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How Shake Shack Transformed the Restaurant Industry

Understanding through SWOT & PESTLE analysis



Today, Shake Shack, the gourmet fast food chain, has become a very popular brand. Almost all teenagers in cities have been there and are in love with its burgers, cheese fries, and of course its shakes. Starting out as a hot dog stand in New York City in 2001, Shake Shack now operates in 180 locations globally and is further expanding.


I feel confident about my patronage of Shake Shack, but I have always wondered why such a new fast-food chain has become so successful even in the fiercely competitive restaurant industry. So I decided to create business analyses for the brand, combining both company objectives and my perspectives as a consumer.



This time, I used SWOT analysis and PESTLE analysis. I will go over what SWOT and PESTEL are just in case you do not know or want to revise them!


Strengths Weaknesses Opportunities Threats


Political Economic Social Technological Legal

Environmental



Below are my SWOT & PESTLE analysis on Shake Shack:


STRENGTHS

  • unique value propositions in products -> high customer satisfaction

  • brand awareness among the target audience

  • well-operated digital marketing -> innovative

  • the core menu is the same worldwide -> effective for keeping its customers

  • green oriented = CSR

  • animal friendly

WEAKNESSES

  • high price for a fast food chain -> has smaller target audience than usual fast food chains

  • less differentiation in the menu -> boring for those who want to challenge new tastes

OPPORTUNITIES

  • growing fast with innovative strategies

  • fast food but healthy

  • align price offering worldwide

  • advertisement often outdoor and enormous

  • publicly owned in an international market

  • services (eg. takeaway in form of drive-throughs) are exquisite

THREATS

  • limited suppliers & distributors -> could cause supply shortage

  • COVID-19 affected all stores enormously

  • high risk of losing reputation with food safety issues

-------------------------------------------

POLITICAL

  • COVID-19 lockdown procedures were different in each country -> more trouble operating

  • All Shake Shack in Moscow closed after Russia started attacking Ukraine.

ECONOMIC

  • inflation -> impacting food costs -> increase in the price of products

  • many other restaurants in the same industry closed due to the pandemic lockdowns and quarantines worldwide

SOCIAL

  • follows traditional family values

  • kept customers in touch through social media even during COVID-19 lockdowns to observe possible changes in the tastes of customers

  • use distinct social media accounts for each country with its languages

  • interacts with customers through cultural experiences

TECHNOLOGICAL

  • the pandemic enabled the company to adopt more online & mobile orders -> possibly leading to solutions for reducing the long queues in stores

LEGAL

  • N/A

ENVIRONMENTAL

  • maintains sustainability in all raw materials, especially beef

  • offers vegan & vegetarian options on the menu -> convenient for customers with allergies or those with religions that prohibit certain food

  • maintains smart food management

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