Wendy’s potential for international growth can be evaluated through a SWOT analysis. The SWOT analysis is a tool for understanding the influences of internal and external strategic factors on the company. In this SWOT analysis of Wendy’s, the internal and external factors are based on the global market since the company has international operations. Given that the company is one of the major competitors in the global fast-food restaurant industry, this SWOT analysis also sheds light on the industry, especially the competitive landscape and how other firms perform. At present, the company effectively addresses the main issues facing its fast-food business. However, as shown in this SWOT analysis, Wendy’s can improve through international expansion and product innovation.
This SWOT analysis of Wendy’s reflects the company’s ability to continue its operations in major markets. Global growth and expansion can boost the food-service company’s performance. Wendy’s generic strategy, competitive advantage, and intensive growth strategies can facilitate successful growth and expansion in the international market. Expansion is especially notable, considering the company’s limited presence in many markets, relative to other large fast-food restaurant chains. For this purpose, Wendy’s marketing mix (4P) can help support business growth through marketing strategies and tactics.
Wendy’s Strengths (Internal Factors)
The business strengths relate to the company’s development or 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 strengths are as follows:
- High quality of products
- Extensive experience in the business
- Strong brand image
The company is known for high-quality products. This factor is emphasized in Wendy’s mission statement and vision statement. For example, the square-shaped hamburger patties are marketed as freshly prepared beef to entice consumers. In addition, the food service company has developed into an effective business because of its experience since it was founded in 1969. Wendy’s operations management is well-adapted to the market. Also, as one of the top players in the global fast-food market, the company has one of the strongest competing brands. This strong brand attracts diners to the company’s restaurants. In this part of the SWOT analysis, Wendy’s has the strengths needed to maintain competitiveness.
Wendy’s Weaknesses (Internal Factors)
Weaknesses are linked to the company’s current condition relative to other large fast-food restaurant chains. The internal strategic factors that limit business development are considered in this part of the SWOT analysis. The following are Wendy’s weaknesses:
- Limited global reach
- Low diversification
- Imitable products
Most of Wendy’s revenues are generated in North America. The company’s financial reports indicate that its sales revenues from other regions are immaterial. This condition is a weakness because it prevents Wendy’s from maximizing its potential revenues in the global market. Also, the company has limited diversification, which is reflected in the limited degree of product innovation, as well as the focus on food service operations. Another weakness is that many of the firm’s menu items are imitable. Smaller firms, especially in developing countries, can copy the company’s food and beverages. Based on this part of the SWOT analysis, Wendy’s weaknesses limit business growth at the international level.
Opportunities (External Factors)
The restaurant chain has opportunities to significantly increase its business performance. This part of the SWOT analysis focuses on the external strategic factors that can lead to the improvement of the fast-food business. Wendy’s opportunities are as follows:
- Global expansion and growth
- Business diversification
- 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. Moreover, the company can innovate more aggressively to increase its competitiveness against other restaurant businesses. This part of the SWOT analysis indicates that Wendy’s has significant opportunities for global growth.
Threats (External Factors)
The fast-food company must counteract the 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 to Wendy’s:
- Aggressive competition
- Imitation
- The trend of healthy lifestyles
Aggressive competitors threaten Wendy’s business. Aggressive marketing and expansion are observable among competitors, such as McDonald’s, Burger King, KFC, Subway, and Arby’s. Other food-service companies, such as Starbucks, Dunkin’, and Tim Hortons, also affect the competitive situation. The Five Forces analysis of Wendy’s illustrates the market saturation and strong competitive pressure involving these food-service businesses. Imitation is another threat that can reduce the competence and attractiveness of the company’s food and drinks. Moreover, an increasing level of health-consciousness can reduce or dampen demand for the company’s fast-food products. As shown in this part of the SWOT analysis, Wendy’s must improve its products and competitiveness to address major threats to its business.
Key Points & Recommendations – SWOT Analysis of Wendy’s
Wendy’s is among the top companies in the global fast-food restaurant industry. As presented in this SWOT analysis, the company has the strengths to ensure satisfactory business performance and attract consumers to its food and beverage products. However, this performance is limited, as the company needs to take major steps to increase its global market presence.
The restaurant chain can benefit from a more aggressive global expansion strategy. Wendy’s organizational structure or corporate structure may need to change to ensure sufficient resources and business processes for expansion in the international market. Also, the company can diversify its business to reduce exposure to market-specific risks. Moreover, the fast-food restaurant chain can increase investments for product innovation to address changing consumer preferences and the other trends detailed in the PESTEL/PESTLE analysis of Wendy’s. This SWOT analysis highlights the need for reforms in the fast-food company’s strategies to maintain its global competitiveness in the long term.
References
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- Puyt, R., Lie, F. B., De Graaf, F. J., & Wilderom, C. P. (2020). Origins of SWOT analysis. In Academy of Management Proceedings (Vol. 2020, No. 1, p. 17416). Briarcliff Manor, NY 10510: Academy of Management.
- The Wendy’s Company – Form 10-K.
- The Wendy’s Story.
- U.S. Department of Commerce – International Trade Administration – Travel, Tourism & Hospitality Industry.