing brands. In this part of the SWOT analysis, Wendy’s has the strengths
needed to maintain competitiveness.

Wendy’s Weaknesses (Internal Strategic Factors)

Wendy’s weaknesses are linked to its current condition relative to other large fast food
firms. The internal strategic factors that limit business development are considered in
this part of the SWOT analysis. The following are Wendy’s main weaknesses:

1. Limited global reach

2. Low diversification
3. Imitable products

Most of Wendy’s revenues are generated in North America. The company’s financial
reports indicate that its revenues from other regions are “immaterial.” This condition is a
weakness because it prevents Wendy’s from maximizing its performance in the global
market. Also, the company has limited diversification, which is reflected in the lack of
major product or business innovation. Another weakness is that many of Wendy’s
products are imitable. Smaller firms, especially in developing countries, can copy
Wendy’s products. Based on this part of the SWOT analysis, Wendy’s weaknesses limit
business growth at the international level.

Opportunities for Wendy’s (External Strategic Factors)

Wendy’s has opportunities to significantly increase its business performance. This part
of the SWOT analysis focuses on the external strategic factors, such as industry
conditions, that lead to business improvement. The most notable opportunities for
Wendy’s are as follows:

1. Global expansion
2. Business diversification
3. More aggressive product innovation

Wendy’s has the opportunity to expand internationally. Global expansion can increase
the company’s market reach and boost its finances. Wendy’s also has the opportunity to
diversify its business. For example, the company can acquire complementary
businesses in the food service industry, or develop an entirely new line of products. In
relation, Wendy’s can innovate more aggressively to increase its competitiveness
against firms like McDonald’s and Burger King. This part of the SWOT analysis
indicates that Wendy’s has significant opportunities for global growth.

Threats Facing Wendy’s (External Strategic Factors)

 Wendy’s must counteract threats to its business. The external strategic factors that
reduce business performance are identified in this part of the SWOT analysis. The
following are the main threats against Wendy’s:

1. Aggressive competition
2. Imitation
3. Healthy lifestyles trend

Aggressive competitors threaten Wendy’s business. For example, McDonald’s is

aggressive in marketing and global expansion. Also, imitation is a threat that could
reduce the competence and attractiveness of Wendy’s products. Moreover, an
increasing level of health-consciousness could reduce or dampen demand for products
from firms like Wendy’s. As shown in this part of the SWOT analysis, Wendy’s must
improve its products and competitiveness to address major threats to its business.

Wendy’s SWOT Analysis – Recommendations

Wendy’s is among the top companies in the global fast food restaurant market. As
presented in this SWOT analysis, Wendy’s has the strengths to ensure continued
satisfactory performance. However, such performance is limited because the company
has not yet taken major action to increase its global presence. Thus, Wendy’s can
benefit from a more aggressive global expansion strategy. Also, the company must
diversify its business to reduce exposure to market risks, and increase investments for
product innovation to address changing consumer preferences. This SWOT analysis
highlights the need for reforms in Wendy’s strategies to maintain its competitiveness in
the long term.

Wendy’s Organizational Culture

Characteristics: An Analysis
UPDATED ONUPDATED ON FEBRUARY 6, 2017 BY PAULINE MEYER
 A Wendy’s
restaurant in Tocoa, Honduras. Wendy’s organizational culture supports quality and
ethics, but lacks emphasis on flexibility. (Photo: Public Domain)
Wendy’s organizational culture is a defining factor on how customers, employees and
investors view the business. A company’s organizational culture is the combination of
values, traditions, and expectations that affect employees’ behaviors. At Wendy’s,
human resources are developed to reinforce the company’s organizational culture. This
culture is based on Wendy’s business needs and aims for competitiveness. As one of
the biggest firms in the global fast food restaurant industry, Wendy’s uses its corporate
culture to optimize employee performance and customer satisfaction. This condition
supports Wendy’s business goals and strategic objectives.

Wendy’s develops its organizational culture to add to competitiveness. The resulting

employee behaviors contribute to customer satisfaction and Wendy’s high business
performance.

