Assignment 1: Five Guys Burgers and Fries

Strayer University
BUS508, Summer 2013

Abstract A successful entrepreneur must have balance: be courageous, without being reckless, be humble enough to learn from mistakes and acknowledge them, be tenacious and passionate, but be grounded and intuitive enough to foresee a disaster, be creative and flexible, but be organized and conscious of limitation. They must also plan, but be open to unforeseen opportunities, invest in employees, but also hold them accountable (Lambing & Kuelh, 1997). Jerry Murrell, the founder and chief executive officer of Five Guys Burgers and Fries, along with his wife and five sons, have acquired such balance and have become the fastest growing chain in the food industry, according to the research firm, Technomic (Boone & Kurtz, 2012). Just this month, the booming chain opened a new location that seats 300 people in London, and anticipates four more stores in the U.K. by 2014 (Weise, 2011). What is truly amazing is that such a large family can sustain such balance while running a business together. Perhaps it started with a simple, balanced business philosophy and consistent values.

Philosophy and Values The matriarch of Five Guys Burgers and Fries, Jerry Murrell, realized that the only way to compete with the huge, established fast food chains like McDonald’s and Burger King was to concentrate all of their efforts and money on a quality product and customer service (Wiley Plus, 2012). The business plan of Five Guys Burgers and Fries was balanced and easy to stick to. “Sell a really good, juicy burger on a fresh bun. Make perfect fries. Do not cut corners,” (Wiley Plus, 2012). Murrell continues to stick with the plan by keeping it simple as he aligns his philosophy with that of JW Marriott. “Anyone can make money in the food business as long as you have a good product, reasonable price, and a clean place” (Pulizzi, 2012, p.1-2). However, it is not so simple to the educated consumer, at least in terms of a good product and a reasonable price, both of which are subjective. Competitors could argue that they also make a good product at a better price in less time and deliver it to customer’s cars via a drive thru window. When dissected, there are distinguishable values that set Five Guys Burgers and Fries apart from the competition and have from the beginning. Such values continue to contribute to the company’s rapid success.
External Factors
Because of National Heart Savoir Association campaigns that began in the 1990s and aimed specifically at fast food chains serving high fat, processed food, the educated consumer now measures food quality by more than taste (Julian, Ofori-Dankwa, & Justis, 2008). Nutritional, low-fat foods are a new priority to consumers. Food production, preparation, content, and freshness are currently more important to most consumers, as opposed to instant, precooked, frozen products that can be served faster to the consumer. Five Guys Burgers and Fries undoubtedly set themselves apart from the external markets by serving true quality food. From the beginning, they have served 80% fresh, lean, ground beef that has never been frozen (Wiley Plus, 2012). They only serve Idaho potatoes because they have a better taste, despite being more expensive and having a slower growth rate. Also process the potatoes in house so fries are fresh. Fries are cooked in low-fat peanut oil. Buns are made fresh daily with 17 toppings available to customers and made to order. Just as advertised in the business model, no corners are cut on quality or cost of food. They boast a simple décor that makes a statement to consumers; the money is spent on quality food, not fancy décor (Wiley Plus, 2012). McDonald’s and Burger King can not compete with that model of food quality, but Five Guys did not stop there with setting themselves apart from the competition.
Competition
Prior fast food chains have utilized production line operations to efficiently serve consumers. Studies now indicate that consumers, due to increases in affluent status, expect better products and services that are attentive to their specific needs and preferences (Qgaard, Larsen, & Marrburg, 2005). Five Guys Burgers and Fries does not offer a drive thru, nor do they. They proudly boast that the customer’s food will be made fresh to order, which means they also do not prepare it fast, or at least not as fast as McDonald’s or other fast food competitors. They also do not change their menu seasonally, or ever for that matter. Five Guys does not make any apologies for keeping a simple, balanced approach, as it aligns with their values, which have been all along, food quality, customer service, and “keeping it simple.” Again, Five Guys distinguished themselves from external markets by not compromising on their initial values, nor doing what the others do.
Culture
According to the five aspects meal model (FAMM), a renowned model used to investigate successful aspects in restaurants, the interactions between staff to customers, staff to staff, and customers to other potential customers are fundamentally important to a restaurants success or failure, along with management control systems that are in place (Carlback, 2008). Five Guys and Burgers go beyond their competitors who pay minimum wage and train employees to speak from a script. First, the culture at Five Guys is a market approach, where according to (Ogaard, 2005, p. 25) “Cultural values such as goal achievement, productivity and efficiency are emphasized. Motivating factors include competition and the successful achievement of predetermined ends.” Five Guys not only invests their money into the food, they reward their employees who perform well, and therefore, invest in their staff. Weekly audits hold them accountable, and bonuses reinforce quality service, safety, and consistency. In terms of consumer culture, Five Guys does not spend the average 3% on marketing, like their competitors (Wiley Plus, 2012). Instead, they utilize free markets, like Facebook, Twitter, reviews, customer’s word of mouth, and their own employees to create content marketing (Pulizzi, 2010). Even after refusing to spend money on national advertising campaigns, Five Guys Burgers and Fries managed to gain fame, notoriety, and two loyal customers; President Obama and the first lady. A simple, cheap T-shirt was sent to the President to get his attention and entice him to visit (Weise, 2011).
Conclusion
By remaining true to their initial simple values, being transparent to other markets and consumers, delivering fresh, healthy food made to order, and investing their profits into the food and their employees, the Five Guys Burgers and Fries Culture appears to have found a balanced entrepreneurial model for success. The markets they currently serve continue to have an insatiable appetite for a fresh burger, made to order with fresh, cut fries, and a drink. That simple combination is in high demand in the USA, Canada, and most recently, the UK, the company’s latest venture. The demand is higher for quality, fresh, limited options, as opposed to the cheap, fast, and endless options of the past. Thus far, these evolving external changes have favored Five Guys Burgers and Fries.
Discussion
Looking into the future, the question arises; will Five Guys Burgers and Fries sustain such success given their continued global expansion and consumers’ ever-changing expectations? Consumer demands vary in different countries with various cultures. Currently McDonald’s, despite their usual standardization, offers fish in Norway and “McSpaghetti” in the Philippines to adapt to those local markets (Qgaard, Larsen, & Marrburg, 2005). In addition, consumer expectations continue to rise with more education from the media on the production of food. In the USA alone, demand for organic meat and other consumable products are rising. Five Guys will inevitably face challenges as they franchise globally into markets that are different than the US markets they have thrived in. It will be fascinating to see if Five Guys Burgers and Fries will be able to maintain their core values, and their “keep it simple” approach in such markets. As for rising demands in the US, the question arises if their approach will be applicable, feasible, and economical if the company is ever faced with the costs of all organic food to meet consumer demands. Will they be able to sustain their success if they refuse to meet such demands? Will they find the same balanced approach when faced with the new demands? These questions certainly warrant future discussion and investigation.

