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Good Times

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Good Times Burgers Strategic Analysis
MGNT 903
Nasrin Rahi

Good Times

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Executive Summary

In the given report I had discussed the strategic analysis of Good Times Burgers that is operating
in casual dining category in restaurant industry. The report includes contents elucidating the
background and description about the given history, the product and services it offers and the
financial indicators reflected in the financial statements. In the given report, I first assessed the
internal and external environment factors of the company that are highlighting its strengths and
weaknesses. By application of Michael Porter Five Forces Framework, I was able to introspect
the given restaurant industry in the region of North America and how Good Times Burgers could
chose to pursue strategic objectives by altering its strategies. Market segmentation, product
positioning map and potential pitfalls are also highlighted. The report also includes financial
projections and budget for coming years. The recommendations and evaluation are basically the
concluding part to the discussion, which are very critical part of this research work.

Good Times

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Table of Contents
Company Background...................................................................5
Vision Statement........................................................................................................ 6
Mission Statement...................................................................................................... 6
Objectives................................................................................................................... 6
Current Strategies...................................................................................................... 7

External Opportunities and Threats (Good Times Burgers)..............9
PESTEL Analysis of Good Times Burgers.....................................................................9
Porter Five Forces Analysis....................................................................................... 10
Threat of New Entrants............................................................................................. 11
Level of Competitive Rivalry..................................................................................... 11
Threat of Substitutes................................................................................................ 11
Bargaining Power of Supplier.................................................................................... 12
Bargaining Power of Buyer....................................................................................... 12

Internal Strengths and Weaknesses (Good Times Burger)..............17
Value Chain of Good Times Burgers..........................................................................17
Analyzing Functional Areas
……………………………………………………………………………………………………… 20
Financial Ratio Analysis of Good Time Burgers.........................................................22
Horizontal Analysis of balance sheet-Good times burgers........................................28
Vertical Analysis of Income Statement.....................................................................28
Internal Factor Evaluation (IFE) Matrix......................................................................30

Michael Porter Generic Strategies................................................31
SWOT Matrix:............................................................................................................ 31
Space Matrix of Good Times Burgers........................................................................33
BCG Matrix for Good Times Burgers.........................................................................35
IE MATRIX................................................................................................................. 36
Grand Strategy Matrix.............................................................................................. 37

Count Summary Analysis.............................................................38
Quantitative Strategic Planning Matrix.....................................................................39

Market and New Product Development.........................................41
Long Term Objectives............................................................................................... 42
R&D department................................................................................................... 43
Marketing department.......................................................................................... 43
Finance Department............................................................................................. 43
Human Resource Management Department.........................................................44
Operation Department.......................................................................................... 44

Strategy Implementation............................................................44
Company Policies..................................................................................................... 44
Allocation of Resources
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45

Good Times

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Managing Conflict
………………………………………………………………………………………………………………
……. 46
Matching structure and strategy..............................................................................46

Cost of Recommendations...........................................................47
Market Segmentation............................................................................................... 47
Product Positioning Map .......................................................................................... 48
Capital Requirements for Company..........................................................................49
Financial Projections and Budget table for Good Times Burger................................50

Implementation Strategy and Making Possible Strategies to counter
adverse scenarios.......................................................................51
Timeline of Action.......................................................................51
Evaluation of Strategy................................................................52
Expected Unfavorable Scenario................................................................................ 52
Strategies in case of bad events occur.....................................................................52

References.................................................................................54

Good Times

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Good Times Burgers Strategic Analysis

Company Background
In 1987 in Boulder, Colorado Good times Restaurant commenced their operations. The
Company operates and owns restaurants at other places like Wyoming and North Dakota. At
earlier the company held a small subsidiary named Good Times Drive Thru Incorporation which
has engaged in the business of delivering high quality hamburgers through the drive thru
restaurants in the name of Good Times Burger and Frozen Custard. The use of such
terminologies such as “Good times, We, Us, Our” are key values that company wants to reflect
while carrying out its operations for its current and prospective Customers. The Company
Currently serves hamburgers, cheeseburgers, chicken sandwiches, fries, and onion rings.
Additionally, it provides custards, lemonades, and shakes. Good Times currently operates and
franchises 37 restaurants. They are currently 450 employees working in all the restaurants
operating in the Country. Good Times has been a public company since 1992 and is traded on
Nasdaq Smallcap GTIM (Sprague, 1987).
GTIM owns and operates Bad Daddy’s Burger Bar restaurants through its wholly owned
subsidiary, and will franchise Bad Daddy’s Burger Bar restaurants through its 48% ownership of
Bad Daddy’s Franchise Development LLC. Bad Daddy’s Burger Bar is a full service, upscale,
“small box” restaurant concept featuring a chef driven menu of gourmet signature burgers,
chopped salads, appetizers and sandwiches with a full bar and a focus on a selection of craft
microbrew beers in a high energy atmosphere that appeals to a broad consumer base. Bad
Daddy’s burgers was recently named a top 25 burger in the U.S

The Most . Provides ambiguity by mentioning “quick service”. Analysis: vision statement must be short.Good Times 6 Vision Statement We seek to establish a brand position in terms of quick service restaurants maintaining quality and standards for our consumers at large. which leaves room for development. It is ambitions by saying “establishing brand position”. The core strategies of Company are to maintain positive sales growth and improve the profitability. slides or drinks and custards etc.made to order service). Objectives The Company Objective was to initiate drive through experience for its customer by delivering high quality food in shape of hamburgers of all variety and kinds incorporating cheeseburgers. customer. ambitious and ambiguous this statement is a good statement but can be shorter. and philosophy (without use of hormones and antibiotic). Mission Statement Good Times Burgers seek to promote all natural foods that specialize in made to order service without any use of hormones. antibiotics in order to attract various customers across the globe. Analysis: mission statement must declare organization reason of being and have certain components. sliders. concern for public image. growth and profitability. which indicates their purposes. Although it includes key components such as product and services (all natural food. This statement is fair but too short. breakfast burritos. key market (across the globe). employees. It lacks many factors such as competitive advantage.

In order to maintain the customer loyalty. And opened its  first Bad Daddy’s burger bar restaurant recently. The Company has developed Brand Equity by producing various tastes with premium  quality in category of hamburgers. Trying to increase in guest counts and increase in average guest check by further increasing restaurant sales.Good Times 7 important drivers of success used by Good Times Burgers are mainly its values. There was an increase of 3. The company owns 48% of Bad Daddy’s Franchise Development LLC.1% in the year 2012 than previous . the company is regularly updating its menu and  keep floor clean and clear to make a lasting impression on customers. Current Strategies  Good Times Burgers have a good portfolio of products and menu contains all those fresh  products in different categories Improving Customer Service under the caption of “Happiness Made to Order” to promote friendliest service environment in terms of interaction between Employees and  Customers at the Point of Ordering. The Company wants to further improve and refine their employee’s knowledge of the various processes that enable the firm to operate at its optimum level. The company has strategic marketing policy and developing awareness for brand name of  Good Times Burgers and Frozen Custard. In this regard. They have introduced an online hiring system that seeks to curb the effects of employee  turnover rate. there  are various programs which are grooming the skills of employees. The Company has made a unique system in rewarding employees who give timely  service and that service is measured in minutes. peoples and excellent systems.

