GimmeaBurger Business Startup Analysis

A new company called GimmeaBurger

A new company called GimmeaBurger focuses on providing a selection of premium meats and burgers. The Bacon Coffee Burger, Wow Burger, French Onion Burger, and Mediterranean Burger are a few of the company’s best products.

Competition in the fast-food market

In particular, the burger segment of the fast-food market is highly competitive. The industry is dominated by a small number of businesses, including, among others, McDonald’s, Burger King, and Wendy’s. GimmeaBurger thus faces competition from these large corporations as well as from other minor participants in the market who have recently grown to be highly important. The business needs to deal with a number of challenges and have a strong sales and marketing plan to stay competitive.

Intense competition in the fast-food industry

The fast-food industry, especially the hamburgers sector, is intensely competitive, and GimmeaBurger competes against several well-established enterprises. Competition in the industry is usually about product quality, choice, service, affordability, and location (Sena). The sector also consists of very few entry barriers, a factor that has immensely contributed to the intense competition. Consequently, GimmeaBurger’s competitor base is large, incorporating individual restaurants and restaurant chains, as well as international restaurant corporations.

Main competitors

Key among the significant industry competitors include the three dominant restaurant companies, and others such as Five Guys Burger and Fries, and Smashburger. Regional competitors that GimmeaBurger faces include restaurant chains such as Sonic, Jack in the Box and Carl’s Jr. GimmeaBurger also faces a lot of competition from local, regional and national Quick Service Restaurants (QSRs), which offer a variety of menus, fast and casual restaurants, grocery stores, and convenience stores.

Challenges of competing against well-established rivals

A multitude of GimmeaBurger competitors has considerably greater financial and other forms of resources. Consequently, they are better positioned to respond to market dynamics such as changes in demand and prices. Such companies also have a higher capacity to react to or engage in more aggressive promotions and marketing than GimmeaBurger. Intensifying competition in the industry enhances the challenge of operating and attaining desired margins and other results.

Competitive strategies for differentiation

GimmeaBurger should realize that it will compete against a wide range of rivals in the industry, from the large chicken and burger chains to small chips, fish shops, home orders, and take-out enterprises. Therefore, the company must establish competitive strategies that will foster differentiation from rivals. The business management should remain up to date with the environment to ensure that the burger offerings fit with the customer needs and expectations. This is since customer demands change across regions and over time. Moreover, the fast food industry is becoming increasingly competitive and hence the need for a comprehensive sales and marketing strategy. An overview of the hamburger industry competitiveness indicates tremendous changes taking place, with entrepreneurs finding innovative means of turning their customers not only into customers but also loyal fanatics.

Market Attractiveness

The foodservice market, particularly in the US, is currently manifesting strong growth despite the recent economic downturn hence making it a beautiful venture (Sena). In the US, the quick service restaurants constitute the most significant market segment in the foodservice industry. The restaurant sector has witnessed continuous and consistent growth in terms of sales for the past few years. Furthermore, industry sources indicate that the overall foodservice industry sales will exceed $680 billion by the end of 2017, registering a growth of 3.6% over the past year (MarketLine 4).

Prime category in the quick-service restaurants segment

The industry growth has been ascribed to the recent stronger economic progress in the US, coupled with the increase in customers’ demand in the past several years (Sean). Quick service restaurants coupled with social caterers are expected to drive the growth of the industry, mainly through commercial restaurants. The fast-food burger restaurants sector is the prime category in the quick service restaurants segment (MarketLine 4). GimmeaBurger will operate in the fast food restaurant segment of the quick-service restaurant’s industry. Upon the development of an efficient and robust marketing and sales strategy, the business can be positioned to leverage and exploit the growing fast service restaurant segment particularly in the US and boost its extensive and top line offerings as well as profitability.

Porter’s five forces model

Porter’s five forces model encompassing negotiating power of contractors, bargaining power of clients, the threat of additional products, the degree of competitiveness among competitors, and the risk of new applicants provide a more comprehensive view of the industry attractiveness (Porter 80).

Substitute products and threat of new entrants

Regarding substitute products, there are numerous alternatives to burgers in the industry sector, including home cooking and excellent dining restaurants. The substitutes are also excellent in terms of quality, cost, and taste. The threat of new entrants is moderate, considering that low switching costs make it easy for customers to opt for other burger providers, but the providers might encounter challenges in entry costs. The bargaining power of industry suppliers is, however, weak since there are numerous suppliers and their degree of forwarding integration is low, making them have little control over the market. Overall, the industry is moderately attractive for venturing, but proper strategic planning can increase the likelihood of success.

