Chick-Fil-A is one of the most profitable fast-food franchises, with over 2,796 restaurants, making over $4 million a year.
What is the secret behind such massive success, and what fuels its almost relentless growth? This SWOT analysis delves into the merits and demerits of the company’s structure and how it sustains growth.
What Is Chick-Fil-A SWOT Analysis In 2023?
Chick-Fil-A’s success depends on an excellent product and unmatched customer service as of 2023. These help it carve out and sustain an increasingly larger market share. Among its weaknesses is premising the business on a faith-based belief system. There is a growth opportunity, especially in the prospering new world. Its most significant threat is increasing competition.
Stay with me to learn more about Chick-Fil-A’s strengths, weaknesses, opportunities, and threats to survival and prosperity!
What Are Chick-Fil-A’s Strengths?
Chick-Fil-A has been able to assure survival and increase prosperity even in adverse circumstances, both internal and external.
That said, this is due to the strengths inherent in its business model and structure, which include the following:
- Excellent product offering
- Unmatched customer service
- Motivated staff
- Strong financial position
1. Excellent Product Offering
Chick-Fil-A offers its customers a product they cannot get enough of, and the evidence is in the lines that go around the building every day and the ever-increasing gross revenue.
Also, there is enough variety to cater for breakfast, lunch, dessert, and hot and cold beverages. Moreover, there are sauces and salad dressings in their diversity.
Further, healthy eating enthusiasts have their vegetarian and Keto diets. With that, the variety is large enough to cater to the most popular needs but small enough not to hinder efficiency.
Additionally, customers love the food’s great taste. Therefore, the restaurant was able to spur itself to fame based on its original fried chicken sandwich and Chick-Fil-A sauce.
2. Unmatched Customer Service
Chick-Fil-A backs its delicious food with famously polite and personable customer service. For example, the employees both declare and show their pleasure in serving the customer.
However long the lines are, Chick-Fil-A makes sure it has sufficient staff at hand to keep it moving quickly.
Moreover, the restaurant encourages customers to use the mobile app to order so that the wait time is reduced even further.
As you can see, most customers are kept around by the certainty of friendly and quick service.
3. Motivated Staff
Chick-Fil-A recognizes that its employees are an integral part of its strength and endeavors to make them feel part of the success process.
Indeed, the company refers to its employees as team members and tries to make the workplace enjoyable.
For instance, the restaurants close on Sundays to give the employees rest and observe a day of worship.
Also, Chick-Fil-A pays higher than average wages and encourages personal development through education opportunities and scholarships.
Further, there are career growth opportunities within the company and may give former employees preference when applying for the hard-to-get franchise.
4. Strong Financial Position
Chick-Fil-A is in such a robust financial position that it can fund expansion projects without seeking public capital in an IPO.
Also, its restaurants are some of the most profitable, and because of the small number of owners, making financial decisions is easier than it is with competitors.
Chick-Fil-A’s weaknesses are primarily structural and result in the business’s ability to take timely advantage of opportunities or react quickly to avoid catastrophe.
Further, some weaknesses put it in harm’s way, necessitating the diversion of resources to deal with the fallout.
That said, these weaknesses include:
- Homophobic policies
- Inability to effectively deal with the very long queues
- Excessive control over franchises
- Lack of diversity in the target customer
1. Homophobic Policies
Chick-Fil-A’s Christian principles have helped guide it to its present success but may now hinder a changing world, especially its stance on LGBTQ relations.
In choosing its operators, the company is careful to pick those in a traditional marriage setup and preference those who have attended marital seminars.
As a result, the company has been accused of covertly sponsoring anti-LGBTQ agendas by financing charitable organizations openly against same-sex relations.
That said, these have resulted in charges of homophobia and protests against the company.
Though it is yet to affect the bottom line, the CEO has seen it wise to dissociate the company from such perceptions since it can alienate some customers.
