Acknowledgement
We would like to express our gratitude to all those who gave us the possibility to complete this assignment. We want to thank the
Department of Management Sciences for giving us permission to commence this assignment in the first instance, to do the necessary
research work.
We are deeply indebted to our supervisor Mr. Shomail Sarwar from COMSATS Institute of Information Technology Lahore, whose help,
stimulating suggestions and encouragement helped us in all the time of research for and writing of this assignment.
And Hardee’s gave us information about this company & helped us out to make the whole report.
Our group members, who looked closely at the final version of the assignment for English style and grammar, correcting both and
offering suggestions for improvements,
Especially, we would like to give our special thanks to our family whose patient love enabled us to complete this work.
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Table of Contents
HISTORY.....................................................................................................................................................................5CKE RESTAURANTS FACTS................................................................................................................5HARDEE'S COMPETITORS...................................................................................................................6.....................................................................................................................................................................6MONSTER THICKBURGER...................................................................................................................6HARDEE'S FAST FACTS........................................................................................................................7
PRODUCT DEVELOPMENT STARATEGY...............................................................................11
........................................................................................................................................................................12
CURRENTLY THE STRATEGIES WHICH HARDEE’S ADOPT INCLUDES;.........12
-PRODUCT DEVELOPMENT STRATEGY &......................................................................................12-MARKET DEVELOPMENT STRATEGY............................................................................................12PRODUCT DEVELOPMENT..................................................................................................................12
........................................................................................................................................................................21
HOW BLUE IS YOUR STRATEGY?.............................................................................................21
........................................................................................................................................................................22
INSTRUCTIONS FOR CANVAS....................................................................................................22
AS – IS STRATEGY CANVAS (COMPARISONS B/W ALL THREE COMPANIES)........................................................................................................................................................................28
Visual Awakening…………………………………………………………………...….28Visual Exploration………………………………………………………….….……….29Visual Communication………………………………………………………..………..34
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History:
Hardee's is an American fast-food restaurant chain, located primarily on the Eastern half of the United States in
Hardee’s was founded by Wilbur Hardee, who opened his first restaurant in Greenville, North Carolina in 1960. In 1997, CKE Restaurants (owner of Carl’s Jr.) acquired Hardee’s. As of 2006, Hardee’s operates 1993 restaurants in 31 US states.
Five months later he had his first franchisee and over the years his burger chain has spread to become a favorite throughout the Midwestern and Southeastern United States.
When they launched after five months they made their first franchise.
They were famous at that time for biscuits but in 2003 they introduse thick burger line. And it got good response from people
Hardee's decided to pare down its menu and focus on the hearty 1/3-, 1/2- and 2/3-pound Thickburger line. Made with
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100% beef, Thickburgers established Hardee's as a leader in the quick-service industry in both quality and taste.
Today, Hardee's forges ahead with a taste for edgy, memorable ads and delicious food-creating a fast-food experience that can't be topped this side of the Mississippi.
A subsidiary of CKE Restaurants, Hardee's is a fast food chain located primarily in the Eastern and Southeastern United States. Along with its West Coast sibling, Carl's Jr., Hardee's is the fourth largest fast food chain in the U.S.
Within the first decade Hardees grew to be nearly 200 locations, with one located in Heidelberg, Germany. The famous Hardee's biscuits were introduced in the '70s, with a cinnamon raisin version added during the popularity of the singing California raisins in the '80s. Hardee's was purchased by CKE Restaurants, Inc. in the 1990s.
CKE Restaurants Facts Stock symbol: CKE Annual sales (2007): $1.5 billion Founder(s): Carl Karcher Year Established: 1964 Industry: Restaurants Phone: (805) 745-7500 Fax: (714) 490-3630 Toll Free: (877) 799-7827 HQ: Carpinteria, California President: Andrew F. Puzder CEO: Andrew F. Puzder CFO: Theodore Abajian Staff: 26,000 Other key people: Tom Lindlom
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1,100 Carl's Jr. locations 1,900 Hardee's locations Owned Rally's from 1996-1999 Owned Taco Bueno from 1996-2001
Hardee's and Carl's Jr. partnered with My Coke Rewards in May of 2010 to reward customers with double the prizes. The campaign launched on May 24 at Hardee's locations across the nation. The
rewards consist of My Coke Rewards points and a peel-off coupon for redemption on the next Hardee's or Carl's Jr. visit to receive a free
item or a discount. The purchase of a large fountain drink is necessary to receive the special promotional cup with the peel-off coupon and
the points.http://www.hardees.com/company/releases/carls-jr-hardees-partner-with-my-coke-rewards-to-make-everyone-a-winner/
Interesting Fact: The original cost of a Hardee’s hamburger was 15 cents
Hardee's Competitors McDonald's Wendy's Burger King White Castle Jack in the Box
Monster Thickburger The release of the Monster Thickburger in 2003 created waves in the media for its 1,410 calorie, 107 grams of fat and 2,740 grams of sodium content. Nutritionists were
considered with the products potential to contribute to an obesity epidemic in the U.S.