Environmental issues and Legal one that are confronted by the organization (Baron. External Opportunities and Threats (Good Times Burgers) PESTEL Analysis of Good Times Burgers PESTLE analysis is very helpful tool for conducting the external environment of the company. Improving Operation Income through sales derived through short term capital investment as they have experienced 35% to 50% in terms of incremental sales. It encompasses Political.Good Times 8 year. Technological. the external environment of the company is not in the control. In 2013 by our comprehensive approach we want to push for more sales by  producing a better brand experience for our current and prospective customers. The Good Times Burger PESTEL Analysis is elucidated as mentioned below: . 1995). Social. but it is largely affecting the performance of the company. Economic.

Technological Factors: Finances and control of management is made sure through the use of automated data and centralized management information systems. In society. The current economy and current scene of capital markets may affect the restaurant ability to get debt or equity financing for working capital in terms of building new restaurants and refinancing. comments on phone and website makes the company use technology in order to refine various procedures to sustain in  longer run. The process of order system at each Good Times Burgers Restaurants is equipped with internal timing device that measure the time each order and the time to deliver. Legal Factors: Good Times Burgers are subjected to various laws such Fair Labor Act containing laws that see the procedure of equitable pay or pay based on the amount of . Social Factors: The spread of various diseases such as bird flu or consumption of beef products. Essential Data in terms of Sales. 2009). the products of Times Good are demanding and all people support restaurants and Dines. The Company is subject to Fair Labor Standards which oversees matter in terms of setting wage rates and Americans with Disabilities Act which promotes use of restaurants to all the customers whether they are physically able or handicapped must be provided with  equal intention and care while providing service (Bivolaru. New  regulation related to disclosures to add to expenses for Good Times Burgers. health. Good Times Burgers restaurants are subject to regulations at State and Federal in the areas of safety. Labor and Cash Data is measured through point of sale transactions at various restaurants. if the news of any dangerous disease is aired then people  will definitely dislike the restaurants and food from it. However. labor law and political stability. sanitation and safety. Economic Factors: Recession at Macroeconomic level which lowers consumer spending can also affect the sale of Good Times Burger in general. The usage of secret shopper. telephone surveys.Good Times  9 Political Factors: Includes factors that look into areas of concern such as tax policy.

and Burger King to name a few. Threat of Substitutes. Good Times Burgers competes with lot of other restaurants that deliver hamburgers in the area that they basically have their operations. By increasing same store sales and venturing to open new restaurants the company is adequately lower threat of new entrants that enter market every now and then. Attractiveness in this context refers to the overall industry profitability. KFC. as a result threat of new entrance is high. Americans Disabilities Act ensure that restaurants caters the need of physically handicapped by building systems and structures that eliminate any kind of  discrimination in terms of service as well. Environmental Factors: Many different requirements of local governmental bodies have emerged with respect to land use and zoning could delay further construction of new restaurants at locations subject to approval. level of competitive rivalry and bargaining power of suppliers and buyers. . Threat of New Entrants The restaurant industry in America is highly competitive industry comprising many giant companies such as McDonalds. It includes key areas such as threat of New Entrants. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. They also have joint ventures that are currently operating in Denver metropolitan Area.Good Times 10 work done. Porter Five Forces Analysis It is a framework for industry analysis and business strategy development. Barriers to entry is low.

Threat of Substitutes Good Times Burgers do have a lot of substitutes in other food industry be it classy restaurants to cafes or stands offering hot dogs or big supermarkets. the Bargaining Power of Supplier in industry is low since they are many suppliers in the industry who provide food and paper supplies to many restaurants. Bargaining Power of Supplier For Good Times Burger. stake and shake and sonic.Jack in the Box. Food Services of America will not hamper their supplies since there are many suppliers in the market therefore they can maintain quantity of food and paper supplies at premium level (Porter. 2008).e. Some of its competitors are McDonalds. 1979). They basically rely on sole vendor i. Wendy’s. It can go through attracting various segments by increasing customer base (Porter. 1993).Good Times 11 Level of Competitive Rivalry Since the Industry is quite big and contains many big companies in delivering great service due to large finances and resources and strong brand equity than Good Times Burgers. Burger King. . By offering natural and handcraft foods without any added amount of steroid or hormones they will be able to appeal to different customers across the areas they operate and they want to open they restaurants. The Company has adopted differentiation strategy by promoting and delivering All Natural and Handcrafted Foods with made to order results in appealing to customers in unique and offers them a different value than usual competitors (Collis.

Since many customers have come to know adverse effects of hormones and steroid enabled produced meat they may avoid many restaurants which helps the Company maintaining its base and by offering a healthy. which is medium to high. they can easily switch to another restaurant that provide them with lower cost. the overall attractiveness of industry is low since most forces are high. except for bargaining power of supplier. Bargaining leverage allow customer to set the price and it doesn’t helps Good Times Burgers. Threat of new Entrance Rivarly among Threat of existing substitutes competato rs Power of supplie r Power of buyer . However. This is a very competitive industry and requires great strategy and plan before entering the market.1995). To conclude. Fresh and Handcraft Foods fulfill customer expectations without any hassles related to many health implications that recently capture the attention of many consumers across the country(Huselid. which is low and bargaining power of buyer.Good Times 12 Bargaining Power of Buyer Since there are large numbers of customers.

Financial Position 0.1 4 0.08 2 0. .22 3 0.13 1 0. Product Price 8.3 4. In general.44 0. and Good times.02 2 0.17 performing better than both Stake and shake. Global Expansion 0.2 1 0.22 4 0.22 1 0.06 4 0.11 3 0.36 0.52 3 0. any company’s total weighted score higher than 2. Market Share 0. Brand awareness 2.50 is considered a strong in position.13 4 0.24 0.27 2 0.11 4 0.09 3 0. Good Times is performing the weakest between two competitors.08 0. Product Quality 0.53 3.6 2 0.39 0.44 2 0. Variety and Taste of Food 9.11 3 0. Consumer Demands 7.4 2 0.33 5. Good Times received total weighted Average of 2. Stake and Shake with Score of 2.17 The competitive profile matrix shows Sonic incorporation with ranking of 3.1 2 0.11 2 0.3 6. since the company did not manage to stay above 2. Location Total 1 2.16 4 0.32 3 0.53 stayed slightly above the average and is safe for now.33 0.34 in Competitive Profile Matrix.34 2.Good Times 13 Competitive Profile Matrix (CPM) Critical Success Factor Weight Rating Score Rating Score Rating Score 1.1 4 0.2 3 0.04 3 0.15 4 0.15 1 0. Cleanliness and Efficiency 10.50 and be in a strong position.33 2 0.4 3. This indicates.18 4 0.

02 3 .05 4 .03 3 .18 .10 2 .8% industry growth rate Demand for Food that is all Natural and organic and Handcrafted Foods that contains no hormones or steroid Closing low volume restaurants to increase operating margin and greater allocation for overhead cost More demand for foods with low calorie count due to change in lifestyle Joint venture with some restaurant in future due to increase of food-service establishments in the United States which almost doubled in the last three decades Weight .Good Times 14 Based on CPM the key factors that helped company to get close to strong position are product quality.1% in fiscal year 2012 Increasing the breakfast day part which will give international sales 6% Competitors (BK & Wendy’s) lack Good Times like option double drive thru restaurant and 50% higher check ins More areas and site for expansion due to 3. External Factor Evaluation Matrix for Good Times Burgers Opportunities Consistently growing same store sales as trend showed an increase of 3.20 .10 Rating 4 Weighted Score .45 . cleanliness of environment.06 Rating 3 Weighted Score .03 2 .01 3 .15 3 .09 . variety and taste of food.06 . the company needs to build strong brand awareness and expand globally.20 . In order to achieve competitive advantage and be in strong position in the future.06 Threats Trends in lowering dining due to increase in obesity rate and disease such as bird flu Weight .40 .30 . production efficiency and convenient locations.