2. Inability To Deal With The Very Long Queues
Queues around Chick-Fil-A restaurants at peak times indicate booming business and reveal a flaw that, unless addressed, may lead to a slow but sure hemorrhage of customers.
For example, long wait times turn away customers since about 30% of customers still drive away before they get to the window despite increased staffing and encouragement to order online.
Therefore, since Chick-Fil-A does not like having restaurants close to each other, the chances are that these customers are lost to competitors.
3. Excessive Control Over Franchises
To buy a Chick-Fil-A franchise, one only needs a nominal $10,000, and the company foots the rest of the bill. But this comes with a catch.
For example, the company exercises so much control over the franchise that the designation of the operator rather than ‘owner’ is not altogether inaccurate.
Moreover, this has enabled the company to impose its Christian values over the franchises and helped them turn a profit overall.
However, the danger is that the operators lack the capacity to respond effectively to business emergencies, primarily if they are localized.
Also, the person who makes the decisions may be more out of touch with local reality than the operator.
4. Lack Of Diversity In The Target Customer
The typical Chick-Fil-A customer tends to be white, suburban with a higher than average income between 45 to 54 years old.
With that, this demographic cannot be relied on to drive growth since it cannot get any larger; all it can do is shrink.
Further, the strategies that work with this age group are hopelessly ineffective with the demographic upon which future growth can legitimately be premised.
Also, Chick-Fil-A locks out so many customers by charging them high prices only this target group can afford.
Chick-Fil-A’s growth has been phenomenal in the recent past and is still projected to grow even more. That said, it is estimated that it can hit or even exceed revenues of $30 billion a year.
Moreover, opportunities for this growth lie in the following areas:
- Expansion within the Unites States
- Expansion abroad
- Expansion into a more youthful market
- Innovative menu
1. Expansion Within The United States
The company can expand geographically within the United States.
Even though it is outstripping its significant competitors in revenue earned, some still outstrip it in the number and distribution of outlets.
2. Expansion Internationally
Chick-Fil-A may also choose to go international to the rest of the Americas and Europe, where some of its compatriots have made significant gains.
Additionally, it may expand into the new world, where a burgeoning middle class is hungry for products formerly confined to the first world.
3. Expansion Into A More Youthful Market
Rather than go abroad or open new outlets at home, Chick-Fil-A can expand into a more youthful demographic by adjusting its offerings and the prices.
4. Innovative Menu
A more innovative menu catering to the health-conscious trend would capture the lucrative and expanding young market.
The following are the threats to Chick-Fil-A in its bid to survive and thrive in the cutthroat fast food industry:
- Changing consumption trends
- Supply bottlenecks
Differentiation in the fast-food industry is complex, making it harder to compete.
For example, most competitors have tried to replicate products as good as Chick-Fil-A’s or do even better and set up not far from its restaurants.
Also, the competitors have upped their customer service game and instituted measures to lock in customers.
2. Changing Consumption Trends
There are changes to fast-food consumption trends among the younger population and even among Chick-Fil-A’s traditional customers.
That said, fast-food has long been associated with lifestyle diseases to which older people are more susceptible.
As a result, more people are keeping away from the food products Chick-Fil-A specializes in, and even the government is more willing to control the fast-food industry.
So, unless Chick-Fil-A can focus on adjusting its product offering, this may affect its ability to thrive in the long run.
3. Supply Bottlenecks
Chick-Fil-A is particularly vulnerable to supply bottlenecks for a restaurant that prides itself on offering food made from the freshest ingredients.
A supply clog of only a few days, let alone weeks, is enough to affect the restaurant’s ability to deliver on its promise of fresh food and may turn away some customers.
To learn more, you can also read our posts on the Chick-Fil-A business model, why is Chick-Fil-A so popular, and why is Chick-Fil-A so expensive.
Chick-Fil-A is in a solid position to take advantage of whatever opportunities to spur growth and prosperity.
However, it must be wary of its weaknesses and the threats in its commercial environment that may hamper its growth.