Principles of management

Name: Nishanth Urs

Class C semester 1
Reg no: 064
Take an organization and give info on how its structure and how it functions

In and Out (A fast food organization)

 It’s purpose and significance:

 It is a burger joint which serves tasty and delicious burgers with an aim to make the most servings
each day to scale the growth of sales and attract more customers with its fast service and clean
environment to eat the food that is served.
 Despite the price being totally affordable, In-N-Out doesn't cut corners on the ingredients they use.
Their beef patties are free of additives, fillers and preservatives and the fries are equally as fresh. In
fact, every store location receives shipments of potatoes that are individually cut right in the store.
 One of the factors that made them a great success is that they never change their menu this might
seem counter intuitive but this ensures that the customers who like the burgers can have the same,
delicious fast food and can come back to their favorites. However, they do add new items to their
menu but they never take out the ones that have made the most impact or that were there from the
beginning.
 Other fast food chains are always changing the menu, with food quality ranging from store to store
but in In-and-Out customers can count on getting the same great food, every time – and at every
location.

 History and How it all started:

 In-N-Out Burger is the story of three generations of the Snyder family, who took a small hamburger
shop in California way back in 1948, and turned it into a 335-store west coast American Cult.
 The brainchild behind the chain was Harry Snyder.
 For the next 70 years, the Snyders steadfastly refused to follow industry trends, instead sticking with a
simple strategy - Quality Food, Cleanliness and Service. With a recipe that worked, the business has
passed down the family tree and to this day remains virtually unchanged.
 “An In-N-Out store outsells a typical McDonald’s nearly twice over, bringing in an estimated $4.5
million in gross annual sales versus McDonald’s $2.6 million. In-N-Out’s profit margin is an estimated
20%. That’s higher than In-N-Out’s East Coast rival Shake Shack (16%) and other restaurant chains
that typically own their locations, like Chipotle (10.5%).”
 What’s amazing about In-N-Out’s margins is that they’re not a function of higher prices or lower
wages. In fact, quite the opposite; In-N-Out’s prices are cheaper than it’s competitors.
 “Over the past 30 years, the price of the Double-Double hasn’t even kept up with inflation. In 1989 the
sandwich cost $2.15, or about $4.40 in current dollars. It costs $3.85 today. A combo meal (Double-
Double, fries, drink) goes for $7.30, compared with $10.94 for Shake Shack’s standard double-burger
patty and fries.”

 How it works:

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 Restaurant workers, or ‘associates’ in In-N-Out speak, make $13 an hour, versus the $9 to $10 or so
that’s typical at most national competitors, including McDonald’s and Burger King. Part- and full-
time restaurant workers can enroll in dental, vision and life insurance plans through the company,
and full-timers can get health insurance and paid vacation, accruing time off after two weeks of
employment.
 Customer Focus
 From the start, In-N-Out ran a customer-driven shop
 Harry put a huge emphasis on customer satisfaction. In-N-Out workers were instructed to always
smile, look their customers in the eye, and maintain a level of courtesy with every guest. Long before
Starbucks, the Snyders called their customers ‘guests’.
 Quality Control
 In order to maintain the chain’s strict quality standards even as it grew, Rich implemented a small
army of ‘secret shoppers’. These undercover customers went from store to store on a monthly basis,
making sure that associates were properly dressed and clean, orders were correct, food was presented
properly, and even that the right amount of change was given.

 So how does In-N-Out maintain its margins?

 To start, the limited menu means reduced costs for raw ingredients. The company also saves
money by buying wholesale and grinding the beef in-house. By doing its own sourcing and
distribution, it likely saves 3% to 5% in food costs a year. It cuts out an estimated 6% to 10% of
total costs by owning most of its properties—many bought years ago—and not paying rent.
In-N-Out picks its locations carefully, clustering them near one another and close to highways
to lower delivery costs while also avoiding pricey urban cores. It has just one location within
the city limits of Los Angeles and one in San Francisco, while many Shake Shacks are smack in
the center of town.

 Unconventional
 Inside the company, franchising was a dirty word. In building In-N-Out Burger, Harry followed no
compass but his own. There was no hierarchical management structure, no bureaucracy, and there
were no shareholders to answer to.
 Success Factors
 When asked to account for the chain’s success, Esther Snyder once said that it has been
‘accomplished only with the dedicated enthusiasm and wholehearted co-operation of the In-N-Out
Burger employees and our pleased customers’.
 Win-Win
 Harry treated his suppliers well and never tried to exploit his relationships. Deals were struck on a
handshake and lasted decades, often ending only if the supplier went out of business - or failed to
meet Harry’s exacting standards.
 Value Employees
 Harry Snyder had picked up the rhythm of human interaction, and his business philosophy was based
on it. If you treated people fairly and rewarded them accordingly, he held, they would do likewise.
 Maintain Smallness
 Rich imbued the family firm with his effusive personality and nimbly transformed the restaurants into
a big business without damaging the integrity of the small burger chain that his parents had built.
 Summary

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 Its fascinating to hear how this family-owned and run chain has maintained its ideals across three
generations. Lynsi Snyder, the current owner, has held to her father’s and grandfather’s models
faithfully, ensuring the success story continues more than 70 years later.
 It is astounding to see how a company can grow to such heights on such basic values and principles
 THE REASON I CHOSE IN AND OUT

 First off it isn’t such a complicated or aN unique idea just the approach and the way they execute is
different and not much changes through the course of time as they keep their core values close as
mentioned in detail in the above paragraphs.
 The owners and the history of in and out is really intriguing and unique in nature.
 Last but not the least they are the best at what they do and you always study and learn from the best.

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 How covid 19 affected In and Out

Basis On an article in The Guardian:

Contra Costa County health officials shut the popular burger chain's Pleasant Hill location indefinitely
on Tuesday after it ignored repeated warnings to verify that customers who wanted to dine indoors had
vaccination cards or proof they had tested negative for the virus in the prior 72 hours.

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