Wendys

3/30/2009
http://www.wendys.com/
Strategic Management Case Study

Tony Gauvin
Tony Gauvin, UMFK, 2009
WENDYS 2007
OVERVIEW
New Mission and Vision
External Assessment
Industry analysis
Opportunities and threats
EFE Matrix
CPM Matrix
Internal Assessment
Strengths and weaknesses

Financial Condition
IFE Matrix
SWOT Matrix
Space Matrix
IE Matrix
Grand Strategy Matrix
Matrix Analysis
QSPM Matrix
Strategic Plan for the Future

Objectives
Strategies
Implementation Issues
A Brief history of Wendys

Existing Mission and Vision
Existing Objectives and
Strategies
Current Issues
Strategy Formulation
3/30/2009
Company Overview
EPS/EBIT
Evaluation
Wendys 2008 Update
KEY FACTS 2007

5,936 Stores in the US
1274
709 International Stores in 20 countries

376
in Canada
140 company owned
3rd largest hamburger fast food chain

Square ground beef hamburgers (never frozen)
and Frosties
# 1 brand for taste and quality (especially the
French Fries )
company owned
All 50 states and DC (Maine has 4!)
3/30/2009
KEY DATES
1972: Wendy's franchising begins.
1975: First international restaurant opens in Canada.
1976: Wendy's International, Inc. goes public
1977: Company begins national television advertising.
1978: The 1,000th Wendy's opens in Springfield, Tennessee.
1979: Salad bars are added to Wendy's restaurants.
1981: Thomas makes his first appearance as Wendy's advertising spokesperson.
1984: Famous and award-winning "Where's the Beef?" ad campaign is run.
1986: James W. Near becomes president and COO and launches a major reorganization.
1989: Thomas begins another stint as advertising spokesperson; the Super Value Menu debuts.
1995: Wendy's International acquires Tim Horton's, a Canadian coffee and baked goods chain.
1997: The 5,000th Wendy's restaurant opens in Columbus, Ohio.
2002: Dave Thomas dies; Wendy's International acquires a 45 percent stake in Caf Express.
2002: Wendys Acquires Baja Fresh
2004: 35th Anniversary of Wendy's
2006 : Wendys Spins off Tim Horton and Sells Baja Fresh
1969: Dave Thomas opens the first Wendy's restaurant in downtown Columbus, Ohio
3/30/2009
EXISTING VISION STATEMENT

3/30/2009
Our vision is to be the

quality leader in everything
we do.
COMPANY PERSPECTIVES:
3/30/2009
Our guiding mission is to deliver superior quality products and services for our
customers and communities through leadership, innovation and partnerships.
Our organization has a strategic vision focused on these core values:

Quality: Freshly-made products and superior service are our passion; consistent
excellence is our goal.
Integrity: We keep our promises. All actions are guided by absolute honesty,
fairness and respect for every individual.
Leadership: We lead by example and encourage leadership qualities at all
levels. Everyone has a role to play.
People Focus: We believe our people are key to our success. We value all
members of our diverse family for their individual contributions and their team
achievements. Customer Satisfaction: Satisfying internal and external customers
is the focus of everything we do.
Continuous Improvement: Continuous improvement is how we think; innovative
change provides competitive opportunities.
Community Involvement: Giving back is our heritage. We actively participate
and invest in the communities where we do business.
Commitment to Stakeholders: We serve all stakeholders and, through
balancing our responsibilities to all, we maximize value to each of them.
WENDYS REVITALIZATION PAN
3/30/2009
WENDYS COMMITMENT TO
QUALITY
3/30/2009
2007 KEY ISSUES

3/30/2009
Largest institutional shareholder, Pelz,

attempting to force sale of Wendys to Trairc, also
owned by Pelz. Pelz also owns Arbys
Under shareholder pressure, sold Tim Hortons,
the number one brand in coffee and doughnuts
business even while it was attempting to
penetrate the breakfast fast food market.
Continue with revitalization plan and
commitment to quality?
NEW VISION STATEMENT

