Global Market Entry Strategy for Five Guys

This assignment examines a global market expansion strategy for the fast-food chain Five Guys. It analyzes various potential markets including Japan, India, China, and Singapore, considering factors such as market size, purchasing power, cultural preferences, and government regulations. The document evaluates different market entry modes such as franchising and direct investment, outlining their advantages and disadvantages. Additionally, it discusses communication strategies, contractual obligations, and the overall capacity to pay in each target market.

Running Head: International Marketing
International Marketing

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Contents
Introduction......................................................................................................................................3
Overview of company..................................................................................................................4
Macro analysis (PESTLE)...............................................................................................................4
Competitive forces...........................................................................................................................6
Internal and External Business environment analysis.....................................................................7
Value chain analysis....................................................................................................................7
Primary activities.....................................................................................................................7
Support activities.....................................................................................................................7
SWOT analysis............................................................................................................................8
Evaluation of the potential markets.................................................................................................9
Market selection and market entry................................................................................................11
Recommendations..........................................................................................................................12
Marketing Mix...........................................................................................................................12
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
Appendix........................................................................................................................................19
Appendix 1.................................................................................................................................19
Appendix1.1...........................................................................................................................19
Appendix 1.2..........................................................................................................................20

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Appendix 2.................................................................................................................................22
Appendix 2.1..........................................................................................................................23
Appendix 2.2..........................................................................................................................25
Appendix 3.................................................................................................................................26
Appendix 4.................................................................................................................................30

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Introduction
The report is based on the global market analysis for the company Five Guys Burgers. The
company is one of the American fastest Growing restaurants chains. Five Guys burgers started a
business out in Arlington, Virginia back in the year 1986. Jerry Murrell, his wife and five of his
sons started the company in the USA. The company is having 1,039 stores across U.S. and
Canada and going to expand the business (Burke, 2015). The aim of the report is to analyze the
environment of the business in the global market. The thorough market analysis will help the
marketing consultant to decide the potential market where the company can expand the business.
The company is looking to enter the new market in the year 2019.

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Overview of company
The company is having the operation across the world; the company has a mix of stores as the
company has 200 company-owned stores and 839 franchised stores. In the year 2010, the
company opened its first international store in Canada. Five Guys opened a London Outpost as
its first location outside of North America (Five Guys, 2017). The brand was rated as U.K’s top
choice in the category of the fast food in the entire American category. The fast-food industry is
expanding rapidly and the entire burger category is $40 billion industry in U.S., this industry is
dominated by the McDonald’s, Burger King and Wendy’s (Hansen, 2016).
Macro analysis (PESTLE)
The macro analyses consist of the external environment that can affect the working of the
company. (Refer Appendix1.1)
Political factors
Hotel industry gets affected by the rules and laws imposed by the government. The major issue
faced by the restaurants consist of terrorist attack, as the increase in the political conflicts among
the countries leads to the attacks on the rival country. These activities affect the working of many
restaurants (Robinson, Fallon, Cameron, and Crotts, 2016).
Economic factors
The restaurants get affected due to inflation and interest rate as these are the major factors that
can create an impact on the prices of the services provided by the restaurants. The income level
and income distribution level decides the purchasing power of the people in the country. The

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restaurants select those places for the expansion of the business where they find the more
purchasing power of the customers.
Social factors
There is a rapid change in the lifestyle of the people which result in a change in the buying
pattern of goods and services. The customers nowadays like to consume the high-quality goods
and along with this organization provide the improvised services to the customers (Robinson,
Fallon, Cameron, and Crotts, 2016).
Technological factors
The advance of the technology is increasing in each and every company. Similarly, the
companies come under the hospitality industry also believe in using the innovative technology.
The restaurant's industry makes use of technology to provide the customer attractive and
innovative packages that help the company in enhancing the sales and revenue.
Legal factors
The changes in the legal laws by the government affect the working of the restaurants. Different
countries consist of different laws and regulations, some of the laws are anti-trust law, health and
safety law, consumer protection law and minimum wages to the employees.
Environmental factors
The Environmental factors consist of certain laws and regulation that needs to be followed by the
company. The rules consist of Waste management, water consumption, usage of eco-friendly and
the healthy products. The company should follow the moral obligations towards the environment
of the company.