Fresh Grilled.9 percent to $188.1 billion in prospective year. The another offering is the introduction enticing customer towards lower calorie items thus imparting lifestyles in customers with menus like 5280 lifestyle menu list like Sweet Potatoes.05 2 . Third Key factor is Good Times Burgers initiative to close down the restaurants that are low volume in order to have more allocation for overhead resources and improving operating margin. There has been trend of recently low levels of dining in.20 . The quick-service sector’s sales should jump 4. Summer and Holiday Shakes.06 .Good Times Negative media campaigns highlighting potential adverse effect Franchise could take action in cause loss to business Rising cost of packaging and food items in year 2013 Recession and Economical factors such as decrease in value of dollar and increase in price of fuel The hamburger industry is highly competitive Changing in consumer tastes and switching to generic brands Labor shortages could slow business Total 15 . Hatch Valley New Mexico Green Chile Burritos.24 .98 Above is overview of Good Times Burgers External Factor Evaluation Matrix (EFE) in order to analyze the given set of opportunities and threats confronting the restaurants in longer run The National Research consultants have predicted a 3.03 2 .05 2 .10 . That would be the fourth consecutive year of sales growth for the industry. Honey Cured Bacon Burgers and Loaded Fries.10 3 .02 2 .30 . The other key threat the size of various competitors have large resources and there discounted prices could have severe impact on the . Key Threats include negative media campaign that circle with respect to the consumption of beef that have added preservatives that have adverse effects on consumers in publications.05 4 .10 .0 2.06 4 . to $660 billion.04 1.8 percent increase in restaurant sales over 2012.

Internal Strengths and Weaknesses (Good Times Burger) Value Chain of Good Times Burgers PROFIT MARGIN FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT TECHNOLOGICAL DEVELOPMENT PROCUREEMENT Outboun d Logisitc Opera tions Inbound Logistic Marketing And Sales Service PROFIT MARGIN Firm Infrastructure: The Company has in total thirty-seven restaurants that cater in areas of Colorado. despite being in competitive market. 1998).98 means that the company is responding moderately to challenges.Good Times 16 Good Times Burger Business. The ranking of 2. . Wyoming and North Dakota. They basically assist them in financial aspects in terms of getting transactions on behalf of the Company (Collins. Good Times Burgers signed with a company called the Heathcote Capital LLC (“Heathcote”) to provide the Company with financial suggestions based on possible strategic transactions which includes identifying and contacting potential acquisition or to find various sources of financing in terms of future needs.

. All the cash transactions are measured by management back office system that gathers sale volume occurred on point of sale transactions. They seek to hire competent employees with Operating Partners Program. Basically. for example Its fries will sit comfortably in the cup holder and its top is adjusted with fries length. they have implemented to measure time each order takes to be delivered by Taking Order Software that is there for further to quickly address areas of concern and quickly increase efficiency. Product packing is convenient to customers. Food Services of America and that result in their smooth continuation on operational front.e.Good Times 17 Human Resource: Good Times Burgers holds approximately 430 employees as per recent date taken from many credible sources. certify and retrain in order to increase efficiency at all levels at the organization. The use of having a library of video tools also elucidates the use of technology in order to strive for further consistency and be sustainable in longer. Procurement: All their supplies come from one vendor that is Food Services of America. All that includes food and Paper supplies Inbound Logistics: The source of all their supplies come from sole vendor i. test. They believe in continuous improvement since they have system that requires optimum efficiency. All employees are imparted with training based on train. incentives or bonuses that are tied to Key Performance Indicators formulated by the Company (Kaplinsky. They provide various benefits such medical insurance. 2000). Technological Developments: In terms of technology the firm is technically and professionally apt to withstand rigors that come with competing with Restaurant Industry.

They also market new schemes of products through on site merchandizing in order to attract and retain more customers. . computerized secret shopping program are some examples. Marketing and Sales: The Company basically serves its most expenditure in radio media and they intend make focus on funds on store level and trade area campaigns with help of Social Media. It has software for order taking to set a particular benchmarks how much time or measure time it takes to deliver a given order. National Restaurant Association provides courses to the employees on ways to maintain adequate hygiene and cleanliness within parameters of the restaurants. The person that takes the order is responsible for delivering that order to the customer as well. They inspect their manufacturers and then work closely with them to provide and map specifications and quality checks. They use several sources of customer feedback to evaluate each restaurant services and quality performance. Good Times accepts any complains and returns for exchange of an order. Website comments.Good Times 18 Operations: The Company gives adequate training to employees in terms of generating quality control. telephone surveys. Outbound Logistics: Since Good Times Burgers basically operates quick service restaurant or drive thru one. After Sale Service: feedback and returns are considered to be an important factor.

the company participates in local community events. According to business week article. More details about Finance will be discussed during the next step . Recently. Moreover. Also. Marketing: Good times marketing efforts on anticipating and fulfilling customer needs is satisfying. with “Hand-Breaded” chicken tenders and “Freshly cut” fries.2 million in cash. Finance/Accounting: Good times sales and profit are increasing. GTIM has a strong balance sheet to support growth with a minimal amount of debt and ~$5.Good Times 19 Analyzing Functional Areas Of Good Times Burgers Management: Good Times continuously capitalizing on its management skills and trying to improve weak areas by planning and organizing ahead of time. unlike a more visible peer who continues to resist activist pressure. and charitable activities to supports neighbors during their time of need. management actually "walks the walk" when it comes to maximizing shareholder value. The company was able to achieve successful result by commercials and image of “happiness made to order”. the company is planning to expand and open four more Bad Daddy’s “small box” restaurants by the end of 2014. by using cartoon commercials the company targets different age groups from children. teenagers to adults. Moreover. Good Times hired a Vice President to be in charge of franchise development of their newly opened Bad Daddy’s burger bar.

The company is trying to be a low-cost and high quality products with great customer service Moreover. the company put efforts into training the employees. However.1% for the month of November on top of an 8. research and development is a critical factor. but there is no relationship between R&D expenditure and successful product line. process. Good Times same-store sales are increasing continually as a result of strong operation and production strategies. the company’s Inventory decisions are to be reconsidered. The company nearly spends 1% of sale on research and development. Research and Development: Since the company should continuously develop new products on the menu. in developing new menu and product people’s preferences and consumer research are important factors that should be considered.4% same store sales increase in the prior year. . Last years inventory turn over rate displayed poor performance in inventory system. Therefore.Good Times 20 Production/Operation: Good Times restaurants sales increased 14. and quality of how the burgers are made.