Features of Wendy’s Organizational Culture

Wendy’s organizational culture has been adjusted through the years to suit market
conditions. However, the company maintains the original principles of the business. The
following are the primary characteristics of Wendy’s organizational culture:

1. People-first attitude
2. Emphasis on Quality
3. Ethical action

People-First Attitude. People are a top priority in Wendy’s organizational culture. In

this regard, the company’s objective is to ensure that all stakeholders are properly
considered. Wendy’s believes that people are the foundation of its business. Wendy’s
integrates the needs of employees, customers and business partners in its policy
development processes. Employees are expected to ensure that people’s concerns are
considered. Thus, this organizational culture facilitates Wendy’s effectiveness in
developing its human resources and corporate social responsibility programs.

Emphasis on Quality. Wendy’s mission statement and vision statement highlight the
importance of quality. This factor is also integrated in the company’s organizational
culture. Wendy’s believes that quality is the main selling point of its products. Based on
this organizational culture, Wendy’s continues to innovate with high quality to attract
consumers to its restaurants around the world. Employees are expected to adhere to
high quality standards. In this way, Wendy’s organizational culture supports
competitiveness focused on product/service quality.

Ethical Action. Wendy’s includes ethical action in its organizational culture. This factor
is viewed as a determinant of the company’s ability to address needs, rules and
expectations. Wendy’s has three main thrusts in this component of its organizational
culture: (1) honesty, (2) integrity, and (3) respect for one another. These virtues
influence employees’ decisions. Wendy’s believes that the business and employees are
more likely to achieve high performance by applying these principles. Thus, Wendy’s
organizational culture also supports ethical conduct and helps prevent illegal activity.

Wendy’s Organizational Culture Advantages &

Disadvantages
An advantage of Wendy’s organizational culture is its emphasis on quality, which leads
to better outcomes, such as high quality products. Another advantage is that this
organizational culture addresses the company’s corporate social responsibilities.
However, a major disadvantage is that it does not integrate flexibility. Also, Wendy’s
organizational culture does not directly include leadership. Nonetheless, the emphasis
on quality indirectly implies consideration for excellence and leadership in Wendy’s
organizational output.

Wendy’s Organizational Structure

Characteristics (Analysis)
UPDATED ONUPDATED ON SEPTEMBER 8, 2018 BY CHRISTINE ROWLAND
 A Wendy’s
restaurant in Japan. Wendy’s organizational structure supports corporate control and
focus on the North American market. (Photo: Public Domain)
Wendy’s organizational structure is relatively simple compared to those of other large
fast food restaurant companies. The organizational structure defines the arrangement of
the company’s components, and specifies the patterns of interaction among these
components. Wendy’s corporate structure has remained largely the same through the
years. Despite minor reforms, the company has focused on corporate control through its
structure. As the world’s third biggest hamburger fast food restaurant chain, Wendy’s
carefully implements global expansion strategies. These strategies are effectively
applied and supported through Wendy’s organizational structure.

Wendy’s employs its organizational structure to maximize operational effectiveness.

However, some changes may be necessary to maintain the structure’s support for
Wendy’s global expansion.

Features of Wendy’s Organizational Structure

Wendy’s has a functional organizational structure. This organizational structure uses
business functions as bases for grouping resources and activities. Instead of having
geographic divisions, the company uses a centralized management structure. The
following are the prominent characteristics of Wendy’s organizational structure:

1. Corporate function-based groups

2. Global hierarchy
3. Local teams

Corporate Function-Based Groups. Wendy’s has centralized function-based groups

for the entire global organization. For example, the company has a legal department, an
accounting department, and a marketing department. This feature of Wendy’s
organizational structure provides the basic mechanism to address business functions.
The activities of each of these groups affect the company’s operations worldwide. All of
Wendy’s corporate directives and policies originate from these groups.

Global Hierarchy. This characteristic of Wendy’s organizational structure involves

vertical lines of authority, command, and communication. For example, concerns are
escalated from franchisees and regional offices to the corporate headquarters. In this
way, Wendy’s organizational structure supports global control of business operations.
This feature also shows the traditional nature of the company’s structure.

