Five Guys Burgers: Detailed Report on Global Expansion Strategies

This report presents a case study of Five Guys Burgers' global expansion strategy, focusing on potential markets in Japan, India, Singapore, and China. The executive summary highlights the growth of the fast-food industry despite economic challenges and changing consumer preferences, emphasizing the opportunities for businesses. The report includes PESTEL and SWOT analyses to assess the external and internal environments, respectively, along with the 12Cs framework to evaluate market suitability. Key topics covered include macro and competitive factors, value chain analysis, and the application of Hofstede's model. The report concludes with an in-depth look at the socio-cultural factors of Singapore as a chosen market, providing recommendations for Five Guys Burgers' expansion plans. The report also provides insights into the competitive landscape, including Shake Shack and other fast-food chains.

Running Head: Business management 1
Business management

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Executive Summary:
Global fast food restaurant industry has managed to grow from last five years despite the fact of
weak global economy and increase of awareness of health risk in the society such as risk related
to diet high in fat, salt, and sugar. Attempt made by industry in responds to change of customer
preferences also result in revenue of growth. In next five years till 2022, it is forecasted by IBIS
World that fast food industry will grow in same manner. This industry provides benefit to the
global economy, and improvement in this industry is ensuring because consumers continue to
spend their resources on small luxuries such as eating out. This industry also provides various
new opportunities to the business organizations at global level. This report states the case study
of Five Guys Burgers, and plan to spend their business in four countries and that are Japan, India,
Singapore and China.

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Contents
Executive Summary:....................................................................................................................................2
Introduction:...............................................................................................................................................4
Macro and competitive factors that affect global fast food industry:.........................................................4
PESTEL Analysis:......................................................................................................................................5
Internal business environment of Five Guys Burgers:.................................................................................7
Value chain analysis:................................................................................................................................7
Global competitive factors:.....................................................................................................................7
SWOT of Five Guys Burgers:....................................................................................................................8
Potential target markets:...........................................................................................................................10
12Cs Framework:...................................................................................................................................10
Hofstede model:....................................................................................................................................12
Chosen country:........................................................................................................................................13
Socio-cultural factors of Singapore:...........................................................................................................13
Conclusion:................................................................................................................................................13
References:................................................................................................................................................14
Appendix:..................................................................................................................................................16

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Introduction:
Asia pacific was considered as fourth fastest growing region in the world in context of fast food
industry. In lieu of value growth rates, this industry witnessed various ups and downs over the
last decade. Suddenly, a constant positive trend of eating out gives rise to the disposable incomes
and overall health of economies.
There are number of countries such as Hong Kong, Japan and South Korea which have high
frequency of eating out such as with per capita expenditure almost as high as their Western
counterparts. On the other hand, countries like Indonesia, the Philippines and India are eating out
on weekly basis but not on daily basis, as compared to western counterparts. Consumers still
preferred Asian food because this food is healthy as well as tasty. In 2016, China, Japan and
India together achieve 83% of total fast food value sales in the region (Euro monitor
International, 2017; IBIS World, 2017)
This report states the internal expansion strategies for Five Guys Burgers in four countries that is
Japan, India, China, and Singapore. This paper states various aspects of internal expansion
strategies, and lastly paper is concluded with brief recommendations and conclusion.
Macro and competitive factors that affect global fast food industry:
All organization must operate on the basis of their target market, and for this context market
refers to the set of all potential buyers and sellers of specific product or service (Kotler, Brown,
Adam & Armstrong, 2004). It is necessary for organization to apply marketing management
which includes analyze, plan, implement, and control plans which are framed for the purpose of
creating, building, and maintaining beneficial exchanges with the target buyers for the purpose of
achieving the goals stated by organizations (Kotler, et al, 2004).

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PESTEL Analysis:
The most important factor for ensuring effective marketing management is the proper evaluation
of environment of marketing. This involves actors and forces from outside marketing which
directly affects the ability of marketing management to develop and maintain successful
transactions with the target customers. This environment consist various micro and macro-
environment factors. PESTEL analyses for Five Guys Burgers are stated below: (Figure 5)
Political Political factors which affects fast food industry changes from country to
country, but in all these factors compliance factor is the most important
which include regulations related to wages, hygiene, and food quality.
These political factors are considered as most important factors which
affect the fast food industry, and it is the attitude of the government
which ultimately affects the business performance of the organization.
Economic Recession also affects the growth of fast food industry to some extent,
and from the time it passed, spending per consumer has increased.
Because of recession, restaurants include cheaper options in their menus
and also focus on customer services. Customer service is the most
important area which is struggled by the brands at the time of recession
for the purpose of retaining customers. It must be noted that delicious
food was not sufficient to retain the customers, and because of this it is
necessary that Five Guys Burgers supplement the delicious food with low
cost and best customer services.
Social Social context includes the health and lifestyle trends which influence the
fast food industry. Increasing awareness of people in context of health

