4. Do you think Five Guys will be as successful outside the United States as it has been in its home market? Why or why not?

148 CHAPTER 4 Internal Analysis: Resources, Capabilities, and Core Competencies CHAPTERCASE 4 Part II TO STAND OUT IN A saturated burger market dominated by such giants as McDonald's and Burger King, Five Guys pur- sues a differentiation strategy that helps it to create a higher perceived value among its customers. One key differentiating feature is its product: Each Five Guys burger is made from never-frozen ground beef nestled atop a toasted, freshly baked bun. Each burger is also made to order and can be customized with any of 15 toppings-all of which can be added free of charge. Its fries are hand-cut and sourced from Idaho potatoes grown north of the 42nd parallel and cooked in pure peanut oil. Another key feature is its streamlined menu: burgers, fries, and hotdogs-no salads, no wraps, no desserts. High(est) quality and consistency are extremely impor- tant to Five Guys. To ensure these standards are regularly met, it conducts two third-party audits in each of its 1,500 stores weekly to ensure the food is always fresh and the stores are always clean. The money that Five Guys does not spend on marketing is, instead, spent on its staff: Bonuses are awarded to the teams that score the highest on these audits. Each week a winning team receives a bonus of about $1,000, which is then split among the team's five or six members. About 200 teams make the cut, receiving the bonus. The way Five Guys motivates its staff also differentiates it from other competitors in the industry, who tend to just pay (minimum) hourly wages. Although Five Guys' food tastes great and provides emotional comfort to many of its patrons, in recent years, especially with the increased concern about obesity and related health complications, Five Guys has landed on the list of U.S. chain restaurants that offer the most unhealthy meals. A standard bacon cheeseburger has close to 1,000 calories and a large order of fries has about 1,500. As a consequence, Five Guys food offerings have been criticized by watchdogs such as the Center for Science in the Public Interest. With the new focus on healthy eating, many res- taurant chains such as Chipotle have come up with health- ier options that include more low-calorie meals and fresh produce. Five Guys' commitment to the delivery of quality foods using fresh ingredients, simple menus, and classic flavors has allowed it to thrive for more than 30 years in a highly com- petitive market, with 1,500 stores as of 2019 and another 1,500 locations in development. With all the regional fran- chises in the United States sold out, the company is focusing on international expansion.55 Questions 1. Why is Five Guys so successful? Describe Five Guys' core competency, explain how the company built it, and why it is essential to its success. 2. Five Guys' success led to imitation attempts by more recent entries in the fast-casual "better burger" segment of the restaurant industry such as BurgerFi, Shake Shack, and Smashburger. Do you think these new entrants are competitive threats to Five Guys? Why, or why not? If you think they are competitive threats, what should Five Guys do about it, if any- thing? Explain. 3. Do you think a trend toward more healthy eating is a threat to Five Guys? If so, what could the company do about it? For example, should the company change its menu to include healthier choices, or should it continue with what made Five Guys so successful? Why, or why not? Use Exhibit 4.11 to discuss your responses. 4. Do you think Five Guys will be as successful outside the United States as it has been in its home market? Why or why not