Local Teams. Teams are part of Wendy’s, especially at the level of local operations,
which are at the bottom of the organizational structure. For example, Wendy’s
restaurants use teams for daily operations. These teams are flexible units that support
fluctuations in the company’s daily operations. The development and activities of these
teams are based on Wendy’s corporate standards.

Wendy’s Organizational Structure Advantages &

Disadvantages
The main advantage of Wendy’s organizational structure is its support for control of
global operations. The centralized function-based groups enable effective
implementation of policies and strategies throughout the global organization. Also, this
organizational structure supports Wendy’s current focus on the North American market.
However, lack of flexibility to support international growth is a disadvantage of such
organizational structure. Wendy’s centralized management structure does not easily
enable changes at the local or regional levels. This condition is partly due to Wendy’s
current focus on growing its business in North America.

Wendy’s Generic Strategy & Intensive

Growth Strategies
UPDATED ONUPDATED ON FEBRUARY 6, 2017 BY ANDREW THOMPSON
 A Wendy’s sign at
night. Wendy’s generic strategy (based on Porter’s model) and intensive growth
strategies lead to strategic objectives for global competitive advantage. (Photo: Public
Domain)
Wendy’s generic competitive strategy (based on Michael Porter’s model) is similar to
those of other fast food companies like McDonald’s and Burger King. However,
Wendy’s differentiates its business and products from competitors through product
innovation that addresses market and consumer trends. In addition, Wendy’s generic
strategy builds competitive advantage for the company to implement its intensive growth
strategies. While these intensive strategies support growth, high quality remains at the
core of the business, based Wendy’s mission statement and vision statement. The
interactions among these strategies and their strategic objectives influence Wendy’s
ability to grow internationally, especially while facing competition involving other large
firms like McDonald’s and Burger King.

Wendy’s generic competitive strategy (based on Porter’s model) supports global

competitiveness. The corresponding intensive strategies and strategic objectives enable
Wendy’s international growth and expansion.

Wendy’s Generic Strategy (Porter’s Model)

Wendy’s generic strategy for competitive advantage is based on the general approach
of firms in the global fast food restaurant industry. This approach emphasizes cost
minimization. However, Wendy’s uses the following combination of generic competitive
strategies:

1. Cost leadership
2. Differentiation
Cost leadership is Wendy’s main generic competitive strategy. According to Porter’s
model, cost minimization and price minimization are the main concerns in this generic
strategy. For example, in 1988, Wendy’s was the first fast food restaurant chain to use a
single price-point for its menu at 99¢ for every item. The company continues to minimize
its prices to effectively compete against the low prices of other firms in the market.

Differentiation is Wendy’s secondary generic strategy for competitive advantage.

Product uniqueness is among the main emphases in this generic strategy. For example,
Wendy’s promotes its square-shaped fresh ground beef patties that are significantly
bigger than those of McDonald’s and other fast food hamburger chains. Wendy’s array
of salad menu items also sets the company apart from competitors in terms of health
concerns. Such endeavors manifest the differentiation generic strategy for Wendy’s
competitive advantage.

A strategic objective based on the cost leadership generic strategy is to standardize all
of Wendy’s business processes to minimize costs through economies of scale. The
resulting cost savings lead to competitive advantage. Also, based on Wendy’s generic
strategy of differentiation, a strategic objective is to implement continuous product
innovation. Innovation creates competitive advantage through superior quality products
that Wendy’s offers.

Wendy’s Intensive Strategies (Intensive Growth

Strategies)
Market Penetration. Wendy’s primary intensive growth strategy is market penetration.
In this intensive strategy, the company grows through more sales to more consumers in
the same markets where it currently operates. For example, Wendy’s uses marketing
and establishes more restaurants to attract more consumers. In applying this intensive
strategy, the generic strategy of cost leadership enables Wendy’s to use affordable
prices to attract more customers. Also, the quality focus in its mission and vision
statements enables Wendy’s to use quality as a selling point to more consumers. A
strategic objective linked to the market penetration intensive strategy is to grow
Wendy’s through low-cost expansion alongside economies of scale.

