Strategic Management Report: Analyzing Hungry Jack's Strategies

This report provides a strategic analysis of Hungry Jack's, examining its market position, financial performance, and strategic options within the competitive fast-food industry. The analysis begins with an executive summary that outlines the report's purpose and key findings. It then delves into market trends, highlighting the shift towards vegan fast food and the increasing obesity rates as key external factors. The report assesses Hungry Jack's financial performance, noting revenue trends and profit fluctuations, and identifies key issues such as increased expenses and competition. Strategic options, including corporate-level strategies like mergers and acquisitions and innovation strategies like product adaptation, are discussed. Business-level strategies such as cost leadership, product diversification, service orientation, and healthy lifestyle product offerings are also explored. The recommended strategy involves a combination of merger and acquisition for expansion and a focus on healthy lifestyle products and cost leadership at the business level. Implementation steps and monitoring methods are also addressed to ensure the success of the recommended strategies.

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STRATEGIC MANAGEMENT
6/19/2019
Student name

STRATEGIC MANAGEMENT 1
Executive Summary
The report’s purpose was to analyse the appropriate strategy for Hungry Jack’s after assessing
the external environment of the company. Hungry Jack’s is the Australian brand, conducting
business in one of the competitive industry that is the food chain industry. From the study, it was
observed that the market trends are found to be shifting towards vegan fast food. This can also be
said through analysing the search engine searches “vegan” at the highest percentage globally in
2018. In addition, the increasing obesity rate in the nation could cause a dynamic change in
market trends in the industry and for hungry jacks. This was the major reason identified for
decreased financial performance of the company.
There is a various recommended strategic option that hungry jacks could implement Merger and
acquisition as corporate level strategies and Innovation strategy that would include product
adaption strategy. Business level strategies include cost leadership strategy, diversification in
product mix, service orientation, and healthy lifestyle trends products. The recommended
strategy among the strategic option discussed in the previous section includes the integration of
some of the options. The most appropriate strategy for the company includes the expansion
strategy through merger and acquisitions as the corporate level strategy. In addition, considering
the business level strategies, the recommended strategy for international strategy would include
Healthy lifestyle trends products and cost leadership strategy.

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Contents
Executive Summary.........................................................................................................................1
Market Size &Trends.......................................................................................................................3
Financial and Corporate Performance.............................................................................................5
Strategic Options.............................................................................................................................6
Final Recommended Strategy........................................................................................................10
Implementation of Final Strategy..................................................................................................11
Monitoring and Control of Future Performance............................................................................12
References......................................................................................................................................14

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Market Size &Trends
As per the statistics of March 2018, the market size of Australian fast food industry tends to
grow to fast pace. From the graph below, it can be said that most visited restaurant that Aussies
have been visited in 2017-2018 was MC Donald’s, and Hungry Jacks’ is at fourth position with
29 percent of total visitors. This represents the increasing interest of the fast food chain in the
Australian market (roymorgan, 2019).
Figure 1: (Source: (roymorgan, 2019)
From the study, it was observed that the market trends are found to be shifting towards vegan
fast food. This can also be said through analysing the search engine searches “vegan” at the
highest percentage globally in 2018 (vegconomist, hungryjacks, 2019). This was the reason that

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hungry jack’s and other competitors of the brand introduced the various vegan option to their
menu to work as per the changing market trends like a vegan cheeseburger, vegan mayonnaise,
and vegan cheese. This reflects that from the organization market the shift to vegan has been
observed which must be considered while strategizing for Hungry Jack’s (vegconomist, market-
and-trends/australia-major-market-increase-in-vegan-fast-food, 2019).
Figure 2: (Source: (mordorintelligence, 2019)
However, the increasing obesity rate in the nation could cause a dynamic change in market
trends in the industry and for hungry jacks.

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Financial and Corporate Performance
Figure 3: Revenue of Burger King worldwide from 2004 to 2018 (in billion U.S. dollars) (Source: (statista, 2019)
Hungry Jacks are the subsidiary company of Burger king shown a key drop down of the revenue
in year 2014 that was eventually increased and it was 1.65 billion dollars in 2018 (statista, 2019).
This reflects a change in customer preference of any strategic issues of the company that has led
to a decrease in profits. As already discussed in the previous section, the market trends seem to
be changed and the decreased obesity rate has reduced the demand for fast food chains
(Jaworski, 2018).
As per the report in 2018, it was reported that the profit of the company suffered to a large extent
by dropping the profit. As per the 2017-18 annual report and financial performance of Hungry
jacks the profit after tax was shown to be down a large size that is seventy-five percent that is
from 30.5 million dollars to 7.5 million dollars. This reflects the lower financial performance of
the company. The key issue that was identified for hungry jacks includes an increase in expenses

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of the company that has decreased the profit margins of the company. For instance, the loss from
the supermarket has incurred the cost of ten million and the goodwill impairment cost to be 2.5
million dollars. Moreover, the company incurred double expenses due to business head office
shifted from Perth to a new location that is Sydney. Moreover, the company has spent twenty
million dollars over a system introduced that is the point of sale. Moreover, the previous
technology was written off that also increased the cost to the company by 9.2 million dollars
from the bottom line. Moreover, the cost for day to day expensed was also observed to be
increased due to raising at electricity prices, utility rates raised, and the rent rates were also hiked
from 98 million dollars, o 116 million dollar (Doole & Lowe, 2008).
Another major cause identified for the decrease in the revenue was an increase in serious
competition from Mr. Cowin’s and Domino's pizza. This reflects that the customer was not
retained and switch to other brands for the similar product range (globalnegotiator, 2019).
Strategic Options
There is a various recommended strategic option that hungry jacks could implement and can gain
competitive advantage and increase the revenue and profitability of the company lead towards
the growth of the company.
A. Corporate level strategy
Corporate level strategies are the top-level strategies that are generally created by top level
executives of the company.
1. Merger and acquisition