3/30/2009
Our vision is to become the

number one fast food restaurant
in the world.
10
MISSION STATEMENT
Customer
Products or services
Markets
Technology
Concern for survival, profitability, growth
Philosophy
Self-concept
Concern for public image
Concern for employees
1.
2.
3.
4.
5.
6.
7.
8.
9.
3/30/2009
Wendys believes the most important issue in the restaurant

business is to take care of our customers. (1) As a global company,
our goal is to provide our customers with the most enjoyable
dining experience possible and be the quality leader in everything
we do. (3, 7) Wendys has a long tradition of meeting everchanging consumer tastes and items. As we look ahead, we will
build on this tradition by bringing even greater variety, higher
quality, more nutritious foods along with fresher menu choices
into our restaurants. (2) Wendys strives to continuously produce
quality foods through food science technology and research. (4)
Our company is committed to expanding and growing profits in
order to sustain recognition while protecting the environment. (5,
8) Our philosophy is to provide for the needs of all our customers
while creating a safe workplace for all employees. (6,9)
11
3/30/2009
EXTERNAL
ASSESSMENT
12
GLOBAL INDUSTRY GROWTH
3/30/2009
13
US INDUSTRY GROWTH
3/30/2009
14
GLOBAL INDUSTRY VOLUME
3/30/2009
15
US INDUSTRY VOLUME
3/30/2009
16
GLOBAL SEGMENTATION BY TYPE
3/30/2009
17
US SEGMENTATION BY TYPE
3/30/2009
18
GLOBAL SEGMENTATION BY
LOCATION
3/30/2009
19
COMPETITIVE LANDSCAPE (US &

GLOBAL)
3/30/2009
20
Trademarks are property of respective brands
EXTERNAL AUDIT OPPORTUNITIES

3/30/2009
1. Burger King is closing more than 180 stores in 2006.

2. 53 percent of household income is spent eating outside of
the home.
3. The Canadian dollar is getting a stronger exchange rate
resulting in higher EPS from 0.11 in 2004 to 0.15 in 2005
4. Quick Service Restaurants sales have increased by 5
percent in 2006 according to the National Restaurant
Association.
5. Burger King's market share dropped from 15.03% in 2000
to 10.95% in 2006.
6. The US Department of Agriculture states that
consumption of eating out has risen 3.6 percent from 1990
to 2005
7. The breakfast food industry is a $77.6 billion industry.
8. McDonalds suffered an $8.5 million lawsuit and a
decrease in sales due to not informing customers of transfats in their cooking oils.
21
EXTERNAL AUDIT - THREATS

2.
McDonald's new management team is returning them to a sales growth

trend.
3.
60 percent of McDonalds are open 24 hours, worldwide.
4.
McDonald's menu is expanding to offer more upscale coffee, and better

quality chicken sandwiches
5.
Natural disasters are causing vegetables to be in short supply for

restaurant industry. When hurricanes Katrina and Rita hit the
southeast USA in August and September Wendys lost approximately
$25 million in sales.
6.
Burger King has invested $12 million in their United Kingdom

restaurants.
7.
Wendys has restaurants in only 20 international countries compared to

McDonalds and Burger King who have restaurants in 120 and 65
international countries respectively.
8.
Burger King plans to implement a dollar menu for breakfast items.
Where's the beef? A 12 percent increase in beef costs over 2005 reduced
Wendy's EPS by 0.07 cents
3/30/2009
1.
22
COMPETITIVE PROFILE MATRIX