Sales and Marketing Strategy

The industry competitiveness and attractiveness make it apparent that GimmeaBurger must employ a sales and marketing strategy capable of eliciting immediate product purchases. In addition, customer loyalty must be acquired to ensure the future success of the business. Dastidar postulates that for an effective sales and marketing strategy, it is essential that marketers comprehend the response of consumers to various approaches within that product category (7). The policy of GimmeaBurger should be further based on Porter’s model of overcoming competition in the industry, particularly those of product differentiation, focus, cost leadership, and low cost (Ormanidhi & Stringa 55). The approach should enable the company sales and marketing strategy to create a competitive edge in the burger industry.

Focusing on every customer group

The primary approach GimmeaBurger should be a strategy focusing on every customer group, instead of a particular niche. The company should first address the aspect of value. Although the offerings are unique and tasty, it is essential that as many customers as possible afford the burgers. Offering burgers at reasonable prices such as in the price range of 1-3$ can even double the company sales, as opposed to focusing on a small market population, considering the high level of competition.

Diversified approach and small restaurant designs

The company should also employ a diversified approach in relation to the burgers offered. Instead of focusing on the Bacon Coffee Burger, Wow Burger, French Onion Burger, and Mediterranean Burger offerings only, GimmeaBurger can tap into a broader market by offering other products such as cappuccinos, paninis, salads, fizzy drinks, and fries among others. As part of the strategy, GimmeaBurger should also develop small restaurant designs that will not only minimize the level of capital investment needed but also address consumers’ preference for the drive-thru to dine-ins. MarketLine indicates that the bulk of current sales made by US company restaurants are done in drive-thru settings (5). The advantage of the smaller settings is that they significantly cut down the costs of building or leasing burger outlets or restaurants.

Site-sharing and co-branding program

GimmeaBurger should also pursue a site-sharing and co-branding program to minimize the initial investment expense. The business should also have in place a plan for reducing uncertainty and time associated with new developments. GimmeaBurger can also enter into joint ventures with several franchisees to facilitate the establishment of the brand across states. The strategy should prove useful in case of a capacity and desire to expand the business globally in the future.

Innovative advertising and marketing campaigns

Innovative advertising and marketing campaigns should enhance the business’s visibility. GimmeaBurger must utilize innovative advertising, marketing, and sponsorships to generate traffic at the various burger outlets and restaurants, and also enhance sales. The business can begin by creative and innovative advertising initiatives, such as Get Yourself a GimmeaBurger. The campaign can involve offering a free burger to individuals who manage to convince at least two of their friends on the social networking site Facebook to visit the company’s restaurants or order a burger.

Reaching out through entertaining events

Additionally, GimmeaBurger must reach out to a variety of restaurant guests using entertaining events such as Game of Thrones and other favorite sporting events. The company can partner with famous sporting companies and socially responsible initiatives to promote the brand. Overall, innovative and robust marketing campaigns must enhance the company’s visibility, leading to growth in sales volume and a competitive edge against industry rivals.

Works Cited

Dastidar, Surajit Ghosh. “An Evaluation of Consumers’ Deal-Specific Response to Sales Promotions Based on Their Product Involvement.” IUP Journal of Marketing Management, vol. 16, no.2, 2017, pp.7-26.

MarketLine. Company Profile: Burger King Worldwide, Inc. SWOT Analysis. EbscoHost, http://web.a.ebscohost.com/bsi/pdfviewer/pdfviewer?vid=0&sid=a244cf59-9590-4b4a-ab49-3925d8712f81%40sessionmgr4010. Accessed 16 October 2017.

Ormanidhi, Orges and Stringa, Omer. ”Porter’s Model of Generic Competitive Strategies.” Business Economics, vol. 43, no.3, 2008, pp.55-64.

Porter, Michael E. ”The Five Competitive Forces That Shape Strategy.” Harvard Business Review. vol. 86, no.1, 2008, pp.78-93.

Sena, Matt. Burger Industry Analysis 2017 - Cost & Trends: Burger Industry In 2017 At Glance. Franchise Help, www.franchisehelp.com/industry-reports/burger-industry-report/. Accessed 16 October 2017.