Marketing Case Study: Five Guys Burgers Expansion Strategy Report

This case study examines Five Guys Burgers, a fast-food chain, analyzing its performance within the global fast-food industry. The report begins with an executive summary, followed by an introduction to the industry, including factors like changing lifestyles, low product costs, health consciousness, and the impact of global cuisine. It utilizes Porter's Five Forces model to analyze the competitive landscape and includes an internal SWOT analysis of Five Guys Burgers. The study explores potential markets such as China, India, Japan, and Singapore, with a detailed 4C analysis, and ultimately recommends India as a prime expansion opportunity, suggesting a franchisee model for market entry. The marketing mix for India is also discussed. The report provides a comprehensive overview of the company's strengths, weaknesses, opportunities, and threats within the fast-food sector and offers insights into its expansion strategies. The assignment is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

Running head: Five Guys Burgers
Marketing Assignment
Five Guys Burgers: Case Study

Five Guys Burgers 1
Executive Summary
Global fast food industry is has been gaining ground since the last decade with immense number of
organized and unorganized players joining the league. The report throws light on one such player Five
Guys Burgers which was established in 1986 and since then has shown over 700% growth. The industry
analysis shows the current ongoing trends in the industry as well as the threat of new entrants and
substitutes along with bargaining power of buyers and suppliers. The fast paced lifestyles of the
consumers has led to the growth of this industry (Sorokina, 2015). A significant part of the fast food
industry still continues to be unorganized, however, the organized sector is becoming a global cuisine.
This report lays emphasis of Five Guys Burgers’ strengths and weaknesses. The company has a strong
brand name and hence it was not difficult to find information on the same. Also the company has a
unique policy of not investing on advertising at all but paying their employees very high (Keiningham,
2014). They believe that if their employees are satisfied then they will automatically work harder to
please consumers.
Five Guys burgers expansion plans have been considered and new markets including China, India, Japan
and Singapore have been analyzed in this report. Expansion to India has theoretically proved to be a
better opportunity for the brand. This is because of high population and low competition existing in the
subcontinent.

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Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................5
Global fast food industry.............................................................................................................................5
Factors affecting global fast food industry..............................................................................................6
Fast paced lifestyles.............................................................................................................................6
Low cost of products...........................................................................................................................6
Increasing obesity and health consciousness (Appendices 6)..............................................................6
Easy availability....................................................................................................................................6
DeMarketing........................................................................................................................................6
Global cuisine......................................................................................................................................6
Porter’s five force model.........................................................................................................................7
Threat of new entrants........................................................................................................................7
Threat of substitution..........................................................................................................................7
Bargaining power of buyers.................................................................................................................7
Bargaining power of suppliers.............................................................................................................8
Industry rivalry.....................................................................................................................................8
Internal company analysis: SWOT analysis..................................................................................................8
Strengths.................................................................................................................................................8
Weaknesses.............................................................................................................................................9

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Opportunities..........................................................................................................................................9
Threats.....................................................................................................................................................9
Potential markets: Japan/India/Singapore/China......................................................................................10
12 C analysis..........................................................................................................................................10
12 C Analysis......................................................................................................................................10
China..................................................................................................................................................10
India...................................................................................................................................................10
Japan.................................................................................................................................................10
Singapore...........................................................................................................................................10
Reasons for selecting India....................................................................................................................11
Mode of entry to India..............................................................................................................................12
Franchisee model..................................................................................................................................12
Marketing mix for five guys burgers in India.............................................................................................13
Product..................................................................................................................................................13
Price.......................................................................................................................................................13
Promotions............................................................................................................................................13
Place......................................................................................................................................................14
References.................................................................................................................................................15
Appendices................................................................................................................................................17

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Introduction
The fast food industry of the world has been growing at a rapid pace. This is potentially due to increasing
demand, changing lifestyles and sundry availability of options to consumers. Since 1970 till 2016 the
revenue of the industry has grown over 30 times (Welch, 2010). Globally, the fast food industry
generates more than GBP 433 billion annually and is expected to generate GBP 493 billion by 2020
(Appendices 1). The burger industry alone contributes to GBP 30 billion of the revenue generated.
Predominant players of the burger industry are McDonalds, Burger king and Wendy’s (Wilk, 2006). This
report throws light on Five Guys Burgers which is a leading burger joint founded in 1986 by Jerry
Murrell, his wife and his five sons. At present, the brand operates via 1039 stores across US and 41
stores spread over UK. Since 2006, the company has shown a stupendous growth of 792%. Their motto
is “To perfect and serve” and this is exactly what they promise to their customer every day (Lang, 2015).
Currently, the brand is looking at further international expansion plans to the Asian market. The details
of which are shared below.
Global fast food industry
Global fast food industry generates over GBP 433 billion annually and continues to be moving on a
growth trajectory with an expected compounded annual growth rate of 4.2% in the forthcoming years
(Pre Newswire, 2017). According to recent survey, the industry is expected to hit the target of GBP 493
billion by the end of 2020 (Globe newswire, 2017). However, it has been established that the actual data
is difficult to estimate due to the increasing number of roadside vendors. Also the nature of market
being predominantly unorganized, makes it even more tedious to grab accurate data.
Fast food is basically empty calorie food which has a bulk of calories and few or no micronutrients at all.
This fast food is served by QSR (Quick service restaurants) and roadside vendors. A number of trends
have impacted the industry and helped reach the strata it has achieved today. Increasing urbanization,
globalization and privatization has made it easier for brands to conduct international expansion
(Baggaley, 2014). Whereas, rapid paced lifestyles and convenience accompanied by fast food has helped
the industry created a vast market of consumers.