Hardee's Fast Facts Parent: CKE Restaurants
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Parent stock symbol: NYSE: CKR Founder: Wilber Hardee Year Established: 1960 Industry: Fast Food Phone: 800.711.4274 HQ: St. Louis, MO
Hamburger shape was orginally hexagonal like the restaurant design
Few products from Business Portfolio
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Different products of Hardee’s are allocated in different category on the basis of their market growth and relative market shares.
Cash Cows: Beef Burger/ Monster thick burgers are the products which makes business with high relative share of low-growth markets. They are primarily generators of profits& cash in a corporation. They don’t require much additional investments. Its market is stable & its share leadership position usually means they enjoy economies of scale & relatively high profit margins.
Stars: Chicken Burgers is a product falling in stars. A star is a market leader in a high growth industry. Stars are critical to the continued success of the firm. As their industries mature, they move into the
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bottom-left quadrant & become cash cows. But they are critically
important. They often are net users rather than suppliers of the cash in the short run.
Dogs: Beef Steaks is such type of product which currently does not produce enough profit for company due to decline in its demand by the change in customer taste for it. Therefore, company continuously tries to reduce its supply.
Question Marks: Ice creams & shakes are cash cows for the corporation because they are primary generator of profit and cash in the corporation due to largest sales of these products. The corporation uses this cash to support its question mark and star products.
Mission StatementWe will try to provide 100% customer satisfaction by giving
them high quality of healthy & tasty food. We want to be the world’s market leader with the help of monster thick burger. We are on the way to grow more & get at least 60% market share of fast food industry. We believe that the success of business is hidden in the honesty, quality, uniqueness & customer satisfaction. A positive dining experience delivering by an outstanding team.
Objectives To achieve 10 billion dollars sales every year from all over the
world. To get 60% of market share of fast food industry. To provide 100% satisfaction to customers by providing good
quality with different taste of food & services. To satisfy internal customers we will provide wage rate more
than our competitors offering. To open franchises globally so that we can combat
unemployment of society.
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Strategy*Market development strategy
We will expand our business by expanding it geographically.We will also start providing chicken burger to satisfy chicken
lovers
Market penetration-increase market share-increase the quantity of sales
Product development-Product improvement-Product line extensions-New product to current customer
New market development-Extension of market for current product (geographically , new target customer)
Diversification-Vertical Integration Forward integration Backward integration-Horizontal integration-Diversification to related product-diversification to unrelated product
PRODUCT DEVELOPMENT STARATEGYAlternative corporate growth strategies are given below.
Hardee’s develop its strategies also from this chart
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Currently the strategies which Hardee’s adopt includes;
-Product development strategy &-Market Development strategy
Reasons are given below;
Product development Hardee’s is trying to improve the quality of its products for
increasing their current customer satisfaction and to retain them by using modern technology and increase their product line by provide different taste with quality to get maximum market share. In this way the sales of company increase which increase their profit and ultimately the earning of share holder.
Market DevelopmentRight now there are only two franchises of Hardee’s in
Pakistan. Both are in Lahore. One is on M.M.Alam Road & other is on Thokar Niaz Baig. So Hardee’s is trying to open more franchises to expand its market. And get more market share.
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Miles & snow Business Strategies
There are four business strategies according to them.
Prospector Analyzer Defender Reactor
Prospector: Operates within a broad product market domain that
undergoes periodic redefinition. Values being a first mover in new product & market areas
even if not all of these efforts prove to be highly profitable. Respond rapidly to early signals concerning areas of
opportunities, & these responses often lead to new rounds of competitive actions.
