Five Guys Burgers: Analysis of Global Market Expansion Strategy

This report provides a comprehensive analysis of the international market for Five Guys Burgers, examining its potential for global expansion. It begins with an overview of the company, including its history and current operations, followed by a macro-environmental analysis using the PESTLE framework to assess political, economic, social, technological, legal, and environmental factors. The report then delves into competitive forces using Porter's Five Forces model and analyzes the internal and external business environments. A value chain analysis explores primary and support activities, and a SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats. The report evaluates potential markets, including India, Japan, Singapore, and China, using the 12C framework. Ultimately, the report recommends the market of Singapore for expansion and concludes with a discussion of the marketing mix. Appendices provide supporting data and analyses.

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