Food Service Management and Strategies: Five Guys Analysis Report

This report provides a comprehensive analysis of Five Guys' food service management, encompassing various aspects of its operations. It begins with an introduction and company overview, followed by a detailed examination of sourcing and procurement processes, including the supply chain approaches and key stakeholders involved. The report explores the principles of effective procurement and sourcing, emphasizing the importance of a robust system. It then delves into operations management strategies, including the application of analytical tools like SWOT and Porter's Five Forces to support effective management. The report evaluates different management practices that contribute to successful business operations, highlighting the significance of ethical management for overall business success. It discusses ethical practices within Five Guys and their impact on the business, proposing an improvement plan to address organizational challenges. The assessment of management practices utilizes performance review techniques, leading to recommendations and management alternatives aimed at enhancing performance, complete with an implementation plan. The report concludes by summarizing the key findings and offering insights into the future of Five Guys' food service management.

UNIT-25: FOOD SERVICE MANAGEMENT
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Table of Contents
Introduction......................................................................................................................................3
Company Overview.........................................................................................................................4
Sourcing and procurement processes within Five Guys restaurant.................................................5
Range of food supply chain approaches within Five Guys along with key stakeholders in the
process..........................................................................................................................................5
Principles of effective procurement and sourcing process for Five Guys...................................7
Operations management strategies within Five Guys.....................................................................9
Application of different analytical tools to support effective management strategies.................9
Evaluate different management practices that support successful business operations.............12
Importance of ethical management for overall business success..................................................14
Discuss ethical practices in Five Guys and the impact of these practices on overall business
success........................................................................................................................................14
Improvement plan for organisational challenges within Five Guys..............................................15
Assess management practices within Five Guys with a range of performance review
techniques...................................................................................................................................15
Recommendation and management alternatives to improve performances including an
implementation plan...................................................................................................................19
Conclusion.....................................................................................................................................23
Referencing....................................................................................................................................24
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Introduction
Food service and the management is the success factor for any restaurants which deal with foods
production and service. Various food services are maintained by the food outlets like self-
service, buffet, ready- prepared food, cafeteria and many more. The report will be based on fast
food restaurant named Five Guys Burgers and Fries. The food supply chain and their
stakeholders who are responsible to make their final products will be described along with some
principles of effective procurement and sourcing process. Analytical tools like SWOT and
Porter’s Five Force will be analysed in the context of Five Guys as well as the evaluation on the
management practices so that the company can operate their managerial activities successfully.
Ethical issues have some impact on business that can make the business success in greater
competitions and how Five Guys will assess their performance by assessing management
practices and making an improvement will discussed through the report.
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Company Overview
Five Guys Enterprise LLC is operating their business in the name of Five Guys Burgers and
Fries founded by Jerry Murrell, Janie Murrell. The owner of the Five Guys is the Murrell family
with its key people Jerry Murrell, Jim Murrell, Matt Murrell, Chad Murrell, Ben Murrell, and
Tyler Murrell. It is mainly a fast food restaurant which follows the ready prepared food service
and serves the customers with quality products like Hamburgers, French fries, hot dogs, soft
drinks, milkshakes. In 1986, Five Guys started their journey to the food industry. The numbers of
the outlets are more than about 1500 in 15 different countries along with London operated by
more than 15000 employees. According to a report of 2016, their revenue is about US$ 831.95
million and operating income is about US$ 92.94 million (Five Guys, 2019). Five Guys do not
compromise with their quality ingredients and they do not use fridge for their storage system
rather use only the coolers which made them renowned in the ready to eat food service industry.
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Sourcing and procurement processes within Five Guys restaurant
Range of food supply chain approaches within Five Guys along with key
stakeholders in the process
Five Guys restaurant deals with various kinds of food like Hamburgers, French fries, hot dogs,
soft drinks, milkshakes and the quality raw material of the foods come with the help of their
supply chain. The supply chain management includes the goods and service flow and all the
steps that are needed to make the marketable products (Koster and Delfmann, 2018).
Supply chain approaches within Five Guys
Raw materials source: Five Guys collect their raw materials from reliable source and also they
collect the raw materials from the specified suppliers who ensure the best quality products.