Competes primarily by stimulating & meeting new market opportunities but may not maintain strength over market in all market enters.
Defenders: Attempts to locate & maintain a secure position in relatively
stable product & service area. Offers relatively limited range of product & services
compared with competitors. Tries to protect its domain by offering lower prices, higher
quality or better services than competitors. Tends to ignore industry changes, technological, new product
development. Not directly related to its area of operation.
Analyzers:
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Makes fewer & slower product market changes than prospectors but is less committees to stability & efficiency.
Attempts to maintain a stable limited line of products or services.
Seldom had a first mover but often a second or third entrant in product markets related to its existing market often with a lower cost or higher quality product or service.
Reactors: Lacks any well defined competitive strategy Does not have a consistent product market orientation than
competitors Not willing to assume the risk of new product development
than its competitors.
ProspectorUnits’ primarily concerned with attaining growth through
aggressive pursuit of new product market opportunities.
Differentiated AnalyzerUnits being strong core business actively seeking to expand into
related product market with differentiated offerings.
Low Cost AnalyzerUnits being strong core business actively seeking to expand into
related product market with low cost.
Differentiated DefendersUnits primarily concerned with maintaining a differentiated position in mature markets.
Low Cost DefendersUnits primarily concerned with maintaining a low cost leadership in mature market.
Reactors
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Units with no clearly defined product market development or competitive strategies.
Prospector Analyzer Defender Reactor
Differentiated
Mc. Donald’s
(Broad Product
line/Marketing)
KFC(High Quality,
High Price, No
Competitive Action)
Hardee’s(High Price,
High Quality) AFC, Fri-Chicks
(No Technologi
cal Advancem
ent, No competitive action)
Low Cost Leadershi
p
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Hardee’s
It lies in Differentiated Defender Because, It primarily concerned with maintaining a differentiated
position in mature markets. Attempts to locate & maintaining a secure position in relative
stable product & service area. Initially it is offering relatively limited range of quality burgers
& services compared with competitors. They are trying to protect there domain by offering lower higher
quality food with different taste & better services than competitors.
Tends to ignore industry changes, technological, new products development
Red Ocean & Blue Ocean Strategy
-Rite now Hardee’s is working under Red ocean Strategy-Where there are a large number of competitors-Every one wants to increase market share.
Under red ocean strategy Hardee’s having two main competitors that are Mc. Donald’s & Burger king. They both are larger fast food selling companies, competing with Hardee’s with different factors. Under As-Is strategy the comparison of Hardee’s with its competitors is as follows:
-As-Is Strategy Canvas
Key Buyer Group Youth
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Competing Factors You Comp-1Comp-2
(Hardee’s) (McDonalds) (Burger King)
Price high low highTaste high high lowServices high medium mediumTechnology medium high
mediumQuality high high highEnvironment high medium lowNutrient value high low mediumProduct line low high lowGeographical area low high low
As-Is Strategy Curve of Hardee’s
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As-Is Strategy Curve of McDonalds
As-Is Strategy Curve of Burger King
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As-Is Strategy Curve (comparison between all three competitors)
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BLUE OCEAN STRATEGY
(Make competitors irrelevant) - Go where profits & growth are & the completion
isn’t.
HOW BLUE IS YOUR STRATEGY?
Exceptionally high value at drastically low cost. Creating new demand instead of striving to do better than
competitors. Looking for non-customers and reconstructing industry and
market boundaries. Challenging assumptions and reconstructing industry and
market boundaries. Pursuing de-segmentation instead of finer segmentation. Focused on widely shared needs instead of differentiating
needs. Voluntarily participated self-initiated teams. Executing strategies while conserving time and resources.
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Instructions for Canvas
1. Identify the dominant customer groups your industry focus on. Label this on your Strategy Canvas.
2. Identify the key competitive factors your industry competes on to capture his dominant customer group. There should be not less than five and no more than 12. Price is always included in your key competitive factors.
3. Rate the relative offering of each factors and vertical axis. Price is always an absolute figure; a higher price should be plotted high, while a low price should be plotted low.
