White Castle Systems Case Study Essay Example

White Castle Systems: Case Study Paper Regarded by many as the original fast food chain, White Castle Systems has been most original in its careful and controlled growth strategy. A refusal to franchise domestically has been a unique operations decision in an industry where most fast food chains come into prominence through franchising. While this action has been successful in contributing towards a stronger financial base for the company, this may have been at the expense of additional potential market share. Now, after more than eighty years in the industry, the competition is catching up. Its twenty-four-hours-a-day model and limited menu are easily emulated. As a result, White Castle has begun losing the novelty effect of some of its core competitive advantages. Brand loyalty remains as White Castles single most valuable attribute. This loyalty is achieved by a series of successive, positive experiences and continual reinforcement from childhood through all ages. This cycle of consumer loyalty is complete when parents who grew up eating White Castle return to treat their children to the White Castle experience. White Castle will capitalize on its brand loyalty strength by paying close attention to trends within the childrens entertainment market and bundling those influencers with their current product offerings. Cross-promotion with video game companies, movies, sponsorship of skateboarding contests are a few marketing opportunities which will be considered. This push towards brand loyalty is geared towards attracting newer markets through heavy promotion, and is heavily focused on attracting younger consumers. We will write a custom essay sample on White Castle Systems: Case Study specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on White Castle Systems: Case Study specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on White Castle Systems: Case Study specifically for you FOR ONLY $16.38 $13.9/page Hire Writer White Castle must be careful not to alienate its current group of loyal followers. The organization must continue to sustain its offering of a quality fast food product, while making minor augmentations to the menu to accommodate their changing tastes and eating preferences. Atkins friendly menu additions, and the inclusion of energy formulas are two product differentiations in current demand by the market. Situation Analysis White Castle System, Inc. was formed in Wichita, Kansas, in 1921, by a partnership between Walter Anderson and Edgar Waldo Billy Ingram. In 1916, Anderson developed a different method of preparing a hamburger sandwich by flattening a ball of ground meat and cooking it with onions on a hot griddle for a short period of time. His hamburger sandwich proved popular enough for Anderson to open three hamburger stands in Wichita by 1920. In March 1921, Ingram joined Anderson as a partner in the operation of a fourth location under the name White Castle. The company incorporated in 1924 as the White Castle System of Eating Houses. White Castle soon embarked on a groundbreaking marketing campaign. In the 1920s, the average American had a negative perception about the hamburger sandwich. In an effort to change this attitude and to expand its carryout business, White Castle pioneered the newspaper coupon. First used in St. Louis, a White Castle coupon was good for a carryout order of five hamburgers for the cost of ten cents. The coupon offer proved an overwhelming success for the company. White Castle introduced its hamburger to a wide audience. Today the White Castle chain includes 380 restaurants and has maintained the same marketing tradition of offering customers fast quality food with friendly service. Marketing Summary Due to Americans now desiring to live a healthier, low-carb lifestyle, White Castle and other fast food chains have seen a decline in sales. White Castle still sells affordable food with ease and convenience. And despite the sudden decline, White Castles sales have remained secure and steady. -Geographics A White Castle Restaurant can be found in the upper-middle through to the lower-class neighborhoods. -Demographics White Castle targets individuals who are constantly on the go, or working class families who may not have the time to come home early to prepare a meal for the family. -Behavioral Traits The trends seem to be fast, tasty food at a low and reasonable price, not to mention providing the utmost quality not only to consumers but to employees as well. Family values are highly important, especially since it is a family owned restaurant chain. Market Needs White Castle has maintained their All American appeal by sticking with pure100% Beef in making their tiny burgers. In addition, what has helped them expand tremendously was by adding a frozen line for those who want to enjoy the same quality burgers, without enduring the long drive-thru lines. Market Trends White Castle has expanded their menus to broaden their appeal. They have added new features such as the Jalapeno and Chicken Sandwiches. In addition, they allow for endorsements such as when Shrek(r) was in theatres. Also, several White Castle restaurants have partnered up with Churchs Chicken(r) to expand their offering. SWOT Analysis The SWOT analysis addresses the strengths, weaknesses, opportunities and threats facing White Castle. -Strengths * Pioneered the fast food and the use of the coupons system * Friendly and courteous employees * Fast, tasty food you can count on each time * 80 year history that shows reliability and longevity * White Castle is a privately held company * Introduction into new markets with frozen hamburger -Weaknesses * Menus are somewhat limited in what is offered to the public * Delayed entrance into the global market * Limited locations -Opportunities * For the growing population of health-conscious individuals, White Castle food is considerably lower in fat, calories and carbs when compared to their competitors (i.e. McDonalds(r) or Burger King(r) ) * Successful frozen food niche. -Threats * Many successful competitors with wider varieties * Growing concern with health diseases and obesity Competition McDonalds(r), Burger King(r), Taco Bell(r), KFC(r) and Wendys(r) are the obvious competitors for White Castle. Each competitor is now offering a low-carb or low-fat product to beat out the health craze that White Castle has not addressed yet. In addition, they all have a wide variety of products that appeal to almost any fast-food eater. Key to Success All of White Castles strengths are their keys to their success. They have the backing of 80+ years of experience and consumer loyalty while maintaining quality food. Also, their financial growth is excellent in an unstable market. Critical Issues White Castle needs to address and respond to the sudden rise in healthy weight-conscious eating if they want to stay competitive. In addition, expanding their menus would greatly improve their sales by offering customers more options. Lastly, a little more emphasis placed on their advertising techniques. Conclusion For over eighty years White Castle has limited its menu to the basics: burgers and fries. Very few items have been added to the menu and those that have are all deep fried foods. White Castle seems to be as reserved about adding menu items as it is with restaurant expansion. While most fast food restaurant chains continue to expand at a fast pace, White Castle has chosen to expand slowly and only in those markets in which it is successful. This slow expansion and limited number of outlets has led to quite a cult following of the restaurant chain. Customers are typically brand loyal to White Castle and introduce family and friends to the chain as well. The inclusion of childrens meals and promotions with childrens movies has also helped to promote the White Castle brand. In an industry where the current buzzwords such as Adkins and low fat impose a concern for the pursuit of a healthier diet, White Castle seems to be able to buck the trends and stick to the traditional, unhealthy burger and fries menu. However, more women have joined the work force, and teens have more disposable income than ever before, consumers are beginning to expect expanded menus with more choices. These choices must include the typical fast food fare as well as the low calorie, low carbohydrate options that are popular today. The limited menu and limited locations are two of White Castles biggest weaknesses as well as threats. The competition constantly changes menu items as consumers eating habits change and most are opening new outlets at a fairly rapid pace. White Castle may have to address these shortcomings in order to continue to survive in a world in which the large chains dominate. Expanding menus and frozen food offerings as well as a light menu would help the chain to expand its customer base. The chain should also consider researching other markets, including international markets in which they may be successful. Through these changes White Castle must continue to market to the incredible cult following that the restaurant enjoys. These are the generations of people that will continue to come back and introduce friends and family to the White Castle experience.