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Factors affecting global fast food industry
Fast paced lifestyles
There has been a significant shift in the lifestyles of people. The excessive work load and other
commitments have left people with less time to spare. Therefore this fast lifestyle of people provides for
a perfect opportunity for the fast food industry to market their products (Nestle, 2013).
Low cost of products
Besides less time, the products also cost less and are pocket friendly. A five guy’s burger would cost a lot
lesser than an Indian or Italian meal eaten at a restaurant. This low cost is hence able to serve to a larger
target market and leads to increased demand (Belasco, 2014).
Increasing obesity and health consciousness (Appendices 6)
Increasing obesity and health consciousness among people has adversely impacted the growth of the
fast food industry (Smith, 2015). People are becoming increasingly health conscious and focusing on a
healthier diet. This is impacted the industry as now the players of the industry need to innovate and
include healthier options in their menus to avoid losing base.
Easy availability
Fast food joints are easily available in every nook and corner of the globe. The number of both organized
brand outlets and unorganized roadside vendors have increased (Walker, 2014). This easy accessibility
has also given a boost to the industry.
DeMarketing
Due to increasing obesity, governments of various countries have started DeMarketing the fast food
items and started spreading awareness about the ill effects of consuming them excessively (Medina,
2016). This is an important factor affecting the fast food industry.

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Global cuisine
One of the most important factors affecting the industry is the emergence of fast food as a global
cuisine. Most of the industry players work on franchise model and hence people travelling to different
parts of the world are able to access it easily (Metin, 2015). These brands are considered as safest food
consumption options especially when they are unable to quench their hunger with local cuisines
(Catherine, 2014).
Porter’s five force model (Appendices 8)
Every time a new firm wishes to establish itself into international markets, a strategic tool of porter’s
five force model is used which helps the brand get a clear idea about the industry. This helps the firm
work upon its positioning in order to gain a competitive advantage.
Threat of new entrants
For the fast food industry, the threat of new entrants is high and new entrants can surely impact the
market share of Five Guys burgers on a large scale. This is because of three main factors and their level
of impact Firstly, the cost of switching from one brand to another for customers is low and the cost of
capital required to establish a new brand especially in the unorganized sector is low.
Threat of substitution
Substitutes are a major factor adversely impacting Five Guys Burgers’ sales. This is due to the high
number of substitutes available in the market. There are various factors that impact the substitution of a
product. Firstly for the entire fast food industry, there are various substitutes available in the
unorganized department and the cost of switching from one fast food product to another is very low for
consumers. This is why the threat of substitution is very high.
Bargaining power of buyers
The bargaining power of buyers is very strong and largely influences the brand’s sales. This high
bargaining power makes sure that the firm consistently aims to improve customer service and
differentiates itself from its many competitors. The cost of switching from one brand to another is very

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low for a consumer and there are various substitutes available in the market. This makes the bargaining
power of buyers very high.
Bargaining power of suppliers
Five Guys Burgers have loyal suppliers and the greater brand reach and value ensure that. Therefore the
bargaining power of suppliers is much lower. This is also due to a large number of suppliers in the
market and the cost of switching from one supplier to another is very low for the brand.
Industry rivalry
Five Guys Burgers faces tough competition from various fast food joints specially McDonalds, Wendy’s
and burger king who dominate the industry at the moment. The industry competition is very high as
there are a large number of players in the industry. On top of that every firm is putting their best food
forward to leave their mark in the consumer’s minds. The low cost of switching brands from one
consumer to another makes the level of industry rivalry very high.
PESTLE Analysis (Appendices 2)
Political
Fast food industry players are adding healthier options on their menu as the government is actively
discouraging obesity. The healthy menu choices act requires restaurants in certain locations to post the
number of calories for foods and drinks openly.
Economic
High rate of unemployment and increasing inflation are leading to lowered purchasing power among
people. This largely impacts their buying behavior especially for non-necessary food items. Improved
international trade has made it easier for brands to reach out to customers from different countries.
Social
There is a suddenly a massive shift towards healthy eating habits among people. The rise in
vegetarianism, Veganism and demand for gluten free products has also reduced the demand for fast
food. However, the younger generation still considers fast food a necessity and there has not been a