Weight
Rating
MarketShare
Advertising
GlobalExpansion
ProductVariety
ProductQuality
CompanyImage
PriceCompetition
ManagementExperience
CustomerService
Philanthropy
CustomerLoyalty
FinancialPosition
0.15
0.13
0.12
0.10
0.08
0.07
0.04
0.06
0.07
0.05
0.08
0.05
2
2
1
4
1
2
3
2
3
2
2
3
TOTAL
1.00
Weighted
Score
0.30
0.26
0.12
0.40
0.08
0.14
0.12
0.12
0.21
0.10
0.16
0.15
2.16
Rating
4
3
4
3
3
3
3
3
2
4
3
3
Weighted
Score
0.60
0.39
0.48
0.30
0.24
0.21
0.12
0.18
0.14
0.20
0.24
0.15
3.25
Burger King
Rating
2
3
2
3
2
2
3
2
2
1
2
2
Weighted
Score
0.30
0.39
0.24
0.30
0.16
0.14
0.12
0.12
0.14
0.05
0.16
0.10
Critical Success Factors
McDonalds
3/30/2009
Wendys
2.22
23
EFE MATRIX
Key External Factors
Weighted Score
Opportunities
BurgerKingisclosingmorethan180storesin2006.
0.04
0.08
53percentofhouseholdincomeisspenteatingoutsideofthehome.
0.1
0.3
0.08
0.24
0.04
0.12
0.03
0.06
0.02
0.04
0.11
0.33
0.05
0.20
Where'sthebeef?A12percentincreaseinbeefcostsover2005reducedWendy'sEPSby
0.07cents
McDonald'snewmanagementteamisreturningthemtoasalesgrowthtrend.
0.04
0.12
60percentofMcDonaldsareopen24hours,worldwide.
0.05
0.05
0.06
0.18
0.07
0.07
0.09
0.18
0.05
0.05
0.07
0.28
0.10
1.00
0.30
2.60
TheCanadiandollarisgettingastrongerexchangerateresultinginhigherEPSfrom2004
to2005
QuickServiceRestaurantssaleshaveincreasedby5percentin2006accordingtothe
NationalRestaurantAssociation.
BurgerKing'smarketsharedroppedfrom15.03%in2000to10.95%in2006.
TheUSDepartmentofAgriculturestatesthatconsumptionofeatingouthasrisen3.6
percentfrom1990to2005
Thebreakfastfoodindustryisa$77.6billionindustry.
McDonaldssufferedan$8.5millionlawsuitandadecreaseinsalesduetonotinforming
customersoftrans-fatsintheircookingoils.
Threats
McDonald'smenuisexpandingtooffermoreupscalecoffee,andbetterqualitychicken
sandwiches
Naturaldisastersarecausingvegetablestobeinshortsupplyforrestaurantindustry.
WhenhurricanesKatrinaandRitahitthesouth-eastinAugustandSeptemberWendyslost
approximately$25millioninsales.
BurgerKinghasinvested$12millionintheirrestaurants.
Wendyshasrestaurantsinonly20internationalcountriescomparedtoMcDonaldsand
BurgerKingwhohaverestaurantsin120and65internationalcountriesrespectively.
BurgerKingplanstoimplementadollarmenuforbreakfastitems.
TOTAL
Rating
3/30/2009
Weight
24
3/30/2009
INTERNAL
ASSESSMENT
25
STOCK PERFORMANCE
3/30/2009
http://moneycentral.msn.com/investor/charts/chartdl.aspx?iax=1&Symbol=WEN
26
INCOME STATEMENT
3/30/2009
27
BALANCE SHEET
3/30/2009
28
SELECTED FINANCIAL RATIOS

Industry
7.50
-9.10
42.50
8.89
13.16
26.63
SP-500
8.30
16.00
6.60
13.34
20.14
10.00
23.9
126.3
15.4
0.83
2.52
10.10
24.8
30.4
13.0
2.10
3.02
5.40
21.9
25.9
7.4
2.38
3.39
10.60
20.7
5.1
3.5
20.7
5.5
31.0
12.1
8.1
30.5
12.3
33.8
17.5
12.4
33.5
16.8
3.6
8.5
11.7
5YrNetProfitMargin(5-YearAvg.)
Wendys
-0.10
133.80
41.40
3.53
-5.90
13.90
3/30/2009
Growth Rates %
Sales(Qtrvs.yearagoqtr)
NetIncome(YTDvs.YTD)
NetIncome(Qtrvs.yearagoqtr)
Sales(5-YearAnnualAvg.)
NetIncome(5-YearAnnualAvg.)
Dividends(5-YearAnnualAvg.)
Price Ratios
CurrentP/ERatio
P/ERatio5-YearHigh
P/ERatio5-YearLow
Price/SalesRatio
Price/BookValue
Price/CashFlowRatio
Profit Margins
GrossMargin
Pre-TaxMargin
NetProfitMargin
5YrGrossMargin(5-YearAvg.)
5YrPretaxMargin(5-YearAvg.)
29
SELECTED FINANCIAL RATIOS