References
Bagheri, A., & Pihie, Z. A. L. (2011) Human Resource Development International. Malaysia, Malasyia: University Putra Malaysia. Boone. L., & Kurtz. D. (2012). Contemporary Business. Hoboken, NJ, John Wiley & Sons, Inc. Boone, L. (2012) Economic challenges facing contemporary business- Case study II- Five guys Burgers and fries. Retrieved from http://www.edugen.wiley.com/edugen/iti/main.uni.
Carlback. M. (2008). Are the chain operations simply with it? Journal of Foodservice, 19(1), 74-79.
Julian. S. D., Ofori-Dankwa. J. C., & Justis. R. T. (2008). Understanding strategic responses to interest group pressures. Strategic Management Journal, 29(9), 963- 984.
Pulizzi, J. (2010, April 5). 7 Content marketing tips from five guys burgers and fries. Retrieved From http://contentmarketinginstitute.com/2010/0417-content-marketing-tips-from-five-guys- Burgers-and-fries/.
Qgaard. T., Larsen. S., & Marnburg. E. (2005). Food Service Technology. Norway, Stavanger: Stavanger University.
Susana de Julana-Espinosa. (2012). Human Resource Management in the Digital Economy. Spain. IGI Global.
Weise, K. (2011, Aug). Behind five guy’s beloved burgers. Bloomberg BusinessWeek. Retrieved From http://www.businessweek.com/magazine.