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In-N-Out Burger is an American regional chain of fast food restaurants, founded in Baldwin Park, California, in 1948 by Harry and Esther Snyder. In N Out is known not only for their very select burgers and menu but also their quality of meat and freshness of ingredients. Throughout our report, we demonstrate a SWOT and PESTEL analysis and answer questions such as; Level of competition, strength's In N Out can use to leverage expansion in Australia, etc.

Although In N Out is extremely successful in the US, In N Out is quite a simple business that is still privately owned and non franchisable.

What is the level of competition in the Australian market?

• In N Out, one of the biggest, high rated and dominant fast food chains in America have decided to branch into the Australian market. Although In N Out is very popular in America with over 350+ stores, can they compete with the big names already established in the Australian market?
• The Fast Food industry in Australia is worth almost $21B and is expecting modest growth of less than 1% over the next 5 years. The market size of the Fast Food and Takeaway Food Services industry in Australia has grown 0.2% per year on average between 2017 and 2022. This is thanks to itsversatile array of powerful figures in the fast food industry in its market. This includes
  • Subway. With over 1200+ Stores and branches covering australia. Its Low start-up fees coupled with minimal time of training enables Subway to multiply as it is cost effective, efficient and deemed as a healthy option for fast food. The initial fee of $25,000 to franchise and an investment of $300K, makes this a very affordable start up. As it only takes 2 weeks of training to have employees independent and efficient, business owners can rest assured they can meet demand quite efficiently and quickly with Subways training program. This means In N Out should be in favor of having start-up costs and training programs on par with Australia's leading fast food chain in order to assert a place in its market.
  • McDondalds. This Australian favorite has over 970 locations in Australia. As In N Out have very similar types of food such as burgers, In N Out must compete with Mcdondalds level of output, notoriety and consistency of its food to establish their place in Australia's market. In N Out could take advantage of Mcdonald's high start up costs and long training programs however will struggle to compete in the real estate department and converting loyal Mcdonalds consumers to eat at their food chains.
  • KFC. With 700+ locations across Australia and having highly effective national campaigns for marketing, KFC is a key figure in Australia's fast food competition. KFC's big social media presence, its smart marketing ventures of sports promo codes will present a big challenge yet again for In N Out to compete with.
  • Other key players are; Dominos, red rooster and hungry jacks.
• With In N Outs inability to go public and refusal to franchise, it will struggle to compete within the Australian market. Thus Australia's level of competition within the fast food industry is strong and intensely competitive, which In N Out will find difficult to enter.

Is there a place for In-n-Out Burger in Australia, and if so, where?

The Australian fast food burger industry has a place for In-n-Out Burger due to the lack of an American burger themed restaurant chain. The consumer demand for high quality burgers is currently matched by smaller burger chains such as Grill'd and countless independent burger restaurants. There is also a growing trend of deviativing from the traditional burger such as 'brunch burgers' and the healthier plant based burger. The main competitors McDonald's and Hungry Jack's currently only fulfil the health trend, leaving the brunch burgers to be dominated by businesses that don't specialise in burgers, like cafes and coffee shops. In-n-Out can capitalise on these opportunities to establish a strong presence in the Australian market by attending to these unique trends by bringing over its domestic menu as well as additions that cater to locals, like a plant based brunch burger. The Australian burger market as a whole is generally profitable at 8.4% (Cloutman, 2021) and would be a wasted opportunity if In-n-Out doesn't enter, as it is currently in a mature phase in the industry life cycle and premium pricing is generally tolerated by consumers (Cloutman, 2021). Tastes and trends of the past couple of years have generally eased and the introduction of delivery services during the covid period have allowed for an easier entry. Much like its competitors, In-n-Out should situate its locations in CBDs and other major urban centres along the coast as these areas are highly concentrated and are influenced by the current consumer trends. Urban and city areas also facilitate the drive-thru aspect as well as delivery services.

What strengths does In-n-Out Burger bring that it can leverage to expand in Australia?