Liquidity Ratio: liquidity ratio measures how quickly a company’s asset can be converted to cash.33 1.7 0.2 1.2 3. which gathers data from point of sale. .9 107.3% for 2012. It also measures the company's ability to collect on debts and accounts owed to them in order to purchase additional asset. Financial and management control is done through automated systems. current ratio of good times increased .Good Times 21 Management Information system: Good Times is no different than its competitors in managing information system and information technology. Comparing both companies to industry average it is clear both Good times and Sonic inc are doing well and slightly above the average.7 3 1. A high number indicates that the company collects cash more frequently which leads to a better liquidity position In this Category we have taken current ratio and cash ratio are as follows Financial Ratio current ratio = Formulae current assets current liabilities Industry Avg Competitor Sonic inc (2012) 2011 2012 1.10 Source: Businessweek Current ratio analysis represent Good Times Burger is 0. Sales and cash are collected using restaurants back office systems.33% which means it is better than the Good Times. Since firm current asset increased by 2.This means is firm is adequate in meeting its future obligations. In order to stay ahead of competitors Good Times should develop online ordering system and online inventory system to keep record of orders.7% for 2011 and 1.Financial Ratio Analysis of Good Time Burgers * For the purpose of project the ratios are calculated with given formula to observe the change from year 1 to 2 with accuracy of what item in formula has changed.3 80. A new system can help managers to make better decision.5 1. But Sonic Restaurants have current ratio of 1.25% .

77% is 2012. In this we shall take Debt to Equity and Debt to Capital ratio Financial Ratio Debt to equity ratio = Formulae Total liabilities Total equity 2011 2012 4.99 1.8 in year 2011 and 1.5 0. Financial Formulae 2011 2012 Industry Competitor .5 2.3 52.52 3 0.If we compare with industry analysis its way too behind. Leverage Ratio: indicates the extend to which a firm has been financed by debt.99 in comparison to latter in 2012.49 Source: Businessweek Debt to Equity ratio for Good Times Burger is 1.5 59.6+27. which is a good sign for the company. Current ratio of the Company is greater than this ratio it means company current assets are dependent on inventory.64 621.8 3.7 1. The competitor Sonic corporation ratio is 10.49%.3 1.8+0.5 1.1=0.Good Times Financial Ratio Quick ratio = 22 Formulae Cash and cash equivalents +account receivables (total) Current liabilities Competitor Sonic inc (2012) Industry Avg 2011 2012 0. both companies are performing higher than industry average which is a remarkable sign of progress.6+1.7 0. Good times equity increased by 0.32% during 2012.9 0.2 10.15 Industry Avg Competitor Sonic inc (2012) 0.1=79.8 3.15 in year 2012. Sonic Corporation has greater quick ratio of 0.52%% and 0.77 80. The Quick ratio for Good Times Burgers for Year 2011 is 0.12 Source: Businessweek Quick ratio is basically another measure of firm being able to meet its obligations in short term.7=2.

Good times has financial strength by having low cost of debt whereas Sonic inc has higher cost of debt.79 Industry Avg Competitor Sonic inc (2012) 1. the company’s asset turnover decreased by 0.71 7. Whereas the competitors stand on 0.5+4.1 0. Activity Ratios: Measures how effectively firm is using its resources.91.6 7 2.8 621.8=7.The competitor Sonic corporation ratio is 0.5=680 .79 and the industry average is 1.91 0.5 2.94 in 2011 and 2.5=7 0.2+621.7 0.Good Times Ratio Debt to Capital ratio = 23 Sonic inc (2012) Avg Total liabilities Total equity +total liabilities 4. I analyzed total asset turnover and Account Receivable Turnover ratio Financial Ratio Total asset turnover = Formulae Total Net Sales Total Assets 2011 2012 20.39 543/7 680.3+3.8 0.06 2.79 Source: Businessweek The asset turnover measures a firm's efficiency at using its assets in generating sales or revenue the higher the number the better for the company.53 in year 2012. .64 3.39.86 Source: Businessweek Debt to Capital ratio for Good Times Burger is 0.79 in 2012. The asset turn over was 2. This is due to the fact that the company’s total asset increased and gross profit margin decreased.94 19.5 3.64 in year 2011 and 0. A higher debt to capital indicates a higher default risk for the company.051% during 2012.53 59.

1 197.1 206 0.1 in year 2012. Good times is performing worst comparing to industry average and competitor.1 14. Good times burger has high account receivable it means it takes them a lot of time to get back their receivables.73 28.2% and -11.8 0. as well as how that profit relates to other important information about the company.8 Source: Businessweek The account receivable turnover for Good Times Burgers is 206 in year 2011 and 197.1 -.1 680.112 Industry Avg Competito r Sonic inc (2012) 10.71 543.6 19.Good Times Financial Ratio Receivable turnover = 24 Industry Avg: Competito r Sonic inc (2012) Formulae 2011 2012 Net Sales Avg Receivable 20. Its competitors have better returns on their assets than good times burger.7 0.0 7. Profitability Ratio : profitability ratio gives us an idea of how likely it is that a company will have a profit. Financial Ratio Formulae 2011 2012 Industry Avg Competito r .05 The Return on assets ratio for Good Times Burger is -14.73 which is quite better.8 36.8 7.0 -. Some of the profitability ratios that I have looked at are Gross Profit Margin and Return on Assets Financial Ratio Return on Asset = Formulae 2011 2012 Net Income Total Assets -1.The competitor has lower account receivable turnover of 36.142 -0.2 36.2% in year 2011 and 2012 respectively.

the cost of sales also decreased in 2012 by 0.812 34.04 0. The gross profit for 2012 was higher than in 2011 even though the sales revenue dropped in the current year. Overall. None of the companies are close to industry average however.22 285.4 543. Growth ratios: Financial Ratio Earnings per share = Financial Ratio Net income Formulae Net earnings to common stockholder Number of shares Formulae Annual percentage 2011 2012 1. In other words.6 0. the amount of gross profit generated for each dollar of revenue. two profitability ratios have increased.812 in 2012. Sonic Inc is performing better than Good times.42 2.69%.6 19. However. Since the company is facing rising expenses and the competition in the market is increasing the change is not drastic.524 ratio.40 0.7 0.7 0.the competitor has .07 2.3 20. Gross Profit Margin is the percentage of gross profit for every dollar of revenue.06 in 2011 and .Good Times 25 Sonic inc (2012) Gross Profit Margin = Gross Profit Revenue 1.32 Industry Avg Competito r Sonic inc (2012) .4 0.06 1.29 2011 2012 Industry Avg Competito r Sonic inc (2012) -0.524 Source: Businessweek Gross profit margin of the company is . which was the reason behind the increase of gross profit margin in 2012.44 0.

ROA gives an idea as to how efficient management is at using its assets to generate earnings. Return on Asset increased by 0. a company would be efficient when it achieves its annual sales target and minimized its costs. In simpler terms it is defined as “doing the thing right. ROE. and 98.39 in 2011 to % -28.” For example. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested it changed %-54. This is where problems are resolved and the intended or expected result is produced.35 0.41 in 2012) Efficiency refers to the ability to accomplish a job with a minimum expenditure of time and effort.69 in 2011. it is defined as “doing the right thing. both receivable turnover and inventory turnover have been decreasing (inventory turn over was 98.21% in 2012.99 2012.25 -4. which can result in the . Good times effectiveness is relatively decreasing.041 Analyzing financial ratios help us determine how efficient and effective the company is in meeting its obligation. Effectiveness is determined without any reference to cost. and gross profit margin. This implies that profits are increasing by a large scale. Effectiveness is the degree to which a purpose or goal is accomplished. It can be determined by looking at receivable turnover.Good Times 26 in profits % -1.10 -. It is said to be efficient when resources are used in such a way that production of goods and services are maximized. return on asset and inventory turn over.” For instance.21%. continuing the example mentioned in the previous paragraph. In simpler terms. a company is effective when it accomplishes its annual sales target even if it incurred high costs in order to achieve the assigned target. Even though ROA increased by 0. It can be determined by looking at ROA.