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Competitive forces
The competitive forces analysis consists of the analysis of the porters five forces. The factors that
create the impact on the Five Guys Burgers are discussed below in Appendix 1.2
Bargaining power of the suppliers
The suppliers of the company play a vital role and in the restaurants, the bargaining power of the
supplier is very low. In the hotel industry, the organization can face the threat in the recruitment
and employment of the employees (Rothaermel, 2015).
Threat of new entrant
The capital expenditure in the restaurant's industry is comparatively high and this leads to the
barrier for the new entrants. The companies are not able to cope up with the companies who are
already established in the industry.
Bargaining power of buyer
Bargaining power of buyer is high in the restaurants as the reason being a large number of hotels
at the prime location. The competitors of the hotels can perform the different practice and tactics
that attract the customers.
Threat of substitutes
The threat of the substitutes is increasing with the increase in the technology but considering the
fact the threat is medium. The video conferencing technology brought a decline in the travel of
the people and their stay in hotels (Rothaermel, 2015).
Threat of rivalry

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The threat of rivalry is increasing day by day, the well-known and branded restaurants like
McDonald’s, Burger King and Wendy’s. These restaurants consist of most of the market share
and the customer easily shifts to the place where they get the preferred services.
Internal and External Business environment analysis
Value chain analysis
Five Guys Burgers maintains the value chain that consists of the primary and the support
activities. This analysis helps the company in creating the value and the competitive advantage,
furthermore please refer appendix 2.1 for further details.
Primary activities
The primary activities consist of inbound logistics of the restaurants, the restaurants maintain the
suppliers, storage, and distribution of the products and services. Operations; the restaurants
believe in maintaining the service standards so that customer can give the delight services to the
customers. Outbound logistics; it involves the way of offering the services to the customers.
Marketing and sales of the restaurants include the promotion activities that are conducted by the
company to generate the awareness among the customers (Barros, 2016). Services; the different
services are provided by the restaurants to the customers such as booking services, delight
experience, cab facility and many more (N. Torres, & Kline, 2013).
Support activities
The aim of the support activities is to provide support to the primary activities followed by the
company. Five Guys burger restaurant consist of well-organized infrastructure that helps the
company to attract the customers. HR; the need of the talented employees is present in each and

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every company. The company believes in forming the relationship with the employees as the
company value their employees. Procurement; procurement of the raw material is essential and
for this, the company forms the relationship with the suppliers so that they can get the best
available raw material. Technology development; The company make use of technology so that
they can provide a maximum of satisfaction to the customer by providing them delight services
along with this the company keeps updating its technology.
SWOT analysis
The SWOT analysis consists of strength and weakness which is used by the company for the
internal analysis and the opportunity and threats which shows the external analysis. (Refer
Appendix 2.2)
Strength- The reputation of the restaurant is a top pick among the burger joints in the
Washington, D.C. area and the company is the fastest growing food chain in the U.S. having the
1000+ locations. The restaurants also provide the online ordering and the home delivery services
to the customers (Mba Skool, 2017).
Weakness- Company doesn’t spend the amount on the mainstream media which is becoming
one of the weaknesses of the company as the company is not able to grab the attention of the
customers. The brand has the less market share as compared to its competitor who is giant
players in the industry.
Opportunities- Five Guys Burger has the opportunity to bring the innovation in the product and
the services. The organization has the opportunity to expand the business in the emerging
geographical countries. The company should focus on the healthy meal options that consist of

