You can learn a lot about how difficult it is to manage service firms at the mature stage of their life cycle from looking at quick service restaurants in the USA. For a long time, Burger King and McDonalds have been engaged in the so-called ‘Burger War’ – a war that right now BK appears to be winning. In this blog we take an operations perspective, but this high level of competition illustrates how important brand management and marketing are in the mature stage. A significant factor in McD’s performance has been how their image has suffered, especially with regards their product quality, supply chain integrity and employee management.
Equally fierce has been competition between operators in the chicken segment of the QSR sector. For a long time KFC has dominated this, but a long standing competitor has been achieving significant success, namely Popeyes, a brand we may be unfamiliar with in the UK. A great article on Forbes.com analyses this chain’s strategy and the factors that have lead to five straight years of growth.
A key element of Popeyes’ strategy has been a redesign of their servicescape. 80% of the restaurants in their franchise system have been revamped to be more contemporary – positioning them against casual dining restaurants more than quick service brands. A second key element has been to introduce a performance management system that let’s franchisees, and the franchisor, more closely monitor the performance of their outlets. For the first time, a single restaurant’s performance can be benchmarked against the performance of other outlets locally, regionally and nationally. We discuss the importance of benchmarking on pages 238-240 of our book.