650.520.91% 24.Good Times 27 shareholders confidence.00 0 7.91% 2.000) 15.000 29.660.000 3.25% 17.000) (27.000 (0.86% 1005 493.00 0 4.000.37% 36% 7.720.25% 23.000 $191.080.640.330.08% 6.0% 53.00 0 7.60%) 79.060.000 159.2) 70.0000 ---------- ---------- 15.480.4 (16.260.67 3.75) 216% 9.00 0 5.17 100% .000 0. Gross profit margin increased by 12.000 3.63% 3.82 3.000 (231.62 7. Good times efficiency is relatively increasing Horizontal Analysis of balance sheet-Good times burgers Currency As of: in Millions of US Dollars Cash and Cash Equivalents Account receivable Inventory Total Current Assets Net property plant Total Assets Account Payable Total Current Liabilities Total Liabilities Total Equity Total Liabilities and Equity Sep 30 2011 Sep 30 2012 Increase Or decrease % VERTICAL ANALYSIS 2011 2012 $847.010.060.000) 2.0% 42.860.000 1539000 (32.00 0 2.8% 15.000 60.000 (3000) 1.00 0 $1.41% 54.6% $111.000 $616.000) (46%) 81.000 1.9% 46.6%.200.000 1386.680.000 (680. Therefore.000 (2.000.000 740.00 0 496.17% 64.800.000 1.16% 7.71% 43.

6 19.7 18.9 20.2 (0.9) 4 Year Trend due to closure of restaurants ↑ menureengineerin g result in lower cgs in 2012 ↑ ↑ Total revenues Cost of Goods Sold 20.2 20.2) 0.8) (0. total Operating income 0.0 0.2) -- (0.6 1.0 ↓ (2.Good Times Currency in Millions of US Dollars Revenues 28 Vertical Analysis of Income Statement As Sep 30 Sep Sep increas of: 2010 30 30 e Reclassifie 2011 2012 d 20.1) (0.7) (0.0 (0.1 (0.0 (0.1) 0.0 (0.9) (1.9 2.2 (0.4 0.3) Interest expense Interest and Investment Income Net interest expense Income (Loss) on Equity Investments Other non-operating income (expenses) Ebt. total Other operating expenses.3 1.8 2.7) 0.6 19.2) ↑ ↑ due to closure of low operating restaurants ─ ─ ↓ ↓ due to end of many partnership .7) 0.9 20. including unusual items Minority Interest in Earnings Earnings from Continuing Operations Earnings from discontinued operations Net income (0.2) Gross profit Selling general & admin expenses.0 (0.3 19.9) (0.0 (0.1) 0 -- 0.90 (1.6) 0.2) 0.1 0.7 (0.1 (0.5) (1.3) 0.2) ↓ ↓ ↓ ↓ ↓ (0.3) -0.7 (0.5 1.0 0.1) 0.3 0.2 (0.6) -- -- -- (2. excluding unusual items Gain (Loss) on Sale of Assets Ebt.4 (1.1) 0.0 (0.9) (0.3 1.3) -- (0.6) -- (0.5 (0.5) 0. total Depreciation & amortization.1) 0 (0.9 2.8) 0.7 1.4) 0.2 (2.0) (0.2 (2.

9) (1.0) (0.2) (2.8) (0.3) (1.0) (0.2) and franchise restaurant ↓ ↓ .8) (0.Good Times Net income to common including extra items Net income to common excluding extra items 29 (2.

05 2 .08 .78 .04 .06 .03 .08 4 .03 2 .04 2 .06 3 .03 .07 3 .03 1 .04 factor 1 Weighted score .03 2 .05 3 .08 4 .04 1.15 .10 .06 3 .Wyonming and North Dakota Inflation could result in variability in food costs New restaurants may not be profitable due to little diversification Lack of finances to acquire new sites Dependence on key management employees Total Weight .36 Menu re-engineering to reduce the cost of sales Excellent management and employee retention Gain in demand due to providing natural handcraft foods without hormones or steroid Increase in efficiency due to 12.06 .18 Weaknesses Greater competition such as Wendy’s Non-drive through generate more 50% average chick-in Closure of few low operating restaurant Lower resources and finances such as inventory turn over Statured market and Competitors provide greater range Limited to few areas like Colorado.21 .Good Times 30 Internal Factor Evaluation (IFE) Matrix Strength Early development of double drive through concept Weight .00 2.03 1 .1% in fiscal year 2012 Made to order concept reduces costs by 1.5% increase in gross profit margin Improvement income from operations due to close of four restaurants in 2012 Sales increase in 2 to 3 % gained through lower advertising expenditures Increase in Same store sales of 3.04 1 .06 3 .03 .20 .05 4 .32 .03 2 .18 .03 1 .06 .05 5 .18 .15 .09 Factor 4 Weighted Score .32 .3% in terms of packaging cost Operating partner program result in 25% of restaurant improvement in cash flow .

Increase in efficiency due to 12. Through Menu Reengineering the company was able to reduce cost in terms of bettering their income and reducing cost of Sale.Closure of few low operating restaurant 4.Good Times 31 Since the value of the firm comes at 2.Made to order concept reduces costs by 1.Wyonming and North Dakota 7.Greater competition such as Wendy’s 2.Statured market and Competitors provide greater range 6.Limited to few areas like Colorado.50 makes a company position is weak.Non-drive through generate more than 50% average chick-ins 3.Excellent management and employee retention 4.New restaurants may not be profitable due to little diversification 9.Sales increase in 2 to 3 % gained through lower advertising expenditures 8. Michael Porter Generic Strategies Good Times Burger have adopted Differentiation Strategy with concept of drive thru restaurants enabling customer to get served in no time rather usual large restaurants catering dine in by promoting All Natural.3% in terms of packaging cost 1.Inflation could result in variability in food costs 8.Improvement income from operations due to close of four restaurants in 2012 7.Gain in demand due to providing natural handcraft foods without hormones or steroid 5.Menu re-engineering to reduce the cost of sales 3.5% increase in gross profit margin 6.Dependence on key management employees .78 means it has decent performance.Lack of finances to acquire new sites 10. A lower value than 2. SWOT Matrix: An analysis of an organization’s strengths and weaknesses alongside the opportunities and threats present in the external environment Internal Strengths Internal Weaknesses 1.Early development of double drive through concept 2.Increase in Same store sales of 3.1% in fiscal year 2012 9. Fresh and Handcraft Foods without any hormone or steroids or growth substances that cater to diverse segment of Population.Lower resources and finances such as inventory turn over 5. Their Prices are adequate enough and does not have impact on customer check inns.