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noted change in their buying patterns. The fast paced lifestyle of people has enabled them to switch to
quick foods.
Technological
The fast food sector which was highly unorganized is now gaining prominence with its increasing reach
and more developed platforms. Players like McDonalds, Five Guys Burgers etc. have no made their
services available on websites and mobile applications which has made it easier for people to order food
and get it delivered on their doorstep.
Legal
The pressure of changing legal requirements has risen over time. Food quantity and nutritive value are
most affected by these laws. Packaging and waste management are also critical to the laws of the state.
Environmental
Changing government rules and regulations have been pressing the brands to adopt a greener approach.
Their waste management needs to be up to the mark and the quality of the food offered must not lack
by any legal or political standard. The food and drug administration has also tightened the rules.

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Internal company analysis: SWOT analysis
SWOT analysis is a management tool performed to throw light on the strengths and weaknesses of the
company which can be controlled by the firm and opportunities and threats existing outside the
company that are not in control of the firm (Appendices 3).
Strengths
The biggest strength of Five Guys Burgers is the strong brand name that exists since 1986. The logo of
the brand is easily recognizable and the firm has ensured that it is depicted clearly on every outlet and
promotional tool (Aaker, 2013). The large number of outlets throughout US and Europe have made the
fast food chain easily accessible which in turn generates higher sales.
Their burgers do not have trans-fat and people have noticed that their bun is eggier than other
competing brands like McDonalds and Wendy’s (Fox News, 2017). One thing that the firm has ensured is
that they pay their employees much higher than industry standards. This was done to create employee
loyalty and instil a sense of ownership.
Weaknesses
The predominant weakness of the firm is its small menu with limited options. The firm tried to expand
the menu but failed and now has stuck to fries and burgers (Five Guys Burgers, 2017). Despite the large
reach, the firm does not spend much on advertising. They barely have any television ads and their social
media marketing is below average.
Unlike other brands, they lack healthier options and with the changing lifestyles and increasing health
consciousness of people, this is a major disadvantage. The reason people prefer fast food is because it
saves time and is a healthy option, however the lack of drive through makes Five Guys Burgers a lesser
preferred option and gives a clear disadvantage for the brand (Seiouseats, 2008).
Opportunities
As given the case study, the brand has plans to expand in Asia. The high population and lesser
competition in the region makes it a perfect opportunity for the brand to expand. They could also

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involve a special and unique menu to attract children who also form a large part of their target market.
Five Guys Burgers could also focus on corporate tie ups to increase sales and reach out to a wider
audience.
Threats
The increasing competition in the industry is the biggest threat posed to Five Guys Burgers
(Smashburger, 2012). The industry is Red Ocean and there are many organized as well as unorganized
players. Also, there are various DeMarketing initiatives taken by the government to throw light on the
increasing obesity of the nation which directly impacts the sales of Five Guys Burgers.
The recent UK budget also symbolizes that there is a fall in wages in real time because the prices are
rising faster than pay (Appendices 9) (The Guardian, 2017). This means that Five Guys Burgers would
have to increase the wages for their employees.

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Potential markets: Japan/India/Singapore/China
12 C analysis (Appendices 7)
Japan
Japan is an Asian country with a population of 127 million and a constitutional monarchy. This indicates
the emperor selects the leader who then governs the nation and there are set of laws which limit the
power of the leader. Yen is the currency of Japan and 1 GBP is equal to 148 Yen. The fast food culture is
well established in the country. However, the average age of the country is very high and the target
market for Five Guys Burger would be the youth. Japan ranks 34 in the ease of doing business according
to World Bank report. This would make opening of a new business much easier and the channels used
for the same could be franchisees.
India
India is a large Asian country with a population of 1.32 billion. They follow a democratic government and
the currency is INR or Indian Rupee. One GBP is equivalent to 86 INR. The country is youthful and has a
wide variety of cultures and local traditions. This is a good country for Five Guys Burgers to expand upon
as the competition here is much lesser and the population is very high. Government control on new
business is minimum and hence it would be easier for the brand to establish a new base.
Singapore
Singapore is predominantly a tourist country. It is comparatively a smaller country with a population of
1.2 million. The currency in circulation is Singapore dollar and one GBP is equal to 1.79 SD. This country
is ranked 2nd on the ease of doing business. The channels of distribution would be franchise as well as
company owned outlets.
China
China is the largest Asian country with the highest population. The currency in circulation is Yuan and 1
GBP is equivalent to 8.7 Yuan. The government control is very high and the country ranks 78th in the ease
of doing business. The large population is a big advantage. However, the high government controls and