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
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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