Develop presence in Asia and middle east.O8) 2.S5.Training middle management with view of succession planning to avoid over dependence on key personnel at higher level. T8) 4.The hamburger industry is highly competitive 7.O8) External Threats ST strategies WT Strategies 1. T7) 2.8% industry growth rate 5. W9.O7) 3. (W1. (S4.S8.Closing low volume restaurants to increase operating margin and greater allocation for overhead cost 7. W2. S6.Good Times 32 10.By renovating same stores the company can drive for further sales.Making better Product Lines or developing or adding range of complementary products might help in stemming the flow of competition.Franchise could take action in cause loss to business 4.Demand for Food that is all Natural. O5.S4. Focusing on achieve competitive advantage and economic of scale (S6. (W6. W5. O7) 2. T7) 1.O4. T6.O4) 4.More demand for foods with low calorie count due to change in lifestyle 8. O1. (S1.Negative media campaigns highlighting potential adverse effect 3. O1.Trends in lowering dining due to increase in obesity and disease such as bird flu 2.Changing in consumer tastes and switching to generic brands 8. Growth or expansion may happen in other nearby places from Colorado.Rising cost of packaging and food items in year 2013 5. Recession and Economical factors such as decrease in value of dollar and increase in price of fuel 6. Ensuring customer satisfaction by providing better services and operations compared to competitors.Operating partner program result in 25% of restaurant improvement in cash flow External Opportunities SO Strategies WO Strategies 1. T6. (W1.Increasing the breakfast day part which will give international sales 6% 3.(S5. organic and Handcrafted Foods that contains no hormones or steroid 6.Producing more products in menu line that project healthy lifestyle indicating low nutrition count.Introdcuction of mobile and online restaurants might have better result (S5.Competitors (BK & Wendy’s) lack Good Times like option double drive thru restaurant and 50% higher check ins 4.Joint venture with some restaurant in future due to increase of food-service establishments in the United States which almost doubled in the last three decades 1.Control Costs through closure of low operating restaurants.T3.1% in fiscal year 2012 2. Labor shortages could slow business 1.More areas and site for expansion due to 3.T2) 3.O5.S7. and reducing advertising (S2. T1.O3. menu reengineering. W6. S3.Must try to cope with price vitality caused by recession and shortage of capital due market scenario (W4.T4) . Providing positive image and building good reputation in how the food is prepared.S9.W10. S2.O3) 1. (S2.Consistently growing same store sales as trend showed an increase of 3. (S2. O1) 3.

3__ Market share -2__ Price/quality ratio -3__ Product life cycle -2__ Customer loyalty -1__ Competition's capacity utilization .57__ xcoordinate (CP + IP) .42_ average Environmental (SP) -1 best. +1 worst +_1_ Return on investment +_2_ Leverage +_3_ Liquidity +__2 Working capital +_2_ Cash flow +_3_ Ease of exit from market +__4 Risk level of business + __2.2__ Demand variability -2__ Price range of competing offerings -1__ Barriers to entry into market -4__ Competitive pressure -3__ Price elasticity of demand -2.13__ ycoordinate (FP +SP) __1. +1 worst +3__ Stage of industry/alliance evolution +3__ Growth potential +4__ Profit potential +4__ Financial stability +4__ Technological knowhow +4__ Resource utilization +3__ Capital intensity +3.28___ average Industry (IP) +6 best. -6 worst -3_ Stage of technological life cycle -1_ Rate of inflation .00____ average __0.2__ Technological knowhow -1__ Location -2.57___ average Competitive (CP) -1 best.Good Times 33 Space Matrix of Good Times Burgers SPACE Matrix Analysis: Variable Scores Internal Strategic Position External Strategic Position Financial (FP) +6 best. -6 worst .

. Intensive +4 +5 +6 IP -1 -2 -3 Defensive Competitive -4 -5 -6 ES Since we came with the coordinates of x-axis =1.Good Times 34 SPACE Matrix Analysis: Graph FP Conservative Aggressive Intensive Intensive. Related diversification Integration +6 diversification +5 +4 +3 +2 +1 0 -6 -5 -4 -3 CP Retrenchment Liquidation Divestation -2 -1 0 +1 +2 +3 Integration.57 and y-axis =o.13 the company should go for an aggressive strategy either to go for market development or product development in terms of introducing low calorie value count menu.

0 Low Relative Position (Market Share) .8% (Ruggless.042186 High +20 ? Industry Growth Rate 0 -20 Low 1. The industry growth rate is 3.59M=0.50 High 0. 2014) Good times burger relative market share is: Brand’s Market Share/sales ( ÷ Largest competitor’s market share/sales) 22.89M/542.0 .Good Times 35 BCG Matrix for Good Times Burgers According to NRA (national restaurant association).

product development and divestiture.0 Weak 2.1.0 1. Good Times must strengths their business by perusing intensive strategy.0 1.0 Strong 4.0 1.0 .0 4.0 4.0 EFE Score (2.78) Strong 4. . market development.98) Average 3.0 . 0 3. IE MATRIX Internal-External Matrix IFF Score (2. Companies under question mark category generate low cash. 0 Weak 2.0 3.Good Times 36 Since Good times falls under question mark.0 2.0 2. Averag 0 e 3.0 .0 . therefore.3. market penetration. 0 Good Times should maintain and hold their position by using two strategies: market penetration and product development. the suggested strategies are.2.0 3.2.

and the food processing industry is growing both domestically and internationally.Good Times 37 Grand Strategy Matrix Grand Strategy Matrix Analysis Rapid Market Growth Quadrant II Weak Compe titive Positio n      Market development Market penetration Product development Horizontal integration Divestiture Quadrant I         Quadrant III      Retrenchment  Related diversification  Unrelated diversification  Divestiture Liquidation Market development Market penetration Product development Forward integration Backward integration Horizontal integration Related diversification Strong Compe titive Positio n Quadrant IV Related diversification Unrelated diversification Joint venture Slow Market Growth The Grand Strategy Matrix is based on two evaluative measures. product development. . When we were making the Grand Strategy Matrix we found that because of the market growth and Good Times Burgers belongs in quadrant 1. competitive position and market growth. Good Times Burgers is the strong in areas of Colorado when it comes to the food industry. The strategies that they could use from being in that quadrant are market development. market penetration.

Therefore. based on ST strategies the company tried to lower advertising expenditure and focus on increasing sale.V. market penetration can create internal conflict comparing to what company trying to achieve. Dakota and Wyoming.Good Times 38 Count Summary Analysis Strategies Fwd integration Back integration Horizontal integration Market penetration Market development Product development Concentric diversification Conglomerate diversification J. Between Market penetration and Market development I believe the company should seek market development. By choosing this factor the company can create brand recognition worldwide and not only in Colorado. Market Development and Product Development are appropriate one since considering the size of industry. Retrench Divest Liquidate Other SWOT IE X X X X X X SPACE X X X X X X X Grand X X X X X X X BCG X X X X Count 2 2 3 4 4 5 3 1 X 1 The first strategy that is clear for company to do is product development. . they could try to target new segments such as customers who are more health conscious and intend to lead healthy lifestyle. Moreover.

