Chick-Fil-A is the largest American fast-food restaurant that specializes in chicken sandwiches and is also among the leading fast-food chains in America. It operates 2,836 restaurants across the USA. The company’s values are based on Christian religious beliefs. This SWOT analysis gives an analysis of the internal as well as the external strategic position of the brand: its strengths, weaknesses, opportunities, and threats.
Chick-Fil-A at a Glance
| Name | Chick-fil-A |
| Website | https://www.chick-fil-a.com/ |
| Founders | S. Truett Cathy |
| Chief Executive Officer (C.E.O.) | Dan Cathy |
| Headquarters | Atlanta, Georgia, USA |
| Year Founded | May 23, 1946 |
| Type of company | Fast food franchises |
| Revenues (FY 2021) | USD 5.8 billion |
| Key Products/Services | Restaurant |
| Key Competitors | McDonald’s, Starbucks |
Strengths
Strong customer satisfaction ratings
Chick-Fil-A boasts unmatched customer service. For eight consecutive years, the American Customer Satisfaction Index yearly ranking has had Chick-Fil-A top the list of best chain restaurants with full service, thus outperforming fast food legendries like McDonald’s. The brand came in 1st with a customer rating of 83%. The brand holds the customer-first mantra with strong conviction; they are consistently respectful of their clients, treating them with warmth, thus making them feel welcome and at home.
Strong business model/strategy
Chick-Fil-A chooses to focus on a small menu and great customer service. This strategy has helped the brand to the many other fast food restaurants in America that have a broad menu in a bid to attract more customers. The brand has focused on chicken sandwiches with the ‘A’ in the name referring to grade A top quality chicken sandwiches. And additionally, the critical focus on customer satisfaction has kept customers cool even in lengthy cues to get their chicken sandwiches. The company has reaped massive growth in this strategy.
Strong financial performance
With regards to profitability, Chick-fil-A stores in various locations have significantly outperformed their competitors. While Chick-fil-A’s annual sales average roughly $4.5 million annually, a similar McDonald’s location averages at $2.9 million. In 2022, the brand recorded an impressive $16 billion in 2022; this was up from $5.8 billion in sales in 20212. Strong financial performance boosts a brand’s creditworthiness and ensures the brand has the necessary financial muscle that is needed for its growth, expansion, and for healthy sales turnover.
Strong brand recognition and brand loyalty
Given the brand’s top performance for the last 8 years, the brand has become recognized and known by many as one of top-notch quality and top customer service throughout America with particular excellence in sincerity, competence, excitement, sophistication, and ruggedness. This strong brand recognition makes it the brand of choice for many who remain familiar with it and an attraction for many who are not familiar with it. The brand is able to reap from network effects; this could explain its consistent massive growth.
Rigorous franchising model
Chick-Fil-A has retained ownership of each of its restaurants. It selects the location, builds the store, hand picks every operator, rigorously interviews and trains the operator even for months on end through a no-so-easy process. In the end, the operator only needs approximately $10,000 to start the franchise business. This has ensured the brand retains a tight rein on the quality of both its product and the desired customer satisfaction standards.
Strong brand culture
The brand’s official statement of corporate purpose states that the business exists to “glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-Fil-A.” Further, the brand’s belief is in treating every person with dignity, honor, and respect irrespective of their belief, creed, race, gender, or sexual orientation. This strong belief and culture explain the strong customer satisfaction rates; everyone wants to be treated with dignity, honor, and respect. Customers repeatedly say they feel warm and welcomed in Chick-Fil-A restaurants and always want to go back.
Weaknesses
Exposure to ‘Single point of failure risk
A single point of failure refers to the risk that if Chick-Fil-A’s operations in the USA market are adversely affected, then the entire brand risks failure. If the brand had operations in other markets, then a failure in the USA market would not affect the brand operations in other countries; this would cushion the brand’s longevity and have its continue operations in other countries. The brand is encouraged to have operations in multiple markets to avert such risks.
Limited revenues
While the brand’s earnings are very competitive, the brand is denied further earnings by virtue of its business model that limits its operations to the USA and as well limits its cuisine to chicken-only sandwiches and products. If the brand expands to other emerging markets and also diversifies its product portfolio in its primary market to include other savory dishes, then there are chances that its revenue streams will increase.
Opportunities
Global expansion
The brand has a great opportunity for global expansion, particularly in emerging markets. As it is, the brand’s product is doing excellently well in the USA. The brand has great opportunities to replicate its business in emerging markets as well as similar well-established markets. New emerging markets offer access to new talent pools, increased revenue potentials, new customer bases, competitive advantages like being the first entrant in new markets, and the ability to diversify economic bases. great opportunities for diversification and growth for posterity. It includes the advantages of gaining access to new talent pools, reduction of costs, particularly in areas where there is cheap labor and cheap raw materials,
Threats
Stiff competition
The brand faces stiff competition from brands from major players in the industry, like McDonald’s, KFC, Burger King, Taco Bell, Subway, and Chipotle, among others.
Lawsuits for strong religious stand
Chick-fil-A holds strong religious views that have formed the basis for their operations. And while this foundation has propelled the brand to offer the most exceptional service, its Christian stand against such practices as lesbianism and homosexuality has led the brand into controversies. Such controversies would not only harm the brand’s reputation but would lead to law suites given such groups are protected by law. The brand needs to continue upholding its values but, at the same time, find ways of serving equally such groups of people.
Conclusion
Chick-fil-A is a strong, admirable brand in all respects. The horizon is still the limit for this brand; there are a lot of untapped opportunities for this brand to grow even much higher in markets and in revenue bases. They need to keep on strengthening their strengths to continue keeping competition at bay.