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also affects the growth of fast food industry. Now people think twice
before they eat, and this changed attitude of consumer’s pressure the
restaurants to include healthy food options in their menu. It is also
recommended to the Five Guys Burgers to include healthy and organic
food options in their menu.
Technological Technological changes already result in number of changes in the way
through which restaurants engaged their customers, and they also affect
the marketing and advertising methods used by the restaurants. Five
Guys Burgers can also use social media channels to engage their
customers.
Environmental Changing approach of government towards the environment pressure the
brands to adopt more green approach. In every country quality standards
become stricter. However, this greener approach of restaurants also helps
them in attracting the customers and gain customer loyalty.
Legal Pressure imposed on fast food industry because of the changes occurred
in legal requirements has risen. Quality of food and nutrition’s areas are
the most important areas which are affected by law. Now, it also includes
packaging and handling of waste (Pratap, 2016).

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Internal business environment of Five Guys Burgers:
Value chain analysis:
Five Guys Burgers can create value for their organization by using the Porters Value Chain
Analysis, and this chain determines the activities which create value for the business. Primary
activities that occur continuously within the corporation create value for customers. For this
purpose value creating activities of Five Guys Burgers are marketing and selling the product,
distributing and storing incoming products, and creating the final product. However, support
activities also create value for Five Guys Burgers. Following are some value creating activities
of Five Guys Burgers (Pullizzi, 2010):
Marketing and selling- Five Guys Burger are still attached with their roots, and for this they keep
the things simple which means good product, reasonable price, and clean place. This
organization also relies on online marketing, in other words they rely on social media for their
promotional activities.
Distributing and storing incoming products: Five guys Burgers ensures best distribution of their
products and also in providing best services to their consumers.
Porter’s Five Forces identifies the competitive force which directly affects the fast-food industry,
and these competitive forces are defined Figure 1 (Ibrahim, 2012):
Global competitive factors:
The fast food industry is considered as highly competitive and fragmented, and in this industry
Five Guys Burgers operated from last number of years along with Shake Shack and In-N-Out.

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All these brands are characterized for using the high quality ingredients at reasonable prices. It
must be noted that Shake shack is considered as biggest competitor of Five guys burgers which
not only compete with “better burger” companies, but also restaurants in other segments, such as
quick service restaurants, and even convenience stores and supermarkets (Elbushra & Kollias,
2016).
SWOT of Five Guys Burgers:
SWOT stands for strength, weakness, opportunity, and threat. Following is the SWOT of Five
Guys Burgers and Fries:
Strength
 Customization of burgers is considered
as best thing by the Five Guys burgers.
 The Murrell family provides franchises
only to the applicants who are well-
qualified.
 They prove their ability by competing
with the other fast food outlets such as
Shake Shack and McDonalds.
 In 2012 this chain is voted as best
burger chain, and experience high level
of customer retention.
 Strict brand control.
 They paid their employees higher than
Weakness
 This organization shows resistance in
expanding and improving their menu.
 They cook in peanut oil which is
considered as healthier option.
 No advertisement.
 They only have one healthy option on
their menu that is vegetable sandwich.
 They have very strict guidelines for
their franchisee, and these strict
guidelines affect the potential buyers.
 They have very high start-up costs for
franchisees.

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minimum wage.
 They mainly focus on providing fresh
food quality, as they do not have
freezers they only have coolers.
Opportunity
 They have various opportunities to sell
their franchisees.
 Organization can focus on developing
the kid menu.
 Organization can offer more healthy
options to their customers.
 Organization can focus on
advertisement.
 Organization can also opt for home
delivery.
 Organization can also take chance
under catering (SWOTanalysis, n.d.).
Threats
 Competitors such as burger king,
McDonalds, Shake shack, etc.
 Weak economy.
 Organization serves the products which
have high calorie intake.
 Cattle contamination could be a
problem since they use specific sources
for their beef.