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salads, Light burgers and vegetable burgers as more and more customers are becoming health
conscious (Martinez, 2017).
Threats- the company faces the threat of the increasing competitors as the rise in the
competitions affect the market share of the Five Guys Burger. Franchising model leads to
dilution of quality standards and the consistency in service and this is becoming the leading
threat to the company.
Evaluation of the potential markets
The company has decided to expand the business across the world and the potential market
selected by the Five Guys Burger consists of Japan, India, Singapore, and China. The company
decided to expand the business in the Asia regions. The 12C framework is conducted which
shows the analysis of all the countries shortlists by the company. To check the 12C framework
please refer to Appendix 3.
India is one of the developing countries where the fast food industry is on a boom and growing
rapidly. The market of India is largest consumer markets across the world that consists of 45% of
the population under 25 years old. The country operates more than 60 foreign restaurants brands
that include McDonald’s, KFC, Burger King and many others (RNCOS, 2012).

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The prime opportunity for the company Five Guys Burger is urban areas where the company will
be able to grab the attention of the customers to whom they are offering the products. Though,
the global restaurants also faced some of the challenges when they were operating the business in
India. The McDonalds brought the changes in the menu as the company adjusted 70 of its menu
and the update menu of the company also include the vegetarian items.
Japan is another potential market in which company is looking to expand the business. The fast-
food industry registered a growth of 5% in the year 2016 to reach JPY 4,871 billion. The outlet
of the fast food company increased by 2% and reaches to 4,871 in the year 2016 (Euro monitor
International, 2017). Many fast food restaurants like McDonald have brought changes in the
products and have released the new menu items (Japan Trends, 2017). In the year 2010, the sales
of the fast food restaurants were approximately 32.36 billion U.S. dollars. The sales increase
approximately 38.48 billion U.S. dollars in the year 2015. The sales forecast for the year 2020
exceed the 44 billion U.S. Dollars (Statista, 2017).
Singapore fast food industry is also showing a rise and it is forecasted that there will be a rise in
the sales of the fast food restaurants. The forecasted market value of fast food industry of

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Singapore in 2017 accounted for approximately 1.16 billion U.S. dollars (Statista, 2017). The
revenue in the food and beverage segment amounts to US$108m in 2017. User penetration in
Singapore is at 18.0% in 2017 and it is expected to rise 30.6% in 2022 (Statista, 2017). Five
Guys, Burger company can expand the business in the market of Singapore as there is an
opportunity to make a profit.
China is one of the countries that make the maximum of the revenue of US$15,063m considering
the global comparison perspectives. The Chinese market is the growing market in the fast food
industry, McDonald Corporation maintains approximately 38% in the Chinese food market.
Apart from McDonald’s, KFC maintains approximately 4,600 KFC outlets and it is expected to
increase. According to IBIS world, the fast food industry in China generated $135.6 billion in the
year 2016 (Rexaline, 2017). The market of China is saturated and too lucrative for global fast
food restaurants. Considering the analysis, the company should select the market of Singapore
for the expansion.
Market selection and market entry
Singapore will be one of the promising regions where the company can expand the business. The
Singapore is the place where there is a rise in the revenue and the sales of the fast food
restaurants which result in the growth and success of the company. The growth opportunities are
present in Singapore that helps the company to grow in the market. The population of the
Singapore is high as compared to the other countries, the more of the population shows that the
market of Singapore is customer base (Statista, 2017). Though the purchasing power of the
Singaporeans is low so the company should keep the low prices of their product. The company
can make use of market entry mode which helps the company to enter the market. There are

