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In a world of giants, A&W has managed to survive and at times thrive in the highly competitive fast food market. The company started in
In a world of giants, A&W has managed to survive and at times thrive in the highly competitive fast food market. The company started in in California, and grew slowly for the next few decades, finally arriving in Canada in with a restaurant in Winnipeg.The company did not start out in Canada on the mean streets of the big city, instead choosing to open up in small rural locations. Using the drivein model instead of drivethrough people were incentivized to show up in their cars, place their order, and wait for a delivery of A&W food right to their cars. That food included hamburgers, onion rings, fries, and the nowfamous A&W root beer. The nostalgia from that era still resonates with the baby boomer market who fondly recall nights spent with family and friends at one of the only recognized restaurants in a small town.But as the times changed, so did A&W It moved from drivein to drivethrough, as convenience and speed became paramount to customers. The company now has more than locations from coast to coast in Canada, an impressive number for a fast food company that is still small in comparison to McDonalds but in Canada outnumbers both Burger King and Wendys.And A&W did it by staying true to one thing: the hamburger. While its root beer would become the number one selling root beer in Canada, thanks to retail sales, the hamburger has always been the primary focus. The US operations of A&W focused on the root beer; but in Canada, the hamburger family was created: Papa, Mama, Teen, and Baby. A series of failed ventures, including being bought out by Unilever, had A&W mired in mediocrity for decades; and while the company remained focused on the products that had made it successful, it quickly realized it needed something to make it stand out in the crowd.This differentiator turned out to be a focus on quality, specifically with ingredients. This came not from the baby boomers looking to feel nostalgic, but from a younger demographic. In a Globe and Mail interview, CEO of A&W Food Services Susan Senecal observed, We saw that trend emerging among millennials whether it was in grocery stores or in fine diningit was all about how the food was raised, what was in it New specifications started showing up as early as with a proclamation that A&Ws hamburgers would be sourced from suppliers who did not feed hormones or steroids to their cattle.What resulted was nearly a decade of concerted efforts, both in product development and promotion, to position A&W as the most healthconscious fastserve restaurant in Canada. The company encouraged millennials to live out their values in the purchases made at the register, but also created a program called the Urban Franchise Associate program that encouraged millennials to own a franchise with a much smaller initial investment than other quickservice restaurants.As is the case with most unique positions in any market, A&W was not alone for too long in offering healthier and better sourced food. All of the major fast food competitors in Canada have begun to offer and promote ingredients that are more sustainably sourced.A&W seems to have created this approach as part of a consistent and conscious strategic focus.In an August interview, CEO Senecal was asked for the most important lesson she had learned in her tenure at the helm of A&W in Canada. She immediately answered, I would say the most important lesson from my years at A&W is the importance of creating and implementing a solid, relevant strategy that focuses on clear opportunities, plays to our strengths and involves everyone at A&W in its success. It is no wonder that A&W is called the QSR Quick Service Restaurant with a conscience. And this conscious focus on incorporating quality and care into its products has allowed this upstart fast food company to gain a significant chunk of the Canadian market. While other competitors may have a beef with this approach, A&W has used it to prosper.
How do they sustain or can they sustain this over time?
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