0.71
1.1
1.0
5.0
2.2
9.20
0.69
0.4
0.4
13.9
1.7
3.58
1.19
0.9
0.7
43.3
4.0
16.25
9.5
4.5
5.5
5.6
3.1
3.7
15.1
4.0
5.4
11.1
3.1
4.3
20.8
5.8
7.7
14.5
5.1
6.8
NA
NA
31.2
59.0
1.3
3,150
48,925
29.9
34.5
0.7
37,696
343,930
9.5
5.6
0.6
Debt/EquityRatio
CurrentRatio
QuickRatio
InterestCoverage
LeverageRatio
BookValue/Share
Investment Returns %
ReturnOnEquity
ReturnOnAssets
ReturnOnCapital
ReturnOnEquity(5-YearAvg.)
ReturnOnAssets(5-YearAvg.)
ReturnOnCapital(5-YearAvg.)
3/30/2009
Financial Condition
Management Efficiency
Income/Employee
Revenue/Employee
ReceivableTurnover
InventoryTurnover
AssetTurnover
Adapted from www.moneycentral.msn.com
30
TREND ANALYSIS
12/07
12/06
01/06
01/05
12/03
Price/Sales
0.96
1.56
1.25
0.86
0.92
Book Value/
Share
$9.20
$10.57
$17.47
$15.26
$15.33
Price/Book
2.83
3.13
1.50
1.22
1.18
Debt/Equity
0.71
0.64
0.26
0.42
0.42
ROE
(%)
10.8
3.7
4.1
6.2
6.6
Net Profit Margin (%)

3.5
1.5
3.5
4.2
5.2
ROA
(%)
4.8
1.8
2.5
3.3
3.7
Interest
Coverage
3.5
1.1
4.1
5.1
5.3
Date
Avg. P/E
34.90
93.80
29.40
19.20
14.50
3/30/2009
Date
12/07
12/06
01/06
01/05
12/03
31
NET WORTH ANALYSIS

3/30/2009
Net Worth Analysis (February 2007 in millions)

$1,096
$470
$2,162
$2,001
$1,432
1.StockholdersEquity+Goodwill=1,011+85
2.Netincomex5=$94x5=
3.Shareprice=$23/EPS1.00=$23xNetIncome$94=
4.NumberofSharesOutstandingxSharePrice=87x$23=
Method Average
32
INTERNAL AUDIT -STRENGTHS

3/30/2009
1. First to introduce non-trans-fat French fries.

2. Improved goodwill from $19 million to $36 million.
3. Owns and operates 2 bakeries as apart of their vertical
integration strategy.
4. Maintains industry-leading customer satisfaction scores.
5. World's #3 fast food chain controlling 14% of the fast-food
market share.
6. 417 new restaurants in the US & Canada.
7. With healthier food selections such as salads, Wendys
same-store sales rose 4.7%.
8. 1st to offer the 99 cent value menu.
9. Wendys Frescata product line increased sales by 3.2%.
10. The acquisition of Tim Hortons restaurants increased
Wendys revenue 31%.
33
INTERNAL AUDIT - WEAKNESS

3/30/2009
1. Failed marketing strategy led to sales dip in 2005.