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different types of market entry modes which are available such as Licensing, franchising, joint
venture and whole new subsidiary. (Refer Appendix 4)
The company can select either franchising or the whole new subsidiary as these are the most
preferred options for Five Guys Burger. The market leaders in the restaurants like McDonald’s,
Burger King and many others also make use of franchising the most. Franchising refers to as the
practice of the right to use a firm’s business model and the brand for a prescribed period of time
(Shaw, 2015). The Five Guys Burger should also select franchising to enter the market.
Recommendations
Singapore socio-cultural factors include the quality of life of people. The people of Singapore
maintain the quality of life and consist of people belongings from different social and cultural
background. The culture of the Singapore is materialistic and this is the reason the people live
stressed life. Considering the culture of the country, the company might face the problem in the
dealing with the social preference of the Singapore people (Statista, 2017). The Company Five
Guys Burger will face an issue in the beginning but later the company will find the growth
opportunity in many other regions like India, Malaysia, and China.
Marketing Mix
Product
The product refers to as the good and services offered by the company that satisfies the needs
and wants of the customers. The products and services offered by the company consist of quality
and uniqueness which makes the company different from other companies. The company should
take care of the preference of the people in Singapore and should bring the changes in the

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product considering the demand of the customers. The company should come up with the
innovative product and services that help the company in grabbing the attention of the customers
(Bowie, Buttle, Brookes, and Mariussen, 2016).
Price
The major weapon in the business is priced; pricing strategy plays a vital role in the competitive
world. Five Guys Burgers will face the competition as the customers do have the preferences and
they can shift to the other restaurants. The target customers of the Singapore do have the paying
capacity and they believe in the quality of the products. Managing the quality and the price
together is the toughest thing for the company but the brand should try to keep the prices low
than the competitors.
Place
The Five Guys Burgers is having outlets in UK and Canada as the company is expanding the
business soon company will be offering the product at the different places across the world. In
Singapore also the company need to select the prime location where they can provide the
products to the targeted audience (Bowie, Buttle, Brookes, and Mariussen, 2016).
Promotion
The company should make use of the innovative promotional strategies. This is one of the
weaknesses of the company that they don’t make use of the right promotional activity to promote
their product in the market. The use of the social media for promoting the products in the market
is the best method that can be used by the company. The promotional activity will enhance the
awareness and leads to the brand value which results in the enhancement of the sales and
promotion.

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Conclusion
The report shows the analysis of the external environment and the opportunities that help the
company in identifying the best suitable potential market for the expansion. The analysis of the
potential market consists of Japan, India, Singapore, and China. Considering the analysis,
Singapore is the best suitable market for the company as it helps the company in registering the
growth. The population of the Singapore is more than the other markets and the company should
select the franchising as this is the best mode through which company can enter the market. The
recommendation is provided to the company and company might face some of the risk factors
that should be take care by the company.

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References
Adamkasi, 2017, Pestle Analysis of hotel industry, Viewed on 22nd November 2017,
http://freepestelanalysis.com/pestel-analysis-of-hotel-industry/
Barros, C.P., 2016. A productivity analysis of a chain of hotels. The Routledge Handbook of
Hotel Chain Management, p.359.
Bowie, D., Buttle, F., Brookes, M. and Mariussen, A., 2016. Hospitality marketing. Taylor &
Francis.
Burke, M., 2015, Five Guys Burgers: America's Fastest Growing Restaurant Chain, Viewed
on 22nd November 2017, https://www.forbes.com/forbes/2012/0806/restaurant-chefs-12-five-
guys-jerry-murrell-all-in-the-family.html#2f5f249c4ee4
Business Set Free, 2017, Porter’s Value Chain, Viewed on 22nd November 2017,
http://www.businesssetfree.com/porters-value-chain/
Cheng, D.S., 2013. Analyze the hotel industry in porter five competitive forces. Journal of
Global Business Management, 9(3), p.52.
Euro monitor International, 2017, Fast Food In Japan, Viewed on 22nd November 2017,
http://www.euromonitor.com/fast-food-in-japan/report