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Potential target markets:
12Cs Framework:
Other than marketing strategies there are some other important areas which must be considered
by organization while achieving its goals in international market, and these areas are considered
as 12Cs of international market (Figure 3):
12Cs
framework
India Japan China Singapore
Country India is the
country which is
still preferred
home cooked food
and eats out on
weekly basis and
not on daily basis.
Market and
business
infrastructure of
the India for fast
food industry is
still less suitable
because people
still rely on street
food and dhabas.
In Japan
usually people
preferred their
tradition
cuisines in
comparison of
fast food such
as their
traditional fish
and rice-based
cuisine
(Financial
Times, n.d.).
China witnessed
high growth of
Fast food industry
in last few years,
and people of
China preferred
the fast food
because of their
busy life, growth
in income and
standard of living.
People in
Singapore
preferred fast
food over their
local food and
home cuisine,
and because of
this fast food
industry in
Singapore shows
tremendous
growth (Zakaria,
n.d.).
Culture Indians mainly
rely on healthy
food because of
their traditional
values and norms.
Japanese
consider their
traditional food
healthy and rely
on that food.
Chinese are more
concern about
their culture and
preferred the taste
of their traditional
food.
Customers
preferred fast
food.
concentration Fast food
market size in
India shows the
steady growth
from the period of
2010 - 2014 i.e.,
29.78 percent to
35.18 percent
(Kannamal &
Suvakkin, 2016).
Fast food
market size in
Japan also
shows the
steady growth
from the period
of
2010 – 2017,
but growth is
still slow as it
High growth of
this industry in last
few years.
Show steady
growth in fast
food market after
2000.

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grows only
10% (Statista,
n.d.).
communication Communication
channels in India
are strong and
Five Guys can
choose various
channels to
promote their
products.
In Japan,
communication
channels are
week as
compared to
other countries.
Strong
communication
channels.
Communication
channels in
Singapore are
strong.
Channels of
Distribution
India also has
strong channel of
distribution which
facilitates the
distribution of
products in
effective manner.
Japan still lacks
individual
distribution
channel.
Strong channel of
distribution.
It has strong
channel of
distribution.
capacity India still lack in
capacity of
consumer to pay
and consumer still
choose cheap
street products.
But things are
changing from
last few years.
Consumers in
Japan are more
concern for
quality and they
are not
interested in
cheaper
products.
Increase in
standard of living
and consumers
have capacity to
spend.
Consumers are
more concern for
quality and have
good capacity to
spend on fast
food.
Currency Indians usually
use hard currency
to pay their bills.
Japanese
generally use
soft currency to
pay their bills.
Prefer both digital
payments and hard
currency.
They generally
prefer digital
payments.
Control and
Coordination
There is less
control of
international
marketer in the
domestic market
of India. Local
food shops are
more preferred by
the consumer.
As stated
above,
consumer’s
mainly
preferred local
food and
because of this
they give
preference to
local shops, and
because of
these
international
marketers have
less control
High control over
market by
international
marketers.
International
marketers have
good scope of
control over the
market of
Singapore.

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over
international
market.
Commitment They are less
committed to
quality and
preferred cheap
products.
They are more
committed to
quality and do
not preferred
cheap products.
Preferred cheap
products.
They are not
committed more
towards quality
and preferred
cheap products.
choices In India various
choices are
available for
international
marketers, as they
can target number
of markets such as
young generation,
people with health
consciousness.
In japan,
international
marketers can
target the
market on
demographic
basis, age basis,
and also on the
basis of health.
Targets markets
are young
generation, and
families and
salaried people
also.
Targets markets
are young
generation,
families, kids,
and travellers.
Contractual
Obligations
Credit ratio in
India is high
which means this
country accepts
long term credit
period in business.
Credit ratio in
Japan is not
high, and
country does
not accepts
long term credit
period in
business
Less credit ratio. High credit ratio.
Caveats Local risk in this
country is high as
compared to other
countries
(Marketing for
excess money,
2009).
Local risk in
this country is
also high.
Local risk is low (. Local risk in this
country is also
Low.
Hofstede model:
Source: Hofstede
insightsModel
India Japan Singapore China
Power distance
states less equal
societies.
Score-77
Less equal
society.
Score- 54
Less equal
society
Score- 74
Less equal
society
Score- 80
Less equal
society
Individualism
states degree of
interdependence
Score-48
They prefer to
belong from
Score-46
They prefer to
belong from
Score-20
People belong to
groups.
Score-20
People belong to
groups.