2. Last to accommodate changing customer preferences
by introducing new products.
3. "The Chili Finger" incident drops sales by 2.5% in
2005.
4. Last food-chain to offer a breakfast menu.
5. Wendy's current strategy only focuses on US &
Canada.
6. Tim Horton's 50/50 joint venture causes 50% drop in
income from Tim Horton's.
7. Since the passing of Dave Thomas in 2002, Wendy's
lost their opinion leader who helped to create
"TOMA."
34
IFE MATRIX
Rating
Weighted
Score
0.08
0.07
4
3
0.32
0.21
0.09
0.36
0.05
0.20
0.02
0.01
3
3
0.06
0.03
0.1
0.05
4
4
0.40
0.20
0.02
0.06
0.03
0.12
0.08
0.08
0.05
0.10
0.1
0.04
0.06
1
2
1
0.10
0.08
0.06
0.07
0.14
0.08
1.00
0.08
2.60
Strengths
Firsttointroducenon-trans-fatFrenchfries.
Improvedgoodwillfrom$19millionto$36million.
Ownsandoperates2bakeriesasapartoftheirverticalintegrationstrategy.
Maintainedindustry-leadingcustomersatisfactionscores.
World's#3fastfoodchaincontrolling14percentofthefast-foodmarket
share.
417newrestaurantsinthe&.
Withhealthierfoodselectionssuchassalads,Wendyssame-storesalesrose
4.7percent.
1sttoofferthe99centvaluemenu.
WendysFrescataproductlineincreasedsalesby3.2%.
TheacquisitionofTimHortonsrestaurantsincreasedWendysrevenueby
31percent.
Weaknesses
Failedmarketingstrategyledtosalesdipin2005.
Lasttoaccommodatechangingcustomerpreferencesbyintroducingnew
products.
"TheChiliFinger"incidentdropssalesby2.5percentin2005.
Lastfood-chaintoofferabreakfastmenu.
Wendy'scurrentstrategyonlyfocusesonUS&.
TimHorton's50/50jointventurecauses50percentdropinincomefrom
TimHorton's.
SincethepassingofDaveThomasin2002,Wendy'slosttheiropinion
leaderwhohelpedtocreate"TOMA."
TOTAL
Weight
3/30/2009
Key Internal Factors
35
3/30/2009
STRATEGIC
FORMULATION
36
SWOT MATRIX
Expand research and development
function, strategic insights, and
operations innovation by 25 percent
(S1, O4).
Introduce a full menu and a 99 cent

super value menu for breakfast in all
restaurants in order to capitalize on
$77 billion breakfast industry (W4,O7).
Open 200 new Wendys franchises

stores in the US and Canada to gain
market share in the fast food industry
(S6, O5).
Wendy Thomas will become the new

opinion leader for Wendys and create
TOMA and help generate sales in the
breakfast industry (W7, O7).
Display on all food packaging and in all

restaurants that we use non-trans fat
oils to cook our foods (S1, O8).
Wendys will take advantage of the fact

that 53 percent of household income is
spent eating outside the home to
increase sales of their foods (W1, O2).
Launch a direct marketing campaign
for Wendys new breakfast menu (W1,
O8).
WO Strategies
3/30/2009
SO Strategies
37
SWOT MATRIX
Implement a full breakfast menu

and a 99 cents breakfast menu in
all their restaurants (S8, T8).
Backward integrate: Acquire a farm

that main crop is vegetables
specifically lettuce, onion, and
tomato
By implementing longer operating

hours such as 24 hour
restaurants, Wendys will improve
customer convenience and
satisfaction (S4, T3).
Expand global operations by 40

percent over next three years (W5,
T7).
Continue to focus on providing

customers healthier food options
and not just expanding the menu
(S7, T4).
Expand the research and

development function, strategic
insights, and operations innovation
(W1, W2, T2).
WT Strategies
3/30/2009
ST Strategies
38
SPACE MATRIX
3/30/2009
Competitive Advantage (CA) Average
Financial Strength (FS)

Return on Assets (ROA)
Leverage
Net Income
Income/Employee
Inventory Turnover
Financial Strength (FS) Average
-2
-2
-2
-3
-2
-2.2
4
3
3
3
6
3.8
Industry Strength (IS)

Growth Potential
Financial Stability
Ease of Entry into Market
Resource Utilization
Profit Potential
Industry Strength (IS) Average
Environmental Stability (ES)

Rate of Inflation
Technological Changes
Price Elasticity of Demand
Competitive Pressure
Barriers to Entry into Market
Environmental Stability (ES) Average
x-axis: -2.2 + 4.6 = 2.4

y-axis: 3.8 + -2.8 = 1.0
5
5
3
5
5
4.6
Competitive Advantage (CA)

