Wendy’s: A Plan for International

Expansion

Highlights

HISTORY
Basic information and product menu:
2018 – over 6,500 restaurants – majority in North America
2017 – out of all the restaurants, only 637 were located in international markets owned by
Wendy’s. Majority were franchised locations.
Franchise agreement
Controlled by Wendy’s Controlled by franchisees
Exterior store appearance Hours of operation
Food quality Interior décor
Menu Pricing
Uniforms and wages

Wendy’s signature hamburgers – single, double and triple – square patty instead of round
2011 – Replaced by Dave’s Hot N Juicy line
Many changes (however, the words single, double and triple were retained) –
1. Thicker patties
2. Classic square edges eliminated
3. Cheese stored in warm temp – melts on patty
4. Buns, produce and condiments – eg: red onions replaced white, no mustard

2012 – reintroduction of breakfast offerings after 2 failed attempts in 1985 and 2007
2014 – introduced Ciabatta Bacon cheeseburger – intention to remain temporary but made a
permanent item after success
2018 - breakfast sandwiches and burritos – introduction of black bean burger
Also introduced Baconator

International locations:
Entered international market – Hamilton Canada (1976), Munich Germany (1979), Japan
(1980), Hong Kong (1982), Philippines & Singapore (1983), South Korea (1984).
However, closure of Hong Kong and Singapore outlets (1986 & 1987) – economic slowdown
1988 to 1990 – entered Mexico, New Zealand, Indonesia, Greece, Turkey, Guatemala and
Italy.
1996 – 18 outlets in Argentina but closed all by 2000. Exited South Korea, UK and Hong
Kong.
2009 - Re-entered Singapore but exited in 2015.
2011 – Re-entered Japan and Argentina with 50 stores. Expanded to Russia also but shit by
2014.
2013 – entered Georgia
2015 – entered India

POTENTIAL INTERNATIONAL MARKETS FOR WENDY’S EXPANSION

 Africa
2018 – lifestyle change – key reason for growth of fast food
Rising middle class and income rise  greater disposable income  food on the go.
Curiosity as another factor  could be contributed to social media as well
May 2018 KFC South Africa, Angola, Namibia, Botswana, Malawi,
(market leader – 840 Ghana, Kenya, Zambia, Tanzania and Uganda
restaurants)
May 2018 McD (387) South Africa, Egypt, Morocco, Kenya, Mauritius and Tunisia
May 2018 Burger King South Africa, Egypt, Morocco, Kenya, Ivory Coast
(120)

Within Africa:
1. Egypt:
Population growth 2.2% annaually
Median age 25.3 years (Young
Population)
Language – Arabic
Religion – Islam (1st) and Christianity (2nd)
Booming economy, rise in tourism, larger workforce  rising income
 2016 – casual dining segment grew by 24%

Global Competitors:
McD (78 restaurants)
Burger King (68)

Local Egyptian competitors in Cairo:

Cook Door – sandwiches and meals (multiple locations)
Mo’men – sandwiches (30)

2. South Africa:
Multi-party democracy
11 languages – Zulu (1st), followed by Xhosa, Afrikaans and English
Religion – Christianity (1st), Islam and indigenous beliefs
Industries – Mining and agriculture – Africa’s largest and most stable economy
Rising income & growing number of women in workforce  busy lifestyle  eating
out
Fast food sector growth 9%, takeout restaurants 4%, retail growth 3 to 5%

Global competitors:
McD (over 200)
Burger King (70)

Local South African competitors:

Steers – flame-broiled hamburgers and homemade fries
Wimpy – Hamburger, fries, breakfast items
Nando’s (South African but global) – Portuguese and Mozambique chicken dishes

3. Ghana
Multi-party democracy
Languages - English (1st) and some African languages (Akan and Ewe)
Religion – Christianity (1st), Islam and indigenous beliefs
Industries – Gold, cocoa and oil
Economy – 7% growth since 2005
Changing lifestyle & oncome  growth in fast food

Competitors:
No McD or Burger King by 2018
Papaye (considered McD of Ghana) – fried and grilled fish and chicken
Frankie’s – burgers, milkshakes, pizzas, fries and Lebanese fast food

4. Kenya
Democratic republic with multi-party system
Languages - Swahili followed by English
Religion – Christianity
 Industries – Agri, forestry, mining, manufacturing, energy, tourism and financial
services
80% of the population under 35 years
Increasing middle class and disposable income

Global Competitors:
McD
Burger King
Hardee’s

Local competitors:
Steers and Snack Attack - chicken burgers and fries

 India:
World’s largest democracy
Languages – Hindi and English
Religions – Hinduism, Islam, Christianity, Sikhism and
Buddhism Largest youth population
2,700 fast food outlets – yet not enough to serve the current or potential population growth
Economic growth  people entering workforce  rising middle class  employed females
Government initiative – increased FDI  lucrative growth market for fast food

Competition:
McD (market leader – 300 restaurants)
Burger King (130 but planned to open 30-50 more)
Carl Jr (6)
American chains such as McD, KFC provide meal combos.
Low prices by domino’s and pizza hut

Strong local competition

 Russia:
Language – Russian
Religion – Christianity and some Islamic
Political – was and still dominated by Vladimir Putin (strong control over state institutions
and media)
Industries – Natural resources (oil and gas)
Rapid expansion of shopping malls and large number of young people  fst food growth
projected 20%
Location and price  Primary factors whereas quality and cleanliness  secondary factors

Competitors:
McD (market leader – 609 stores) – NOW
SHUT Burger King (500)
Carl’s Jr (17)

Local competitors:
Stardog (700) – hot dogs
Teremok (400) – Russian delicacies
Kroshka-kartoshka (300) – stuffed baked potatoes

Emerging Markets

 Colombia
Largest South American country
Language – English commonly spoken
Religion – Christianity
Industries – oil, gold, silver, emeralds, platinum and coal
Factors – employed women, high disposable income, openness towards new menus and
foods

Competition:
McD (80)
Burger King (40)
Hamburguesas El Corral – local – hamburgers and hot dogs
Preso – local – hamburgers

 Vietnam
70% population under 35 and 13% part of emerging middle class
Language – Vietnamese
Religion – Buddhism
Transformed from world’s poorest to a lower-middle-income country
Industries – food processing, garments, textiles, mining, coal and steel
Factors – FDI favouring laws and changing lifestyle

Competition:
McD – intended 100 stores but at 16 as of 2018
Burger king – intended 60 but 16 stores as of 2018
Jollibee – Filipino hamburgers and ice cream (140 stores)
Mos burger – Japanese burger joint
Lotteria – Japanese burgers

Question – what foreign market should Wendy’s target and how many restaurants should be
opened in each market?