Whataburger is a very competitive fast food joint in the Southern United States. Focusing on the opportunities and weaknesses that the organization is subjected to, one can deduce that it is a good business venture. Factors like politics, socio-economics, and technology are the greatest determinant of business operation of a fast food. A slight change in those mentioned above may influence the productivity of the enterprise. Despite the stiff competition that Whataburger faces from other fast food companies like McDonalds and Wimpy, it has managed to maintain its influence on its consumers and target market.
Introduction and Background
Whataburger is a fast food joint in America, and its main branch is based in San Antonio, Texas. Harmon Dobson and Burton Paul founded the company back in 1950. Since then, the restaurant has developed over 780 different Whataburger branches across the Southern United States. The main product brands that the company is well known for are Whataburger, Whataburger Jr, and Justaburger as well as Whatachick. The restaurant provides their customers with a variety of hamburgers because it is their area of specialization. This specialization increases their historical landmark in the fast food industry. WAB Company has focused on improving its market strategy to increase their sales and attract more consumers. Their fundamental obligation of providing quality service is based on their ability to have a sustainable market strategy that can assist the company in doing so (Girnius, 2003).
Macro Environment Analysis
Politics, Rules, and Regulation
Whataburger faces a political and law issue related to the health concern of fast food in America. The US government severely contradicts the question of Americans consuming fast food by claiming they should check on their diet and have a balanced meal. This expectation is considered the greatest weakness of the company. The regulations that control the consumer consumption also control Whataburger’s customer consumption rate, thus affecting their business operations (Yüksel, 2012).
The US economy is a significant challenge to the company whereby with an increase in the inflation rate causes the fast food to lower its prices. This change becomes challenging in keeping up with profit development by the company. In addition, when the inflation rate increases, the company focuses on other cheap alternatives of providing service that lead to a rise in losses being incurred in the business.
Society and Culture
The culture and social lifestyle of Americans has provided the organization with an excellent business opportunity for increasing their market production. Americans’ love for fast foods has become a lifestyle, especially because of their busy lifestyle that makes the population an ideal target for companies like Whataburger. The company benefits hugely from the social-cultural lifestyle of Americans; hence, it increases its profit and sales (Cheyne, Mejia, Nixon, & Dorfman, 2014).
Whataburger has taken a bold step in the use of social media for advertisement of its products and services. This initiative has helped provide the company with an increased market share and increased consumer interest. In addition, the company’s television campaign is strategic in increasing the business’ awareness and market target, which increases sales and profits (Srivastava, 2015).
Opportunities and Threats
Through the socio-cultural lifestyle of its consumers, the company has identified opportunities in the growing demand and new market venues for its products. The company identifies its opportunity through producing new goods and services to their consumer increasing their venture capital
The company’s main weakness arises from the competitition Whataburger faces from other fast-food joints like Wendy’s, McDonald’s, and Burger King among others (Øgaard, Larsen, & Marnburg, 2005). The political rules and regulation are also among weaknesses that the organization faces in its operations.
The chief primary rival of Whataburger is the Steak and Shake fast food company.
To its customers, Whataburger offers high-value price in its product as compared to Steak and Shake. The product value is placed high because of the high quality of service that the company provides
Whataburger’s weakness on its price is that the company does not attract all range of customers because of the high cost of its products and services as compared to Steak and Shake
Whataburger attracts many customers as compared to Steak and Shake. This difference is expressed in the company’s average sales per unit that is higher compared to that of Steak and Shake.
Whataburger does not offer its customers with a variety of services and products. This aspect limits the clients’ opportunities as opposed to Steak and Shake
In Whataburger, the primary product produced is Hamburger that is produced in various varieties with high standard quality making them attractive to their target customers. This strategy contradicts Whataburger’s competitor the Steak and Shake that has similar products to increase competition
Product competition is the greatest weakness that Whataburger faces from its primary competitor the Steak and Shake. This weakness affects the company’s market competition, and consumer interest is divided between the competing companies
The two main secondary competitors of Whataburger are McDonald’s and Burger King. The two companies operate on a larger scale as compared to Whataburger. Their market target is large with a huge target of consumers. In McDonald’s, the company provides a variety of services and products apart from its burger products. The company has more branches all over the world as compared to Whataburger that has its branches distributed only in ten states in America (Min & Min, 2013).
Market and Segmentation
Whataburger serves more than three hundred communities throughout the Southern United States. It serves the population stretching in most states from Arizona, Florida, and Georgia (De Vogli, Kouvonen & Gimeno, 2014). Among the target customers are American citizens, and the population is mixed. The company targets children, families, and working class population where its oints are located.
Target Market Analysis
Whataburger considers growth in its brand and product advertisement to attract a huge consumer market. Moreover, the company promotes its market using social networking through connecting with its target customers. More than 780 branches in America are strategically situated to provide a viable market opportunity for the company (Austin et al., 2005).
Target Market Segmentation
The company, being one of the largest hamburger market chains in America, has a market segmentation that is divided among three distinct groups - children who enjoy their Whataburger Jr, the lower-middle income class living in the Southern United States, and the American traditional burger enthusiasm as the main target market.
Marketing Mix Strategies
The company has developed various marketing strategies to improve its product innovation and competition in the fast food industry. It has tailored its products to fit into the current market mixture to enhance productivity (Goi, 2009).
The company has introduced new products to increase their sales and customer target such as Nickel Mug Promotion, WhatChick’n, and the taquitos as well as Breakfast on a Bun. The products were introduced into the menu to tailor diversity based on the needs of the consumers (Mattsson & Helmersson, 2007). These new products assisted the company to adapt to the fast changing market competition to compete effectively.
Current Product Strategy
Whataburger has developed and adopted a dynamic and competitive mode of product development to maintain the company ahead of its competitors. This startegy followed the reintroduction of itsr Monterey Melt Burger in the menu that was considered an all time favorite among its famous items on the menu.
Recommended Product Strategy
With the fast changing socio-economic state of the country, it would be more appropriate if Whataburger adopted a new line of products that prioritizes the health of their consumers. The concern of what people consume is growing, and it would be advisable if the company took considerable measures to produce sensitive health products such as more fruits than meat.
The first Whataburger cost $0.25. Over time, the price has been increased to compete with the changing economic state of the country and the high demand of the customers. With the rise in market competition, the price of the product is affected causing either a drop or increase.
Current Price Strategy
The present price of a Whataburger has increased to five dollars. Other products have also increased in their price value to adapt to the changing market competition. The value of a Whatachick’n is high compared to that of a Whataburger due to its demand and value among the customers
Recommended Price Strategy
The company should adopt a psychological market pricing strategy that is meant to address the customers’ interest and, at the same time, be sensitive to the changes in the market environment. This approach will assist in avoiding high product price that can be termed unfavorable to their customers.
Current Promotion Strategy
The company introduced the delicious new Sweet & Spicy Bacon Burger for a limited time. The burger came with an ideal balance of flavor that was unique to the consumers. In addition, the company introduced its original Pancake Mix to it various retail stores.
Recommended Promotion Strategy
With the increased competition among the fast foods that gain popularity among the many American consumers, the most recommended promotion strategy to consider is scheduled promotional tours.
The company receives its revenue from over 780 restaurant joints located in more than three hundred cities in the United States. This strategic position of the company offers a wide array of consumers and target market.
Recommended Place Strategy
It is recommended that the organization goes global to increase its influence and impact on a broader scope. The company should have branches from different countries like its competitor McDonald’s.