For example: Five Guys do not use the beef that include cow meat rather use only steer and
heifer meat. The companies who do not use the ammoniated procedures in treating ground beef
are collected for the restaurant. The distributors of Five Guys have contact with the major meat
suppliers in US who treat the cattle humanely and maintain all the rules and regulation by
imposed USDA(Five Guys, 2019).
Production: The production of the foods and drinks at Five Guys is done in the outlet according
to the recipes that they maintain all over the world. The branches all over the world follow the
same production method to keep the authenticity of the foods(Koster and Delfmann, 2018).
Packaging: The success and fame of the food also depends on the packaging of the food that
Five Guys has been maintaining properly.
For example: Five Guys make the food in instant basis and serve them on the table with maintain
proper hygiene. For take away foods, the themed bags with white and color is used and the extra
fries are provided in the bags which is complementary. This is the unique feature of Five Guys
while packaging (Five Guys, 2019).
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Storage: Storage system is crucial to any business and it is more in the food service business.
Five Guys collect fresh raw materials in regular basis from the same suppliers who are reliable
and dependable to give the quality one. They do not produce the food from the materials that are
being on storage long time. As being fast food restaurant, they prepare foods and keep it on hot
plate a little time before serving (Five Guys, 2019).
Retail distribution to consumers: Five Guys make the foods to serve the retail customers as
quick as possible ensuring the quality (Koster and Delfmann, 2018). Five Guys also provide the
extra toppings that the customers would like to have and this facility is rare in any restaurant.
They ensure it for all the customers regardless of the location of customers (Five Guys, 2019).
The key stakeholders
Distributors:Distributors helps the food service business to have their necessary products
together. The food service operator like Five Guys does not need to go individually to the
manufacturers of raw materials, producers or factories. It works as connecting bridge for Five
Guys to their retail outlets (Smillie, 2013).
Suppliers: The suppliers of Five Guys play an important role in making the food greater quality
because they ensure the good production method while manufacturing products. Meat suppliers
are from US and potatoes are supplied from Idaho-only north of the 42nd parallel are the
examples.
Chefs: The chefs play the crucial role to make the food delicious and attractive to eat top the
customers. Five Gus train all their chefs and cooking staffs before starting their job and become
expert on their job (Smillie, 2013) .They are no timer in the kitchen of Five Guys restaurant
because they believe that the chefs know when the burger is ready.
Customers: The final users of the goods that are produced in the Five Guys restaurant. The
foods are served on their dining or one can enjoy the take away but they do not deliver their
foods even if it is in Pentagon. They believe that deliver of the food cheapens the products and
their qualities (Five Guys, 2019).
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Principles of effective procurement and sourcing process for Five Guys
In the food service operation, one or two sources are not enough for making the business
successful. Food service needs a greater number of suppliers, manufacturers, distributors for
meeting the needs of various ingredients that are needed to make the products in the restaurants
like Five Guys. A large numbers of small business and suppliers are integrated by the
procurement process. For making the procurement and sourcing process effective one, Five Guys
have maintained some principles that are presented below:
Particular system to manage supply orders:
A particular system need to be there for managing orders. Five Guys collect each of their
ingredients for product ensuring the quality. They use generic procurement software for manage
the supply orders in an effective and efficient manner.
Maintain strong spend analysis program:
The organisation like Five Guys which deals with a greater number of suppliers need to maintain
a spend analysis program. It will give them the clear idea of the monetary flow(Jensen, 2017). In
the food service industry, strong spend analysis can make the organisation to spend efficiently in
others sectors where they are lacking of.
Regional rules and regulations:
To make the procurement and sourcing process effective, Five Guys needs to be aware of the
rules and regulation of the states from where they are collecting raw materials like United
States(Jensen, 2017). The different laws can impact the needs and supply of products from the
particular countries. In United States, the industries are not accumulated in one state rather each
industry is regulated by individual state separately.
Group purchasing:
As Five Guys has more than 1500 outlets in different 15 countries, they should adopt the group
purchasing because it will bring them the large amount savings, discounts, advantages along with
many other incentives(Five Guys, 2019). This principle is generally maintained by the smaller
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company but Five Guys can work out this for their effective procurement and sourcing process
which will bring greater revenue to them.