• In N Out can leverage its reputable name and brand into australia. Due to In N Outs positive reputation over in the states, commonly said that In N Out have the best burgers. They can leverage this to the Australian customers and present it as a proof of concept, hence attracting the attention of consumers to see if the hype is real and worth it.
• A pop up shop. They have already tested market interest with its pop up shop in Australia, specifically in Sydney and Melbourne. This enabled In N Out to gauge and experiment on:
  • Pricing, Australian consumer likes and dislikes, what demographic was eating their burger, how successful was marketing to attract customers etc. This can lead to a better entry into the Aus market by Analyzing the results of the pop up to then Integrate and adapting its brand and food to australia culture. This can be through changing its menu, its customer service, how they market themselves etc.
• Family owned business. In N Out can leverage its title of family owned business through marketing as Australia loves family owned, local/small type businesses. If they present themselves as a family type of business that still have those grounded morals, old school repcies, etc. The Australian market will respond in a positive way and will likely buy into the hype, hence purchasing their food.
• Higher Salaries. In America In N Out pays a higher salary and wage to its employees compared to other fast food chains. This can be used to leverage new employees to work at In N Out or steal already highly trained employees/managers/supervisors from other fast food chains in Australia. Thus, could be used to enable a smoother transition into the Australian market, establish a position in its competition as fast and efficiently as possible.
• In N Out have quirks such as their publicized "secret menu". As most major Australian fast food chains don't have anything remotely similar to this. It could be used as a selling point and leverage for hype due to the lack of other Australian fast food chains not having something like this. If marketed correctly they can use its individuality and uniqueness to build up hype and cause word of mouth, ultimately benefiting In N Out.

What weaknesses must they address?

• In N Out only do radio commercials. Have Not advertised a TV commercial since 1987,
• In N Out have and will be out ratios by its competitors.
• Not much variety in food. 3 main burgers
• Known for a slower service compared to other fast food chains
• Must establish a global presence of their chain and products, as the only stores of it are in the US
• Insufficient budget for the marketing and promotion activities weakens the firms' ability to expand the customer base and encourage repeat purchase.
• Supposed decision making deficiencies at In-N-Out takes too much time, causing expensive delays in introducing new products in the market
• The prices charged by the business may not be perceived as justified when compared to the product/service characteristics. It indicates the need to revise the pricing strategy.

In and Out and their understanding of Australian Economic and Political effects on the Burger Industry.

Australia is a large continent spanning over 7.6 million km2 with an estimated population of 2 5.5 million people, 85% of which live in urban areas and close to cities (Worldometers., 2020). Whilst the land is vast, most of the population live in developed city areas that are located in small parts of the continent when compared to its size. ABS (2022, August) reported that 13,592,100 million Australians, a change of 33,500 people from the month prior, as well as the lowest unemployment rate in the last decade at 3.4% (p.3). This shows that the Australian job market is on the move from the effects of the Global Pandemic as well as that Australia has a large workforce that is ready to be employed by new companies such as In and Out in the fast food burger industry. As mentioned before, the Australian fast food burger industry's major players are Mcdonalds holding a market share of 48.8% and Hungry Jacks with 20.5% market share, the rest are mostly independent, niche, or specialty specific restaurants that find a unique corner of the market as they cannot compete with the economics of scale and branding power the two major players have (Cloutman, 2021). Additionally, Mcdonald's revenue from 2020-2021 was $8.854B, cementing themselves as the leader of the Australian Burger industry and is only projected to grow in the next five years (Cloutman, 2021). Moreover, the Australian population is facing a crisis of obesity with 67% of Australia's reported to be obease (36% clinically obease and 31% close to being obease) in 2017 from the Australian Bureau of Statistic's National Health Survey (Hunt, 2017). Therefore in the last 5 years the Government has implemented health incentives, policies, legislations and regulations that has been the driving trend of healthy eating in Australia. As such, the Australia food industry must be subjected to strict food health and safety legislations which include the main three in NSW of the Australian New Zealand Food Standards Code, the Food Act 2003 (NSW), and the Food Regulation 2015 (Foodauthority, 2022). In an Out will have to adhere to these standards of food regulation and may have to change or alter certain menu items to be befitting in Australia.

In and Out and their Technological effects on the Burger Industry?

• Use of social media has become common in a modern business environment. In-N-Out Burger. can leverage the opportunities offered by social media marketing to improve business performance. Technological trends can be used to start the creative social media campaigns for developing online brand communities.
• Consider the investments made by competitors on a micro and macro level to understand how new technologies influence the firm's value chain and prevailing cost structure. Research and development activities are highly important in an environment characterized by creative disruption. In such an environment, In-N-Out Burger. should invest in disruptive technologies to maximize the profits and re-invest the profits for future disruptive technologies.
• Technological innovation rate and development can affect the overall market and industry. By studying the emerging technological innovation trends, In-N-Out Burger will be able to understand the new product development rate, product life cycle length, and innovative features being mostly liked by consumers.
• Research into consumers' attitudes towards emerging innovative digital technologies can help In-N-Out Burger in understanding whether shifting to e-commerce will benefit more than opening a physical outlet. Competitors' investment in automation technologies to reduce costs can compel the In-N-Out Burger to shift from manual to automated procedures, particularly when people in general in that particular society are tech-savvy.
• By investing in the right technological innovations, In-N-Out Burger can optimize the user experience, achieve operational efficiencies, and position itself as an innovative organization.