Strategic Assessment of Five Guys

Running head: STRATEGIC MANAGEMENT
Topic- Strategic assessment of Five Guys
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EXECUTIVE SUMMARY
The report is based on the strategic assessment of Five Guys, the American fast food
restaurant chain. Assessment of both external and internal environment is done and the most
favorable strategic factor for future expansion and sustainability is considered. Based on that
international expansion strategies for European market diversification specially in Belgium is
elaborated. Chances of success in the European food industry is deduced based on the various
strategic models for analysis. The main models used here include PESTEL framework, Porter’s
Five force Framework and Porter’s value chain analysis. Based on them the strategic
recommendation is developed and future competitive strategies are also developed based on
current market structure by the help of Porter’s Generic strategies of Competition framework.
Future strategic directions and expansion methods are recommended for Five Guys in
consideration to its markets, products and services offered. The company has simple vision and
mission which is- to keep it simple and product quality maintenance. Corporate ethics is simple
and compassionate to both organization and its employees. The rich cultural support help it
maintain its social responsibility well balanced and help avoiding any type of conflicts in the
organization. Stakeholders gain is focused in every operational mode and this is what that
differentiates Five Guys from all its competitors in this tough burger market competition. And in
recent times, the company is focusing on international expansion through its franchising option.

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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
COMPANY AND INDUSTRY BACKGROUND......................................................................4
KEY CHALLENEGS FACED BY FIVE GUYS........................................................................5
EXTERNAL ENVIRONMENT ANALYSIS.................................................................................6
MACRO PESTEL ANALYSIS...................................................................................................6
MICRO PORTER’S FIVE FORCES FRAMEWORK................................................................9
INTERNAL ENVIRONMENT ANALYSIS................................................................................12
VALUE CHAIN ANALYSIS....................................................................................................12
IDENTIFICATION OF COMPETITIVE STRATEGIES............................................................14
PORTER’S GENERIC STRATEGIES.....................................................................................14
RECOMMENDATIONS...............................................................................................................16
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

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INTRODUCTION
The report is based on the strategic assessment of Five Guys, a fast food restaurant chain
in Washington DC, America. Strategic assessment is based on the external and internal
environment analysis and identification of strategic alternatives along with recommendations to
expand and strengthen its European market positioning in Belgium. In this section a brief
company introduction along with industry summary is provided. Key challenges faced by Five
Guys is also highlighted in this section.
COMPANY AND INDUSTRY BACKGROUND
Five Guys Enterprises LLC starting its operations back in 1986, is basically an American
fast food casual restaurant chain focusing on hamburgers, hotdogs and French fries. Trading
name is Five Guys Burgers and Fries. From 2003 the company started its franchising business
and has shown rapid market expansion and within a short span of time it became the fastest
growing fast food chain in the US (Fiveguys.com 2019). The name ‘Five Guys’ is because of its
founders, the five Murrell brothers. After huge success in America the company first opened its
location outside the country in UK and soon it gained huge popularity there also. At present Five
Guys is planning to expand its European market share by diversifying business in Belgium. This
report will thus focus on its Belgium expansion strategies.
A brief background of the fast food industry in this regard is important to have better
understanding of the strategic move by Five Guys. The fast food landscape in North America and
Europe are somewhat similar as per fast food trend is concerned (Aguilera et al. 2017).
Differences are there in market chain penetration, projected growth, economy size and consumer
preferences of tailor-made choices. European consumers find limited time to be factor for

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preparing food at home or sit for a long-time family dinner in some cozy restaurant and this is
the reason for preference of quick-service fast foods specially burgers and fries. Whereas in
North America the market share of fast food is almost half (44%) of the total restaurant sales
(Alon 2014). Independent fast food restaurant chain operations are growing faster in European
countries as well but unlike American counterparts the penetration rate is considerably lower
(Azar 2014).
KEY CHALLENEGS FACED BY FIVE GUYS
Five guys are having rapid expansion in one hand and is also facing criticism on the
other. A popular magazine, Men’s Health has opined that the meals of Five Guys are unhealthy
and have higher calorific values and full of saturated fats. French Fries of Five Guys was also
mentioned in the ‘top 10 worst fast food meals’ in America (Fiveguys.com 2019). This is one of
the major hindrances in tis overseas operations as food criticism will leave its new unknown
market expansion at risk. However, leaving all criticism aside the challenge is in itself. The
company is finding it difficult to maintain the Five Guys experience of staff enthusiasm and food
quality intact. Both financing and franchising are also creating problems in recent times and the
company is finding greater opportunities for its European expansion specially in Western Europe
(Boje, Haley and Saylors 2016). Social media is also creating issues in its no food photography
policy and is hampering its ‘no advertisement policy’ and in recent times the company has
changed its advertisement mode and using digital ads to remain in e-space. Also, there is no
delivery options available for Five Guys which is another reason for its competitive disadvantage
among other fast food restaurants like McDonalds, Wendy’s, burger king and Freddie’s
(Fiveguys.com 2019). And above all, European people are becoming more health conscious and
the country also has lowest projected growth rates in comparison to American market which are

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increasing the challenges for Five Guys in its expansion strategies and Five Guys need to be
more cautious in developing the right strategy for its international expansion.