Meetings with suppliers:
The meeting inregular basis with the suppliers can make the procurement and sourcing process
effective because they have the platform to share updated information about the products that
Five Guys need(Jensen, 2017). This meeting helps to make the close relationship and better
understanding between suppliers and Five Guys which is a better way to acquire quality
products.
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Operations management strategies within Five Guys
Application of different analytical tools to support effective management
strategies
The business in the food service needs to apply several analytical tools in order to their position
in management of the business and to assess how to adopt each of the tools to support
management strategies effectively.
SWOT Analysis:
This Analytical tool will help Five Guys to operate and conduct their managerial activities in
effective manner and over the weakness and threats remaining in the business.
Strength Weakness
 Customized burger
 Has the ability to compete with other
renowned fast food like Burger King,
McDonalds
 Higher quality control
 Maintain strict brand control
 No interest in changing menu or
expanding it
 Do no advertise their products
 Higher setup costs and strict guidelines
for franchise
 Use only selected suppliers
Opportunities Threats
 Menu development for kids
 Advertisements for the restaurant
 Delivery of the foods
 May involve in catering events
 Can offer more healthier substitutes
(swot, 2019)
 Competitors like McDonalds have
consented on changing their menus for
other countries
 High caloric burger than the
competitors(nutrition facts, 2019)
 Need to overcome the specific vendors
for bread as French would not
compromise with their breads
 May face with cattle contamination
issue
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Porter’s Five Force Model:
The model will show the effects of external forces in Five Guys business while dealing the
business in the new entrances, existing firms, greater substitute products, under the power of
suppliers and buyers.
Figure 1: Porter’s Five Force Model
Source: (Micheal E. Porter, 2019)
THREAT OF NEW ENTRANTS:
This is a moderate for Five Guys as the food service industry is high profitable business and less
barriers to make entry in. The switching cost is much lower for the customers as they can switch
their burger with another anytime but new entrances are less likely to enjoy the cost advantages
and loyal customers comparing to existing business like Five Guys.
THREAT OF SUBSTITUTES:
The business of Five Guys can easily affected by the threat of substitutes as fine dining
restaurants and home cooking are greater options for the customers to switch from Five Guys
Burger and Fries (Micheal E. Porter, 2019). This force strengthens the threat with substitute’s
greater food quality, taste and lower cost than Five Guys.
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COMPETTITIVE RIVALRY:
This is the strong force for Five Guys as there are strong competitors and variety of firms like
McDonalds, Burger Kings to compete with them in serving ready to eat foods. The switching
cost is lower for the customers and they will less likely to remain loyal (Micheal E. Porter,
2019). Five Guys positioned their restaurant with customized their burger and free fires with
every orders and this has made them unique in fast food industry.
BARGAINING POWER OF BUYERS:
As there are many competitors, the bargaining power of buyers is higher and they have greater
options to switch on from Five Guys. For this, Five Guys have to focus on the needs and
demands of the customers as the all activities revolve around them. They can develop kids menu
and make delivery of the foods for making it easier for consumers. For the outlets in France, they
can use the French bread in order to satisfy their customers.
BARGAINING POWER OF SUPPLIERS
Five Guys use specific supplier for beef, potatoes and breads and this can increase the bargain
power of the suppliers which will directly affect the business. Higher rate for the raw materials
can change the price of the products in Five Guys which can make some customers dissatisfied.
They should also contact with alternative suppliers to deliver of the ingredients.
Five Guys are managing their business successfully but the analytical tools discussed above have
shown several factors that are needed to focus on for more effective management of the company
and retain in the competitive business world. The SWOT analysis of Five Guys will give them
the idea for using the strengths that they have efficiently and weaknesses to be lessen gradually.
On the other side, the opportunities that have been analysed should be grabbed and applied in the
business to be more competent in retaining their business. The threats are needed to be
overcome by coping with customers demand and controlling suppliers. The intensities of
external forces that are examined by Porter’s Five Force model should considered by Five Guys
and focus on the strong forces like competition, new entrances and customers. Five can also
focus more on the brand image in order to lessen the effect of new entrances and provide more
concentration on customer service.
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