Market Share
Product Quality
Customer Loyalty
Technological know-how
Control over Suppliers and Distributors
-2
-1
-2
-6
-3
-2.8
39
GRAND STRATEGY MATRIX
3/30/2009
40
BCG MATRIX
Two Possible Divisional Analysis Vectors
No difference in Growth rates or Market share by location
Store
ownership
All stores whether they are owned by the company or by

franchisees compete in the same market
No value in producing a BCG matrix
Wendys is somewhere between a Question Mark

and a Star
Geographic
3/30/2009
41
IE MATRIX
EFE
Scores
Weak
1-1.99
II
III
IV
VI
VII
VIII
IX
Medium
2-2.99
Low
1-1.99
High
3-4
Strong
3-4
3/30/2009
Hold and Maintain
IFE Scores
Average
2-2.99
42
MATRIX ANALYSIS
7-Apr-08
2008, Tony Gauvin, UMFK
43
POSSIBLE STRATEGIES
Market
penetration, product development & related

diversification
Expand the research and development functions,

strategic insights and operation innovation
Product development & diversification
Promote a healthier menu for Breakfast, Meals

and late night snacks
7-Apr-08
44
QSPM
Strategic Alternatives
Key Internal Factors
Promote a
healthier menu.
Weight
AS
4.00
TAS
0.32
AS
2.00
TAS
0.07
----
----
----
----
0.09
----
----
----
----
0.05
2.00
0.10
4.00
0.20
0.02
0.01
-------
-------
-------
-------
0.1
0.05
4.00
2.00
0.40
0.10
3.00
3.00
0.30
0.15
0.02
4.00
0.32
2.00
0.16
0.03
----
----
----
----
0.16
Ownsandoperates2bakeriesasapartoftheirverticalintegrationstrategy.
Maintainedindustry-leadingcustomersatisfactionscores.
World's#3fastfoodchaincontrolling14percentofthefast-foodmarket
share.
417newrestaurantsinthe&.
Withhealthierfoodselectionssuchassalads,Wendyssame-storesales
rose4.7percent.
1sttoofferthe99centvaluemenu.
WendysFrescataproductlineincreasedsalesby3.2percent.
TheacquisitionofTimHortonsrestaurantsincreasedWendysrevenueby
31percent.
Weaknesses
Failedmarketingstrategyledtosalesdipin2005.
0.08
----
----
----
----
Lasttoaccommodatechangingcustomerpreferencesbyintroducingnew
products.
"TheChiliFinger"incidentdropssalesby2.5percentin2005.
0.05
3.00
0.15
4.00
0.20
Lastfood-chaintoofferabreakfastmenu.
Wendy'scurrentstrategyonlyfocusesonUS&.
TimHorton's50/50jointventurecauses50percentdropinincomefrom
TimHorton's.
SincethepassingofDaveThomasin2002,Wendy'slosttheiropinion
leaderwhohelpedtocreate"TOMA."
SUBTOTAL
0.1
0.04
0.06
---2.00
----
---0.08
----
---3.00
----
---0.12
----
0.07
----
----
----
----
0.08
1.00
----
---1.15
----
---1.13
0.08
3/30/2009
Strengths
Firsttointroducenon-trans-fatFrenchfries.
Improvedgoodwillfrom$19millionto$36million.

