Wendy’s SWOT Analysis (2024)

Products & Services: Breakfast Combos  | Breakfast Sandwiches | Sides | Coffee & Beverages | Combos | Hamburgers | Chicken Sandwiches & Nuggets | Veggie Option
Competitors: Chick-fil-A | KFC | Good Times Restaurants | Luby’s | Burger King | McDonald’s | Yum! Brands | Taco Bell | Subway

Did you know? The first location that Dave Thomas opened for Wendy’s was in Columbus, Ohio, not knowing he had started a fast-food empire.

Wendy’s Strengths

1. One of the best customer service

Customers will never forget you for how you treated and made them feel. That is a secret that Wendy’s appears to have mastered and is committed to delivering the best customer experience.

They have positive online reviews of exceptional services, which keep current customers returning and form the basis for attracting more customers.

Wendy’s also emphasizes the performance of its restaurant employees, who provide active and friendly customer service.

2. Essential amenities

Customers who visit Wendy’s to enjoy a meal get more than that. The company has invested in important amenities like flat-screen TVs, Wi-Fi, fireplaces, and comfortable seating arrangements.

These work to their benefit as the customers feel they get more than just great food.

3. Well-thought menu

The menu at Wendy’s has been well-crafted, and is clearly why the company manages to get loyal customers.

The company has many people who would precisely eat at Wendy’s and not any other place. That’s because of the diversified menu comprising many options, including beverages, breakfast combos, and veggie options.

4. Competitive prices

The prices of food at Wendy’s are average compared to what you find in most fast-food restaurants.

The company manages to keep its prices highly competitive without compromising the food quality.

Although the prices are low, Wendy’s still has a fancier menu compared to its top competitors, including Bacon Portabella Melt on Brioche and other personalization as per requirements.

5. Global Outreach

Organizations that expand their wings to the global market have an opportunity to get more customers and increase brand awareness.

Wendy’s has invested in setting up new franchises in other global locations, giving them an international presence.

As the company enjoys a solid local presence in the US, it also has stores in 31 other countries and seeks to expand this number. It has a total of 6,949 worldwide restaurants, with 6,541 franchised and 408 units company-owned.

6. Positive brand image

Wendy’s has built a positive brand image that continues to be an essential part of its success. Many people can easily associate the name Wendy’s with great meals.

Similarly, the company’s logo is strong enough to remind customers what it feels like to order food from the restaurant. The strong brand name is a reminder for all to visit the restaurant repeatedly.

7. Leans toward healthy diets

When Wendy’s started, they were focused mainly on burgers. However, the restaurant has changed operations over the years to adopt healthier meals.

Health-conscious customers are sure that they can always get what they are looking for at the restaurant. The change in business tact means they now attract customers looking for leaner and cleaner meals.

The salads and low-fat morning meals appeal to new customers even as Wendy’s retains its traditional customers.

8. High-quality and fresh products

Wendy’s is known for selling high-quality and fresh meat instead of frozen. The market even uses this as a marketing strategy, informing customers that their meat is really never frozen.

Every hamburger on the menu is made out of fresh beef that isn’t frozen, something other places like Burger King and McDonald’s would not commit.

When customers eat at the restaurant, they do not need to second-guess whether their hamburger was made from fresh or frozen beef.

9. Effective marketing

Wendy’s takes its marketing seriously and implements a diverse marketing strategy. The company markets through critical channels, including TV commercials, social media engagements, radio, digital marketing, and online advertisement, and utilizes national advertising funds for its advertising.

10. Strong financial position

Wendy’s has a robust financial position and healthy cash flow generation. That means the company has the strength to expand to new markets, run advertisements, and meet operational costs.

Furthermore, if a franchise could be struggling, Wendy’s may easily count on its financial strength to help it out.

11. Targeting millennials

Wendy’s target customers are mainly young people and millennials. By manufacturing the most suitable products for this group of people, Wendy’s successfully increased its customer base and realized sustainable growth.

Wendy’s Weaknesses

1. A significantly lower number of locations than competitors

Wendy’s may have opened restaurants in up to 29 countries, but these are significantly lower compared to competitors such as McDonald’s, which is present in about 120 countries.

It implies that Wendy’s global expansion is yet to reach a level that would make them a truly international brand.

2. High cost of running franchises and inconsistent customer experience

Wendy’s has more franchises (6,541) compared to company-owned restaurants (408). Operating these franchises sometimes proves difficult and expensive to keep up with expected standards.

Also, customers may not get the same experience across all Wendy’s restaurants. In turn, this can impact the brand negatively.

3. Unhealthy meals still on the menu

Even though Wendy’s has attempted to introduce healthier meals on its menu, there are still unhealthy options. That means it loses some customers who become very conscious of what they eat.

The beverages and burgers may need to settle better with a certain group of customers since fast food is generally seen as being unhealthy.

Wendy’s Opportunities

1. Semi-urban markets

Wendy’s has an opportunity to expand in semi-urban markets, which are experiencing a gradual increase in the demand for fast food.

If it timely anticipates these changes, it will successfully remain ahead of the curve.

2. Acquisitions

The company can retain a competitive advantage by acquiring stronger businesses that present stiff competition.

Such acquisitions reduce competition and add value to the brand since they add to the number of open locations. A business strategy focusing on buying smaller brands can work in Wendy’s favor.

3. Digital opportunities

The pandemic and the rapid development of technology have presented new growth areas for Wendy’s digital businesses. Wendy’s online sales made up 8.5% of total sales in 2021, and the company has partnered with Uber Eats to deliver its food.

By offering digital options such as apps, deliveries, coupons, and gift cards, Wendy’s has the opportunity to expand its customer base further and provide better customer service.

4. Expanding menu options

Another growth opportunity for the fast food chain is expanding its menu options. For instance, Wendy’s started integrating a breakfast menu into its offerings across the US in 2020, accounting for around 7.3% of total US sales in 2021.

In the future, Wendy’s can further explore new menus and recipes to attract more customers.

Wendy’s Threats

1. Inflation has driven up prices

Global inflation has seen the prices of commodities shoot up due to an increase in demand. Because of inflation, Wendy’s will have higher costs of raw materials.

Additionally, the company has weak power to pass the impact of price increases onto customers due to fierce competition in the fast food industry. Thus, it is very likely that the company’s profit margin will fall due to the stress of inflation.

2. Change in consumer behavior

There have been increased calls for healthy eating. As a result, fast food, which has been labeled as unhealthy, will face reduced customer demand.

Due to the change in customer preferences for healthier food, the fast food market in the US has grown at a slow pace of 2.8% in the past five years and is expected to grow at a rate of only 2.9% in 2022.

3. Intense competition

Wendy’s faces tough competition from other established brands like KFC, McDonald’s, and Burger King, especially regarding international expansion.

If Wendy’s doesn’t put enough effort into marketing and ensuring consistent customer experience, the company will undoubtedly lose market share to larger-scale competitors.

4. Tighter regulations

The fast food industry continues to face increasingly stringent regulations from authorities.

For instance, Wendy’s was fined $400K in 2020 for allegations of violating child labor law. The lawsuits will hurt Wendy’s brand image and its ability to retain customers.

 References & more information

• Featured Image by Haseeb Jamil

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