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International expansion is the weaker aspect identified for Hungry Jacks. It has been observed
that the company has faced various political issues when it comes to some of the nations like
China and India. However, burger king has expanded to these nations but hungry jacks need to
expand the business in other nations other than Australia. This will not only increase brand
recognition but will also help the company to gain the opportunity to earn revenue and increase.
The recommended way to enter into the international market would be through mergers and
acquisition. Entering into international marketing is the challenge for the company, which can be
implemented through merger method in order to avoid political issues and permission to enter
into the nation. The merger includes the integration of the brand with other local company in the
target or host nation. This could either by purchasing all the shares of the company or exchange
of the shares between the two companies (Baker & Bowen, 2015).
2. Innovation strategy - product adaption strategy
Another appropriate strategic option for hungry jacks included innovative strategy. The cultural
difference in every nation is the major risk that could hamper the performance of the company in
international marketing. In the case of hungry jacks, the food and beverage industry has great
relevance with the taste preference of the customers, the religion of the nation, customs and
values. For instance, one of the major mistake by Mc Donald’s while entering into the Indian
market was to add Beef in the menu, where according to their religion cow are considered to be
respected and cow killing or cow meat is against the norms of their religion. Therefore, Hungry
jack’s is recommended to adapt the product as per the local taste preference in which nation the
company is conducting business. Moreover, the innovative strategy of the company would

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include technological innovation, this included the use of updated technology to enhance the
customer experience and decrease the manual or labour cost to the company. For example,
digitalization could been implemented and promoted to a large extent to decrease the cost of
fixed assets (Bruns, 2013). Some additional innovative strategies could be
 Separate vegan menu and outlets – It has been identified that the vegan products are more
in demand as per the changing trends. This reflects the opportunity for the company to
enhance the menu. The company can include a separate vegan menu that would include a
large number of product list that is vegan. This could also include by introducing vegan
friendly outlets that would include 80 % of vegan products except for 20% option for
non-vegans to keep the outlet agile (Betton, 2017).
B. Business level strategies
Business level strategies include the strategies that are to manage a business, are created by top
level management and divisional level managers, and would be integrating corporate level
strategy for the implementation purpose (Chari & Feng, 2018). The recommended strategy for
hungry jacks include an international strategy that includes
1. Cost leadership strategy – Considering the top five alternative business level strategies,
the most appropriate strategy would include the cost leadership strategy. The company
current strategy include the lower cost products makes the cost leadership strategy to be
included as the part of international strategy that is being the cost leader in the
international market (Rialp & Rialp, 2007)

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Figure 4: Business level strategies (Source: (albany, 2019)
2. Diversification in product mix
Another suitable international strategy for hungry jacks included the product
differentiation strategy. The company has majorly focused over burgers and related
product. The company can widen the product mix to gain a competitive advantage. For
instance, other than including vegan products the company can increase the product
variety by including a range of wraps, pizza, and localized product range. His would
include attracting the local customers in the international market (Saunila, 2016).
3. Service orientation
The company has yet been focused over product orientation; the suitable strategy would
include the shift for product orientation to a service orientation. The customers majorly
prefer to go to a restaurant instead of the fast food chains due to service provided by the
restaurants and other hotel services. This is one of the reasons that the company is unable
to attract the customer and retain the existing customers. To enhance the opportunity and
enhance customer retention, a suitable strategy would be to make the brand service

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oriented like online delivery, good ambiance, enhance the customer outlet visit (Judith &
Steven, 2002).
4. Healthy lifestyle trends products
This one of the major challenges that the fast food industry is facing that is an increase in
obesity and increased customer awareness regarding the health issue and need for a shift
to healthy food options. Therefore this would the suitable strategy for hungry jacks that is
introducing healthy, organic, product option in the menu to attract the health conscious
customer segment. This would also enhance the customer perception regarding the brand
and will improve the brand’s goodwill (Solman, 2017).
Final Recommended Strategy
The recommended strategy among the strategic option discussed in the previous section includes
the integration of some of the options. For instance, the most appropriate strategy for the
company includes the expansion strategy through merger and acquisitions as the corporate level
strategy. This is to increase the growth opportunity for the company, as the company has been
limited to conduct business in the Australian region. Moreover, considering the business level
strategies, the recommended strategy for international strategy would include Healthy lifestyle
trends products and cost leadership strategy. One of the major issues faced by the company
included an increase in expense of the company, thus the company is recommended to

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implement cost management strategies and gain cost leadership in the international market. This
would support the company to enhance its competitive advantage over its closest competitors
like Mc Donald’s. Moreover, another issue identified from situation analysis is health concern
are increased in the customers which have decreased the hungry junks sales and other fast food
companies, especially in western nations. The healthy product option would help the company to
target other customer segment as well that is the old age, health concern customers, and obese
population to a greater extent. This could also include the increased beverage options like green
tea, ice tea, sugar free beverages and similar range (Robson & Zeriti, 2014).
Implementation of Final Strategy
The strategy recommended to hungry jacks’ would be of no use if not implemented appropriately
and in a structured manner. This included stages of strategy implementation
1. Definition of strategy framework
This would include the integration of company goals, and objective to the strategy
formulated. Hungry jacks need to consider the vision of the company before going
international or expand the business.
2. Plan formation
This stage includes hungry jacks to plan the way to go international and structure the
actions to be taken at the business level. This would include investment planning like
placing the company’s outlets, assessing the external environment of the host nation.
Another action would include business management planning (Schlegelmilch, 2016).
3. Key performance indicators