18 4 0. QSPM Opportunities Consistently growing same store sales as trend showed an increase of 3.06 0.03 0.15 2 0.03 - - - - 0.03 3 0.06 3 0.06 3 0.05 - - - - .2 4 0.2 0.1 4 0.1 4 0.02 3 0.18 4 0.05 3 0.09 1 0.8% industry growth rate Demand for Food that is all Natural.6 0.4 2 0.1 2 0.Good Times 39 Quantitative Strategic Planning Matrix ENTER NEW Markets such as Middle east and Asia where people prefer foreign products and Burger dining is trending. and 70 calorie Lettuce Burger.4 0.24 0.05 0.3 0.15 1 0.03 4 0.02 1 0.03 0. organic and Handcrafted Foods that contains no hormones or steroid Closing low volume restaurants to increase operating margin and greater allocation for overhead cost More demand for foods with low calorie count due to change in lifestyle Joint venture with some restaurant in future due to increase of foodservice establishments in the United States which almost doubled in the last three decades Threats Trends in lowering dining due to increase in obesity and disease such as bird flu Negative media campaigns highlighting potential adverse effect Franchise could take action in cause loss to business Rising cost of packaging and food items in year 2013 DEVELOP NEW PRODUCTS on the menu that can attract customers with different taste and regional preferences such as Pizza Burger.4 3 0. Weight AS TAS AS TAS 0.3 4 0.1% in fiscal year 2012 Increasing the breakfast day part which will give international sales 6% Competitors (BK & Wendy’s) lack Good Times like option double drive thru restaurant and 50% higher check ins More areas and site for expansion due to 3.12 1 0.24 0.

07 4 0.1 2 0.28 0.09 0.15 0.04 2 0.3% in terms of packaging cost Operating partner program result in 25% of restaurant improvement in cash flow Weaknesses Greater competition such as Wendy’s Non-drive through generate more than 50% average chick-ins Closure of few low operating restaurant Lower resources and finances such as inventory turn over Statured market and Competitors provide greater range Limited to few areas like Colorado.06 2 0.06 - - - - 0.09 0.44 2.18 0.08 3 0.24 2 0.Good Times Recession and Economical factors such as decrease in value of dollar and increase in price of fuel The hamburger industry is highly competitive Changing in consumer tastes and switching to generic brands Labor shortages could slow business 40 0.06 3 0.05 - - - - 0.03 2 0.09 3 0.08 4 0.24 3 0.03 .05 4 0.Wyonming and North Dakota 2.5% increase in gross profit margin Improvement income from operations due to close of four restaurants in 2012 Sales increase in 2 to 3 % gained through lower advertising expenditures Increase in Same store sales of 3.24 0.12 3 0.4 0.03 4 0.12 4 0.18 0.02 - - - - 1 Strengths Early development of double drive through concept Menu re-engineering to reduce the cost of sales Excellent management and employee retention Gain in demand due to providing natural handcraft foods without hormones or steroid Increase in efficiency due to 12.2 4 0.1% in fiscal year 2012 Made to order concept reduces costs by 1.15 0.05 4 0.12 3 0.07 1 0.2 3 0.16 0.2 3 0.05 - - - - 0.7 0.08 - - - - 0.09 0.06 4 0.12 1 0.16 0.27 2 0.03 - - - - 0.03 4 0.03 4 0.05 - - - - 0.

Risks on failing to achieve sales and the product being unsuccessful (Sprague.05 4 0.04 - - - - 1 TOTAL 1. 1987).Competitors can copy your strategy that compensate the short comings .Knowing the existing competitors and their overall market share and strategy's  Disadvantages: . Long Term Objectives Increase revenue by 20% in coming three years by launching new product consists of low calorie count menu.03 - - - - 0. .New to the market and fresh opportunities can help the company to be a leader .04 3 0. .96 1.Loosing control over the market such as suppliers and shipping.Good Times 41 Inflation could result in variability in food costs New restaurants may not be profitable due to little diversification Lack of finances to acquire new sites Dependence on key management employees 0.48 The above analysis of QSPM indicates product development is the way forward for goodtime than market development Market and New Product Development  Advantages: .05 0.Competitors may have reached a declining phase.2 1 0.12 2 0.78 4.40 4. giving your product an advantage .08 0.Customer satisfaction and loyalty .

Good Times Operations objectives Reduce losses from operating income Increase in same store sales by 4% in coming years 42 Human resource objectives Seeking to hire more restaurant managers and operating partners Annual objective s Provide training to new manager Give training to employees in order to Marketin g objective s More stress on advertising by having presence in Annual objectives Intensifying promotional campaigns and also increase focus on site merchandizing Finance objectives Mastering finances and obtaining $500.000 for strategies related to new product and R AND D objectiv es Introducing new Pos system and menu reengineering Annual objectiv es Annual objective s Ensuring better cash generation in order to curb losses Develop low calorie count menu .

3. Increase more on site mechanizing Finance Department 1. 2. Promoting the new product developed in low calorie category in the most extensive way 3. Constantly finding to reinvent and improve processes of quality and service. They want to improve their operating margin by managing our incremental sales growth.Good Times 43 The long term Objectives of Good Times Burgers have given importance in R&D department 1. 2. It tends to give more importance of social media in gathering more customers and conducting trade fair (Sprague. Reducing cost of sales and better reduces their overhead cost. 4. . 2. The introduction of new system in terms of new Point of Sale system to further improve recording of transactions. 1987). Launch of new product such as lifestyle 5280 menu Marketing department 1. Initiating techniques like menu reengineering in order to curb the rising cost of food prices.

. It is imperative for Finance Division to make efforts to reduce additional costs incurred in form of expenses 2. Operation Department 1. They want to same store sales in 2013 since 2012 saw increase from 2011. Following are some important policies elements that are necessary for the company. Aggressively ensuring sales of the new product developed in low calorie category. menu-reengineering and minimize losses. 2. 3. Strategy Implementation The phase is crucial since its alignment of resources with company strengths and opportunities Company Policies Increase in Revenue though same store sales. We want to train more employees for higher roles. 1. The implementation of online screening and hiring those results in reduction of employee turnover rate of 50%.Good Times 44 Human Resource Management Department 1. 2. Operations division must try for the year 2013 to continue same store sales as there was increase of 3. To emphasize upon succession planning in order to be not so dependent on some key management figures. They want to hire apt candidates and operating partners to generate and improve standards by providing them with effective remuneration packages 4.1 percent in previous year 2012.

Good Times 45 3. Resource Allocation Good Times Burgers should require allocating resources by prioritizing them in terms of developing new products. 5. Conducting market research and frequently conducted feedbacks might depict o tell whether the strategy is going in right direction or not. Managing Conflict . Must try to improve their supplier strategy. Operation division must aggressively work with marketing department to make sure the new product developed turns out to be successful through on site merchandizing to increase check in the coming months. The company must keep with control over its finances when it comes to financing various restaurants with they have done dual branding. they must try much more other products in order to increase since current customers trends have seen a decrease in the consumption of high calorie menu due to adverse effects of health in USA. By the introducing the low calorie menu. Implementation of better advertising campaigns in areas of the restaurant in order to increase customer counts and to make themselves more prominent 9. 7. Ensuring quicker and better working resources by testing new point of sale system therefore engaging employees with better training methodologies in order to cope with rigors of ever increasing demands. Closing non performing restaurants in future might help in generating additional finances as per information being given by financial figures in the company 8. Large part of resources shall be required on operational front since it shall require large amount of resources to launch a new product with additional marketing expenses in terms advertising. 4. since they are relying on sole vendor might provide hindrance in the objectives they trying to pursue tin terms product development strategy in terms of introducing a variety of low calorie menu for its customers 6. 10.