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Five Guys, 2017, Family, Viewed on 22nd November 2017,
https://www.fiveguys.co.uk/about#tab-family
Hansen, D., 2016, Five Guys making a steady rise overseas, Viewed on 22nd November 2017,
https://www.bizjournals.com/washington/morning_call/2016/03/five-guys-making-a-steady-
rise-overseas.html
International Marketing Strategies, 2017, International Marketing Strategies, Viewed on 22nd
November 2017, https://cashflow4real.wordpress.com/2009/07/14/28/
Japan Trends, 2017, Fast Food, Viewed on 22nd November 2017,
http://www.japantrends.com/tag/fast-food/
Ling, R.N.Y., 2014, Singaporeans Have The Lowest Purchasing Power Among The
Developed Countries, Viewed on 22nd November 2017,
https://thehearttruths.com/2014/04/27/singaporeans-have-the-lowest-purchasing-power-
among-the-developed-countries/
Martinez, B., 2017. A SWOT Analysis on Millennials in the Workplace: Increasing Manager
Success with Millennial Employees in the Hotel Industry (Doctoral dissertation, California
State Polytechnic University, Pomona).
Mba Skool, 2017, Five Guys SWOT Analysis, USP & Competitors, Viewed on 22nd
November 2017, http://www.mbaskool.com/brandguide/food-and-beverages/10294-five-
guys.html

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Ministry of Communication and Information, 2013, Is Purchasing Power in Singapore low?,
Viewed on 22nd November 2017, https://www.gov.sg/factually/content/is-purchasing-power-
in-singapore-low
N. Torres, E. & Kline, S., 2013. From customer satisfaction to customer delight: Creating a
new standard of service for the hotel industry. International Journal of Contemporary
Hospitality Management, 25(5), pp.642-659.
Panibratov, A., 2017. International Strategy of Emerging Market Firms: Absorbing Global
Knowledge and Building Competitive Advantage. Taylor & Francis.
Rexaline, S., 2017, The Chinese Fast Food Market, Viewed on 22nd November 2017,
https://www.benzinga.com/news/17/01/8894515/the-chinese-fast-food-market
RNCOS, 2012, Indian Food Services Market Forecast to 2015, Viewed on 22nd November
2017, http://www.rncos.com/Market-Analysis-Reports/Indian-Food-Services-Market-
Forecast-to-2015-IM446.htm
Robinson, P., Fallon, P., Cameron, H. and Crotts, J.C. eds., 2016. Operations management in
the travel industry. CABI.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Shaw, K., 2015. Foreign Market Entry Strategies. China-USA Business Review, 14(8).
Statista, 2017, Fast food industry in Singapore, Viewed on 22nd November 2017,
https://www.statista.com/study/46363/fast-food-industry-in-singapore/
Statista, 2017, Food and Beverages, Viewed on 22nd November 2017,
https://www.statista.com/outlook/253/124/food-beverages/singapore#

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Statista, 2017, Market value of the fast food industry in Singapore from 2013 to 2017 (in
million U.S. dollars)*, Viewed on 22nd November 2017,
https://www.statista.com/statistics/724864/market-value-of-the-fast-food-industry-in-
singapore/
Statista, 2017, Sales of fast food restaurants in Japan from 2010 to 2020 (in billion U.S.
dollars), Viewed on 22nd November 2017, https://www.statista.com/statistics/660110/japan-
fast-food-restaurant-sales/

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Appendix
Appendix 1
Situation Analysis
Appendix1.1
Macro analysis– PESTLE
(Source: Adamkasi, 2017)
Political
 The rise in the amount of the taxes
restaurant has to pay.
 Political issues enhance the terrorism
rates.
Economic
 The purchasing power of Patrons is
high in the UK.
 Level of income.
Socio/ Cultural factors
 Consumer preference is included in the
Technological factors
 To make the order placement and

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might affect the restaurant.
 The lifestyle of the customers can affect as
some of the customers like to consume the
healthy products with good quality
(Adamkasi, 2017).
product distribution process
convenient it is important to make
use of technology.
 The company should make use of
technology for promoting the
products and services.
Legal factors
 Five Guys burger make sure that they
fulfill the regulation such as Employment
Law, antitrust law, consumer protection
and the health and safety law.
Environment factors
 The restaurant needs to make sure
that they follow the environmental
related laws such as waste
management and water conservation.
Appendix 1.2
Porter’s five forces