insights, and operations
innovation.
45
QSPM
Promote a healthier
menu.
Weight
0.04
53percentofhouseholdincomeisspenteatingoutsideofthehome.
0.1
TheCanadiandollarisgettingastrongerexchangerateresultinginhigherEPSfrom2004to2005
0.08
QuickServiceRestaurantssaleshaveincreasedby5percentin2006accordingtotheNational
RestaurantAssociation.
BurgerKing'smarketsharedroppedfrom15.03%in2000to10.95%in2006.
0.04
TheUSDepartmentofAgriculturestatesthatconsumptionofeatingouthasrisen3.6percentfrom
1990to2005
Thebreakfastfoodindustryisa$77.6billion.
McDonaldssufferedan$8.5millionlawsuitandadecreaseinsalesduetonotinformingcustomersof
trans-fatsintheircookingoils.
Threats
Where'sthebeef?A12percentincreaseinbeefcostsover2005reducedWendy'sEPSby0.07cents
AS
TAS
AS
TAS
---2.00
----
---0.20
----
---3.00
----
---0.30
----
0.03
-------
-------
-------
-------
0.02
0.11
-------
-------
-------
-------
0.05
3.00
0.15
4.00
0.20
0.04
0.24
---0.10
2.00
---3.00
0.16
---0.15
McDonald'snewmanagementteamisreturningthemtoasalesgrowthtrend.
0.05
60percentofMcDonaldsareopen24hours,worldwide.
0.06
3.00
---2.00
McDonald'smenuisexpandingtooffermoreupscalecoffee,andbetterqualitychickensandwiches
0.07
2.00
0.14
4.00
0.28
Naturaldisastersarecausingvegetablestobeinshortsupplyforrestaurantindustry.Whenhurricanes
KatrinaandRitahitthesoutheastinAugustandSeptemberWendyslostapproximately$25millionin
sales.
0.09
BurgerKinghasinvested$12millionintheirrestaurants.
0.05
-------
-------
-------
-------
4.00
----
0.36
----
3.00
----
0.27
----
Wendyshasrestaurantsinonly20internationalcountriescomparedtoMcDonaldsandBurgerKing
whohaverestaurantsin120and65internationalcountriesrespectively.
BurgerKingplanstoimplementadollarmenuforbreakfastitems.
0.07
0.10
SUBTOTAL
1.13
1.27
SUM TOTAL ATTRACTIVENESS SCORE
2.28
2.40
Opportunities
BurgerKingisclosingmorethan180storesin2006.

insights, and operations
innovation.
3/30/2009
Key External Factors
46
3/30/2009
FUTURE PLANS
NEW
47
OBJECTIVES
Increase
Market Share
Grow franchise ownership
Quality control through backwards integration and
process managemenat
Expand meal and food offerings
Objectives listed in 2006 Revitalization plan and

Commitment to Quality still apply for the next
three years
3/30/2009
48
RECOMMENDATIONS
Total Cost = $50,000,000
Promote a healthier menu and these changes will

increase Wendy's sales.
$10,000,000
Expand the research and development function,
strategic insights, and operations innovation by 25
percent.
$15,000,000
Introduce a full menu and a $.99 menu for breakfast
in all restaurants in order to capitalize on the $77.6
billion breakfast industry.
$5,000,000
Acquire a farm that's main crop is vegetables, which
will allow Wendys to offer vegetarian items, eliminate
the cost and reduce the risk of vegetable shortage.
$20,000,000
3/30/2009
49
3/30/2009
IMPLEMENTATION
50
EPS/EBIT ANALYSIS
Stock Price: $23

Tax Rate: 35%
Interest Rate: 7%
# Shares Outstanding: 87M
# Shares Needed: 1,173,913
$ Amount Needed: 50M
3/30/2009
51
OTHERS ISSUES
Labor Turnover
training
Quality training
What about the Internet??

Can
we use it?
Cultural issues with International Stores

Where to locate
Management
3/30/2009
Where
the others fats food restaurants exist

Near high traffic locations
Public relations
52
3/30/2009
EVALUATION
53
EVALUATION MATRIX
Kaplan and Nortons Balanced Score Card
Financial
improvement
Customer
Operations
Employees
Annual Reports
Financial
Continuous
3/30/2009
Independent Analysis
Market
share
Brand awareness
http://www.qualitysolutions.com/images/balance.jpg
54
Area of Objectives
Measure or Target
Time Expectation
Primary Responsibility
Customers
1
Satisfaction
Customer Survey results
Yearly
Marketing Department
Brand Identity
Industry Reports
Yearly
Marketing Department
Employees
1
Quality training
# TQM session
Yearly
COO
Employee Satisfaction
Survey
Yearly
Human resources
Operations/Processes
1
Productivity
Sales/man-hour increase 5%
Quarterly
COO
Quality
# Defective/stale products reduced 1%
Quarterly
COO
# of recyclable containers
Quarterly
COO
# of ethics training sessions
Yearly
Human resources
1 Sales and expenses reports
2% sales increase
1% expense reduction
Quarterly
CFO
better than Industry Avg,
Yearly
CFO
Business Ethics/Natural Environment