Market Development. Wendy’s applies market development as its secondary intensive

strategy for growth. Entry into new markets is the objective in this intensive strategy. For
example, the company grows by entering new countries through franchising, such as
new franchise agreements for new operations in India. However, this is just a secondary
intensive growth strategy because Wendy’s rate of entry to new countries is relatively
slow. The cost leadership generic strategy supports this intensive strategy by enabling
Wendy’s to use low costs and prices to expand and reach more customers. This
intensive strategy leads to the strategic objective of expanding Wendy’s supply chain to
support new market entry.
Product Development. Wendy’s rate of product development is relatively low. Thus,
product development is only a supporting intensive growth strategy for the company. In
this intensive strategy, Wendy’s grows through new products to attract even more
consumers. For example, in 1979, the company introduced the salad bar. Also, new
products and variants were introduced through the years. The differentiation generic
strategy supports this intensive growth strategy by emphasizing product innovation.
Thus, product innovation is one of Wendy’s strategic objectives for this intensive growth
strategy.

Wendy’s Vision Statement & Mission

Statement (An Analysis)
UPDATED ONUPDATED ON FEBRUARY 6, 2017 BY DANIEL KISSINGER

A Wendy’s
restaurant in Brantford, Canada. Wendy’s mission statement and vision statement are
aligned to guide the company’s strategic objectives. (Photo: Public Domain)
Wendy’s is the third largest player in the global hamburger restaurant chain market.
This level of success is attributed to the successful implementation of Wendy’s vision
statement and mission statement. The corporate vision statement guides the company’s
overall strategic direction and development. Wendy’s vision statement focuses on
quality. On the other hand, the corporate mission statement indicates the appropriate
actions needed to reach the company’s aims. Wendy’s mission statement focuses on
actions needed to achieve the company’s quality leadership aims. As a global business,
Wendy’s successfully grows while following its mission statement and vision statement.

Wendy’s mission statement indicates business activities necessary for the company to
grow. On the other hand, Wendy’s vision statement provides the direction for the firm’s
organizational development.
 Wendy’s Vision Statement
Wendy’s vision statement is “to be the quality leader in everything we do.” In this
vision statement, the company highlights the importance of quality in its business. The
following are the main points of Wendy’s vision statement:

1. Quality leadership
2. Holistic approach

Wendy’s vision statement clearly shows that the company aims for leadership in the
aspect of quality. The firm believes that high quality leads to best results, including high
financial performance. In addition, the vision statement requires that Wendy’s must
apply high quality standards in all areas of the business. Thus, Wendy’s expects
success when high quality is achieved throughout the organization, such as in terms of
products and operations. A strategic objective based on this vision statement is to
implement high quality standards. Total quality management implementation is another
strategic objective that supports the holistic approach included in Wendy’s vision
statement.

Wendy’s Mission Statement

Wendy’s mission statement is “to deliver superior quality products and services for
our customers and communities through leadership, innovation and
partnerships.” This mission statement shows the means that the company uses to
achieve high quality aims. Thus, the following are the key points of Wendy’s mission
statement:

1. Superior quality
2. Focus on customers and communities
3. Leadership
4. Innovation
5. Partnership

The “superior quality” point of Wendy’s mission statement directly relates with the
company’s vision statement. This connection shows the central importance of quality in
Wendy’s strategies. The mission statement also emphasizes the thrust of Wendy’s in
terms of corporate social responsibility. For example, the point
about customers and communities implies Wendy’s efforts in satisfying the interests of
these stakeholders. In addition, Wendy’s mission statement is specific in detailing its
primary strategies, namely, leadership, innovation, and partnership. As linked to its
vision statement, the company generally starts leadership through quality policies, and
expands such leadership onto other areas of the business. This mission statement
gives rise to the strategic objective of alliances with other groups or organizations to
optimize Wendy’s global reach to markets and communities.