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The Porter's five forces on the Five Guys burger is discussed below:-
Bargaining power of the
suppliers
 A large number of the substitute inputs is available.
 High competition among the suppliers of the raw
material.
 Low cost of switching the suppliers.
 Diverse distribution channel.
Threat of New Competitors  Brand recognition and strong reputation in the
market is important and this leads to the threat for
the company.
 Customers are loyal to the existing brands so the
threat of losing the customers (Cheng, 2013).
Porter
Five
Forces
Threat of
Substitutes
Threat of
New
Competitors
Bargaining
power of the
suppliers
Intensity of
Existing
Rivalry
Bargaining
power of
customers

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 Distribution of products needs the strong network
which is lacking.
Threat of Substitutes  The availability of the differentiation of the product
leads to the threat.
 The customers of the Five Guys Burger are less
likely to switch to another products and services.
Bargaining power of customers  Low buyer price sensitivity, this means that if the
prices of the product increase then it will not affect
the customers.
 A large number of customers has different
preferences.
 Low dependency on distributors.
Intensity of Existing Rivalry  The growth rate of the fast food industry is high
which leads to the rise in the competition among the
rivals.
 The size of the industry is large so there is the
presence of the multiple firms.
Appendix 2
Internal and External Business environment analysis

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Appendix 2.1
Porter’s value chain analysis
(Source: Business Set Free, 2017)
Primary Activities
Inbound Logistics
 The dealing with the suppliers.
 Management of the staff, inventory and the stock requisitions.
 Adaption of the proper strategies by the Five Guys Burgers to maintain the
environment.
Operations
 Management of the services provided by the restaurant like service time, customer
feedback, quality of the food, and the synchronization of the services.
 Management of the various payment modes.
Outbound Logistics

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 The outbound logistics consist of the ensuring the time taken to distribute the ordered
products to customers.
Marketing and sales
 The activity of the promotion and the tools of the promotion used to generate the
awareness.
 The management and development of the attractive packages or combos that helps the
restaurants in enhancing the sales of the products.
Service
 Communication with the customers in their language.
 Handling of the customer complaints and welcoming the feedback.
 The offering of the delight services (N. Torres, & Kline, 2013).
Support Activities
Firm Infrastructure
 The management of the well organized the sitting place.
 Interior management in each and every outlet of the company.
Technology Development
 The use of the advanced technology for providing online order placing services.
 Offering the convenient mobile app
Human resource

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 Management of the skilled, trained and the experienced workforce.
 The department of Five Guys Burger makes sure that they provide the additional
benefits to their employee's so that they can retain their employees.
Procurement
 This activity consists of the formation of the strong relationship with the suppliers as
this leads to the delivery of the qualified raw material.
 Procurement helps the company to store the products so that lack of supply and
wastage can be managed effectively by a manager.
Appendix 2.2
SWOT Analysis
Strength
 Fastest growing fast-food chain
 Value for money with affordable meals.
 Popular in the market due to fresh food
with quality (Mba Skool, 2017).
Weakness
 Less awareness about the brand in the
market.
 The Less global presence and low
market share.
Opportunity
 Expansion of products in the new
markets.
Threats
 Awareness among the customers about
the healthy food.

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 Innovation in the services in the
existing market.
 Rise in the competitor’s strategies and
the activities.
Appendix 3
12 C’s framework
12 C’s
Framework
Japan India Singapore China
Culture/
Consumer
behavior
The customers of
Japan like to
consume fast food
but have choices in
the spices.
The consumers
of the India
demand for the
veg product
and non-veg
both.
The consumer
lives in
Singapore
belongs to
different
countries so there
is fluctuation in
the requirement
but five guys will
be able to sell
their product
easily
(International
Marketing
People of China
like to dine out
but their
preference is
non-veg more.