Denver and Wyoming. Operation concern will be to see that no there is additional expense incurred during the time of implementation stage. For example in this case Good Times Burgers are based its restaurants in Colorado. .Good Times 46 Establishing new strategies will definitely create disagreement between two or more parties in the organization. Matching structure and strategy A divisional structure by geographical location shall be most suitable since it caters to having strategies prepared according to needs of customers in different geographic area. This should always allow the local management at any restaurant the leverage to make decision in better way. Re-engineering menu is subjected to change in processes that might affect staff efficiency. The resistance might come from chefs who have make adjustments in accordance with company vision. Moreover. Changing menu and adding new items to the menu can create conflict between chief and managers on whether to restructure or reengineer the menu. Human resource concerns might arise due to increasing demands of the business they have to train employee to follow procedures in compliance but the various budgetary constraints might curtail such endeavors. implementing strategies such as market development create trade-offs between managers whether to seek growth or stability or whether to emphasize on profit margin or market share.

Caucasian and Hispanic . Segmenting markets help managers to determine consumer needs and to match supply and demand and therefore it is easier to control what types of product and services to provide. The segment has its potential to bring renewed vigor for Good Times Burger in terms of its financial Prospects and future. urban and suburbs Demographic Age Mostly from 20 to 30 Gender Male and female Family size 2+ Education Christian and Protestants and Jewish Race White.Good Times 47 Cost of Recommendations Market segmentation Segmentation is important variable to determine customer preferences and taste to be able to increase sale.African American Nationality Americans Psychographic Social class Middle upper and middle lower class Personality Trendy and progressive Behavioral Use occasion Regular Usage rate Medium Benefits sought Fresh high quality food and service Attitude readiness Positive . VARIABLES Market Segmentation Geographic Region Colorado. In order to go for product and market development the company must go for mixture of geographical segmentation since it centers its base around three cities or more with 39 restaurants there in every locale of the cities. Wyoming and North Dakota Density Rural. The Behavioral Segmentation shall be to attract more consumers who perceived to be more health conscious and want to lead fitter lifestyle than the people.

the key criteria that have been chosen for product positioning map are Consumer demand and Brand awareness that are chosen from the CPM .Good Times 48 Product Positioning Map (Before) High consumer demand SONIC Low Brand awareness High brand awareness GOOD TIMES STAK Low Consumer demand Product Positioning Map (After) High Consumer Demands SONIC GOOD TIMES Low Brand Awareness High Brand awareness STAK Low Consumer Demands As you can observe in the diagrams.

Good Times 49 table.380. The company basically is doing 50/50 debt equity financing as elucidate in the above Input data Amount of capital requirement EBIT Range lines.87 2.The deal with SII II also result in SII ownership in 51. The company entered into contract with PFGI II LLC with net proceeds of $1.3 % of company outstanding common shares. After implementing the product development and market development these two areas will increase significantly leaving company in a very good position.000.000) for the year 2012 from Interest rate Stock price Shares outstanding 5 percent $2.614 outstanding ($895. Capital Requirements for Company The company has one with long term debt financing in terms of acquiring money from Wells Fargo Bank. the number Around 2 million how determined Since net loss did decrease to ($668. .272.000) in 2011 No taxes incurred .

250 19.000 increase (474) (450) (340) income from operations in negative as the previous year 2012 Although company had its strengths in terms of year 2012 by increase in same store sale and reduce cost of sale through menu-reengineering.500 3.Good Times 50 Projected Income statement and Budget table for Good Times Burger ITEMS YEAR Rationale for Projection 2012 (amoun t in dollars) 2013 2014 Restaurant Sales Franchise Fee and Royalty Total net Revenues Restaurant operating Cost Food and Packaging Cost Payroll and employees cost occupancy and operating cost Pre-opening cost depreciation and amortization Total Restaurant operating Cost Selling and Administrative Franchise cost income from operations 19.000 22. The restaurant basically has restaurants in three areas and there it has been able to being in advantageous position since being first one to framework the idea of drive thru restaurants.350 23.592 7. Although they have introduced various menus . They had to change their strategy.017 650 590 18. Food and packaging cost will increase due to new product launch payroll will decrease as large part of allocation shall go to other expenses 795 18.400 3.200 Restaurant sales might take initial low after new product launch franchise fee increase due to more acquisitions Revenue to increase 20% Operating cost shall increase due to on site marketing and advert.939 3.450 6.706 21.000 500 515 19.000 7.000 might decrease due to closure of more joint venture restaurants will increase due to new product launch and various other activities 2.274 432 21.154 -51 3.800 6. since the hamburger market is competitive for the last five years.691 7.100 7.

They can gain competitive advantage though geographical segmentation because most of their restaurants are in three areas so they should maximize their chances to increase their revenues in coming year. Timeline of Action Launch of New Product launched in the three respective areas of business. They should go for franchising and acquisitions in much more conservative way since they had to close many restaurants due to low operating volumes. Since the company had adopted a differentiation strategy because it provides different menus with ample amount of variety. Implementation Strategy and Making Possible Strategies to counter adverse scenarios The implementation strategy can be executed to plans as well unless if there is raising cost of food prices or inflation reasons to consider. The trend now is consumers have shifted towards occupying a health conscious lifestyle which promotes one to indulge in healthy low calorie count menus due to various campaigns being in media because of consumption of high calorie foods could cause serious issues for consumer’s. Overseeing the resources and allocation in right areas so that expenses are Sep-Dec 2014 managed Refining processes in terms of service and quality of employees in order to Dec 2014 produce optimum efficiency. it was still seen that normal casual dining restaurants had higher check inns. . Aggressive marketing on site and through social media or digital networks. See the performance of Product in its initial months through customer June 2014 June-Aug 2014 Sep 2014 feedbacks.Good Times 51 with quality service.

as company is largely focusing on the franchises. The fourth is the increasing number of products in the portfolio. The third is the expansion strategy of the company. Strategies in case of bad events occur Some events might curtail their approach because they will need some additional financing. Many large food companies have signed strategic contracts with other companies to formulate the convergences in order to get advantage from each other’s specialization.g. Many people prefer to stay at home and prepare own food that is economical and healthy. The second expected unfavorable scene may be the failure of marketing strategy. It must be kept in mind that failure of any product might negative impact the performance of whole organization. particularly modern tools e. If they do not get appropriate capital since due to prevailing recession the strategy they want to implement might get stalled and the rising cost of food prices might add to woes in case they do launch a new product in the market. It has been observed that when there is recession. social media. Negative Publicity might also hamper their . smart phones and direct marketing (Ferrell & Hartline. At the time of formulating marketing strategy. the advertising campaigns are less penetrating. there is low demand of restaurant items in the market (Dorfman. It must also be kept in mind that in modern times. because there is floor of advertising in every sphere of life. all the parameters must be kept on the table. The professional or job doing people are also the loyal customers of Good times Burger and they are also poorly responding in times of recessions.Good Times 52 Evaluation of Strategy Expected Unfavorable Scenario The first and most important factor that every firm in the food industry is expecting is the Recession or poor economic performance of the country. 2013). 2012).

They should focus on their product since that serves them as a source of strength in terms of offering differentiated and unique value in terms of menu ranging to hamburgers.Good Times 53 progress to fully exhibit their activities to launch the product. They might just need individuals to be trained for the launch in order to execute plans in accordance of the pre-planned strategy. custards. Good Times Burgers must not go for more franchising since it hasn’t worked to their advantage as previous events has seen the closure of low operating volume. 5280 lifestyle menu or other low calorie count foods. . In order to deal with such situation they must try to keep resources or additional gains they get due to closures or reduction in production cost. They can further reduce their advertising to social media so that they don’t have to spend a substantial amount.

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