1
Waste reduction
2 Ethics Training
Financial
Ratio analysis
Income
and revenues are down
McDonalds and Burger King revenues are up
Began rollout of breakfast menu with lukewarm

results
Maintainsed 3RD Place in Market share
Pelzs Triarc buys out Wendys for $2.34 billion in
stock swap in April of 2008
Combine
Stock prices continue to fall through 2007 and

2008
30-Mar-2009
2008 UPDATE
with Arbys to form Wendys Arbys Group
http://www.wendysarbys.com/
Maintained
as separate Brands
56
INFORMATION SOURCES
International Directory of Company Histories, Vol. 47. St. James Press,
2002.
Graphics from www.wendys.com
Wendys International, Inc Form 10-K Sec filing for 2007
Wendys International- 2007 Case Notes by Forest David of Francais

Marion University
Datamonitor
Global Fast Food Industry Profile 2008
US Fast Food Industry Profile 2008
Wendys International, Inc. Company Profile 2008
3/30/2009
Value Line Investment Surveys

Restaurant Industry 2009
Wendys Arbys 2009
Analyst reports
TheStreet.com
CL King & Associates
57

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3/30/2009

Strategic Management Case Study

Tony Gauvin, UMFK, 2009

Strengths and weaknesses

Strategic Plan for the Future

Tony Gauvin, UMFK, 2009

A Brief history of Wendys

Wendys 2008 Update

KEY FACTS 2007

709 International Stores in 20 countries

140 company owned

3rd largest hamburger fast food chain

Tony Gauvin, UMFK, 2009

1972: Wendy's franchising begins.

1975: First international restaurant opens in Canada.

1976: Wendy's International, Inc. goes public

1977: Company begins national television advertising.

1978: The 1,000th Wendy's opens in Springfield, Tennessee.

1979: Salad bars are added to Wendy's restaurants.

1981: Thomas makes his first appearance as Wendy's advertising spokesperson.

1984: Famous and award-winning "Where's the Beef?" ad campaign is run.

1997: The 5,000th Wendy's restaurant opens in Columbus, Ohio.

2002: Wendys Acquires Baja Fresh

2004: 35th Anniversary of Wendy's

Tony Gauvin, UMFK, 2009

EXISTING VISION STATEMENT

Our vision is to be the

Tony Gauvin, UMFK, 2009

Our organization has a strategic vision focused on these core values:

WENDYS REVITALIZATION PAN

2007 KEY ISSUES

Largest institutional shareholder, Pelz,

NEW VISION STATEMENT

Our vision is to become the

Tony Gauvin, UMFK, 2009

Wendys believes the most important issue in the restaurant

GLOBAL INDUSTRY GROWTH

GLOBAL INDUSTRY VOLUME

GLOBAL SEGMENTATION BY TYPE

COMPETITIVE LANDSCAPE (US &

EXTERNAL AUDIT OPPORTUNITIES

1. Burger King is closing more than 180 stores in 2006.

EXTERNAL AUDIT - THREATS

McDonald's new management team is returning them to a sales growth

60 percent of McDonalds are open 24 hours, worldwide.

McDonald's menu is expanding to offer more upscale coffee, and better

Natural disasters are causing vegetables to be in short supply for

Burger King has invested $12 million in their United Kingdom

Wendys has restaurants in only 20 international countries compared to

Burger King plans to implement a dollar menu for breakfast items.

Tony Gauvin, UMFK, 2009

COMPETITIVE PROFILE MATRIX

Tony Gauvin, UMFK, 2009

Critical Success Factors

Key External Factors

Tony Gauvin, UMFK, 2009

SELECTED FINANCIAL RATIOS

Tony Gauvin, UMFK, 2009

SELECTED FINANCIAL RATIOS

Tony Gauvin, UMFK, 2009

Adapted from www.moneycentral.msn.com

Net Profit Margin (%)

Tony Gauvin, UMFK, 2009

NET WORTH ANALYSIS