4. Connects the dots to create your “AS-IS” value curve.5. Repeat process for your best competitor.
A NEW VALUE CURVE (under Blue Ocean Strategy)
There are four things in new value curveThese are
Reduce Create Raise Eliminate
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ReduceIn this we reduce the thing which can be reduced to lower the
cost and increase the sales of the companySo in case of Hardee’s we are reducing our price level. Because price level is too high right now which is not at all economical & average people can’t afford it. And because of this people prefer to go to McDonalds.
CreateIn this we create factor that industry has never offered. So we
are going to open franchises in different universities cafeteria’s of Lahore. Which are going to be Wifi. We are not going to offer thick beef burgers in university cafeterias. We will offer students meal which includes thin beef burger and cold drinks.
RaiseWe are going to provide kids meal with special toy gifts for kids.
We are going to launch flavored buns that no one had offered yet.
EliminateAs in case of Hardee’s we are providing full calories burgers.
But we know that mostly people of our country are not that much conscious about this thing so we are going to eliminate Nutrition Level.
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Reduce
Price levelFrom higher to medium
Create
Franchises in different universities cafeteria’sOf Lahore
Raise
Kids meal with toy giftsFlavored burger buns
Eliminate
Nutrition level (high to low)
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New Value Curve Table (Under Blue Ocean Strategy)
Competing Factors You Industry(Hardee’s) (McDonalds/ Burger king)
Price medium mediumTaste high mediumServices high mediumTechnology medium b/w high & mediumQuality high highEnvironment high b/w medium & low
Nutrient value low b/w low & mediumProduct line medium mediumGeographical area high mediumFranchises Uni Cafes medium low
A New Value Curve Of Hardee’s
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A New Value Industry Curve
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A New Value Curve of Hardee’s with Industry Curve
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Visual awakening;
Compare as-is strategy canvas with competitors Where strategy needs to change
AS – IS STRATEGY CANVAS (COMPARISONS B/W ALL THREE COMPANIES)
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Visual exploration
A- RECONSTRUCT MARKET BOUDARIES
The first principle of blue ocean strategy is to reconstruct market boundaries to break from the competition and create Blue Ocean. We found six basic approaches to remaking market boundaries we call this the six paths frame work which are given bellow
Define their industry similarly and focus on the best within it. Look at their industry through the lens of generally accepted
strategic group (such as luxury automobiles, economy cars and family vehicles) and strive to stand out in the strategic group they play in.
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Focus on the same buyer group, be it the purchaser (as in the office equipment industry ), the user (as in the clothing industry ), or the influencer (as in the pharmaceutical industry)
Define the scope of the products and services offered by their industry similarly
Accept their industry’s functional or emotional orientation Focus on the same point in time –and often on current competitive
threats-in formulating strategy.
We choose two Paths to reconstruct Hardee’s restaurant industry that is given below.
1-Look across alternative industries
Recently Hardee’s is competing in restaurant industry. But now we are looking across the industry. We are going to open a cinema with our Hardee’s franchise. That will give us a competitive advantage in the industry. 2-Functional and emotional appeal
Most of the restaurants are using functional appeals. Hardee’s was also using functional appeal but now we have decided that we will go with emotional appeal. We will say to people we are the only restaurant in Pakistan who is providing Nutrient value of the meal so that you can maintain your fitness.
Customer Survey
Competing Factors High MediumLow
Price 35% 40% 25%Taste 70% 20% 10%Services 55% 35% 10%
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Technology 30% 50% 20%Quality 70% 30%
-Environment 75% 25%
-Nutrient value 40% 55%
5%Product line 35% 30%
35%Uni Franchises 55% 15%
30%
Competing Factors Analysis
Price MediumTaste HighServices HighTechnology MediumQuality HighEnvironment HighNutrient value MediumProduct line MediumUni Franchises High
Reduce
Price levelFrom higher to medium
Create
Franchises in different universities cafeteria’sOf Lahore
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Raise
Kids meal with toy giftsFlavored burger buns
Eliminate
---
New ERRC Grid after Survey
-After Survey
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-Before Survey
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Visual Communication
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First we set the strategies than we communicate it to every employee, so that they can understand it. EFS distribute a one page picture that shows both strategies new and old. That shows the current position of the company and the future position of company. Then senior managers participate in developing new strategies. And they explain what we need to eliminate, reduce, raise & create to get the blue ocean & because of this employees can become motivated. The new picture can become a reference point for all investment decisions.
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