Strategic Management Report: Sonic Corporation's External Analysis

This report provides a strategic analysis of Sonic Corporation, examining its external environment, including sustainability issues, societal factors, and the competitive task environment. It presents a SWOT analysis, summarizing opportunities and threats. The report then delves into the analysis of strategic factors, including a situational analysis and a review of the company's mission and objectives. The analysis highlights key factors like economic integration, the trend of superstores, and the impact of competitors such as McDonald's and Burger King. The report concludes by assessing the company's current mission and objectives in light of changing consumer preferences and the competitive landscape, offering insights into potential strategic adjustments for future growth and profitability.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

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Table of Contents
III. External Environment: Opportunities and Threats (SWOT)...............................................2
A. Natural Physical Environment: Sustainability Issues........................................................2
B. Societal Environment........................................................................................................2
C. Task Environment.............................................................................................................3
D. Summary of External Factors............................................................................................4
V. Analysis of Strategic Factors.................................................................................................4
A. Situational Analysis...........................................................................................................4
B. Review of Mission and Objectives....................................................................................5
References..................................................................................................................................6

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III. External Environment: Opportunities and Threats (SWOT)
A. Natural Physical Environment: Sustainability Issues
The Sonic Corporation is a restaurant serving all types of meals but it functions the
best in those areas where the climate is particularly warmer in nature in order to ensure
considerable success with respect to the preparation of the meals and other substitutes.
Moreover, it is crucial that the design of the building is in adherence to the weather of the
place whereby the weather of the building has a key role to play in the overall operations of
the firm (Kotabe and Helsen 2014). If the design of the Sonic Corporations had not been
designed in the right manner, then this would have causes problems with respect to the
expansion of the firm at large as the warm climate would have had a huge impact and the
weather would have caused barriers with respect to the overall expansion of the firm.
Hence Sonic has to ensure that in order to combat against these environmental and
weather barriers, it designs its buildings in an appropriate manner and in lieu of this, and
Sonic has begun building some of its restaurants with larger emphasis on the drive thru
design (Marshall 2014). This helps it to cut down on the operational costs of the firm. In
addition to this, Sonic has been successfully possible in cutting down around 15-20% of the
operating costs through its robust design.
B. Societal Environment
There are different kinds of natural disasters which can affect the overall growth of
the restaurant in a negative manner. The health consciousness is one of the major issues
which is being faced by the Sonic drive in restaurant in a negative manner which will be
creating negative impact which can hit Sonic in an ineffective manner (Doz 2017). As there
are different individuals in the society are now more health-consciousness in nature as they

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do not prefer the fast food as much as we want in nature. While, this can help in analysing the
profit margin, this can be taken as the opportunity for the drive-in restaurant. Sonic drive-in
restaurant can add on to the different health consciousness aspects to their menu which will
help them in bringing more customers which would increase the overall sales of the company
in a positive manner (Hitt and Duane Ireland 2017).
C. Task Environment
The external environment of the business is very competitive in nature, and it
comprises of the given factor which will then go a long way in ensuring that the firm is
successful in the long run. The different factors are as follows:
Threat of new entrants- Moderate
The threat of the new entrants can be taken to be relatively moderate in nature
whereby the different members as present in the environment have taken up considerable
market share which allows them to perform well.
Bargaining Power of the buyers-High
The power of buyers is taken to be high because they have an access to a large
number of options in terms of the restaurants.
Bargaining Power of the suppliers-LOW
The bargaining power of the suppliers is comparatively low because the company has
a large market share (Chernev 2018).
Competitive Rivalry-High
The competitive rivalry is very high.

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Threat of substitutes-Moderate
The threat of substitution is taken to be comparatively moderate because there does
not exist much substitution to the food offered by the restaurant.
The key factors which will have a strong impact on the performance of the company
are its competitors. The competitors are Mc Donald`s, Subway, Starbucks, Wendy`s and
Burger King as well.
D. Summary of External Factors
From the table, this can be summarised that there are different kinds of opportunities
such as economic integration of European community wherein the weight is 0.20 and the
rating is efficient in nature which can be done through acquisition of the power. On the other
hand, there is growth of the different new products which can affect the overall efficiency of
the respective restaurant which will be ineffective for the growth of the firm which will be
weak globally (Lasserre 2017).
Furthermore, the other opportunity is relating to the economic development of Asian
countries which can be beneficial for the overall growth of the firm in a positive manner. The
trend of the super stores is the other aspect which can be taken as the opportunity which will
take tome in maintaining the quality of the products in an appropriate manner.
V. Analysis of Strategic Factors
A. Situational Analysis
From the given analysis, it can be rightfully stated that, the factors which are most
crucial to the firm`s successful are he factors which are relating to the Economic integration
of the European community (Malhotra and Peterson 2014). The European Community is a
very crucial market and for this reason, it is important that Sonic expands its operations to

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other parts of the globe as well. Other than this, it is also crucial for the business to consider
factors like Trend of the super stores.
In the future, the factors which will be very crucial to the company are factors like the factors
that Whirlpool and Electrolux are strong globally,
B. Review of Mission and Objectives
From the case study, this can be analysed that the current mission of the respective
restaurant is to provide the different customers with the different types of tasty food which
will be the main objective for gaining success in the competitive market. However, on the
other hand, the increase in the profitability has been reduced to a huge extent as the eating
preferences of the customers have changed and this influenced the overall effectiveness of the
organization negatively as well.
There are other competitors in the market who went to the other competitors which
are competitive in nature and serve with the health consciousness foods. The objectives are
well-established which promoted the different other choice of foods which will be essential
for the growth of the organization. In future, the restaurant can increase the overall efficiency
which will be beneficial for the overall growth of the firm in comparison to the other
competitors (Hill, Jones and Schilling 2017).

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References
Chernev, A., 2018. Strategic marketing management. Cerebellum Press.
Doz, Y.L., 2017. Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Kotabe, M. and Helsen, K., 2014. Global marketing management. Pearson.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Malhotra, N.K. and Peterson, M., 2014. Basic marketing research. Pearson.
Marshall, G., 2014. Marketing management. McGraw-Hill Higher Education.