Company Strategies Buffalo Wild Wings is a company whose main functions include dining restaurants and a sports bar located in the U. S and Canada. This company is publicly traded as NASDAQ: BWLD in the American stock market. Since Buffalo Wild Wings was founded in 1982, it has been experiencing a steady growth in spite of stiff competition in the American market. To beat this competition, the business applied a series of strategies that have ensured that it remains in business in spite of the unpredictability of the American market. Specifically, the company applied business, functional, and corporate strategies in its mode of doing business. Business strategy Throughout its 925 branches, the company has managed to establish its brand through coordinated operational and marketing execution programs, which helps in ensuring brand recognition by the customers in the target markets as well as the quality of consistence.
Such programs incorporate marketing programs in addition to advertising to support both franchised restaurants and company owned restaurants. In branding the company’s products, Buffalo Wild Wings uses its buffalo insignia in addition to both black and yellow colors.
This strategy coincides with the organization’s goal, which is to continue growing, and developing its grill and bar concepts to make the company a leading national restaurant chain. Buffalo Wild Wings’ business strategy also incorporates developing and increasing its market share by establishing new restaurants in existing and new markets. Additionally, so as to appeal to the customers, the company also incorporates a range of products that includes offering of broad appeal boldly-flavored menu items. Furthermore, since the company values its customers, its business strategy also includes creating a neighborhood as well as an inviting atmosphere.
This involves enabling the guests to customize their dining experiences (Dunne, Robert and James 173). Functional strategy On the other hand, Buffalo Wild Wings’ functional strategy mostly focuses on its ability to increase its same-table sales instead of turning the table sales as fast as possible, which is what many businesses usually do. While most businesses in the same industry aim at establishing high able turnover rates for higher sales volume, Buffalo Wild Wings uses a better and a more creative way of trying to boost the volume of same table orders.
This functional strategy is very effective especially during sporting events mostly because of their wide range of affordable appetizers along with additional menu offerings. This is one of the focal points that support the functional strategy adopted by Buffalo Wild Wings. Furthermore, the company also concentrates more on looking for franchise partners in new markets, which may be identified as possible areas of expansion. This reduces the risks associated with entering new markets ensuring that most of the risk is allocated to the franchisee (Sherman 272).
The possibility of establishing a company owned restaurant in the projected market depends on the success of its performance while working with the partners. This implies that another important operational strategy involves lowering the risks involved in expanding the business into unfamiliar markets. This has been very effective in ensuring that the company has significantly low restaurant closures and relocations, which usually happen due to negative market response. This is in turn the result of not having the required information when entering a market.
Buffalo Wild Wings’ concept of business is further cemented by its stringent operation guidelines as well as comprehensive human resource development in both franchised and company owned restaurants. One of the company’s most effective strategies has been developing its employees’ capabilities mostly through on-the-job training method to ensure their high performance, which is reflected in the overall performance of the organization. Buffalo Wild Wings’ on-the-job training is accomplished through the program known as Wing Certified Trainer, which utilizes both hands-on-components and detailed training guidelines by the management. The company intends to improve guest experience through training the employees mostly on areas that include food preparation, facility maintenance, and service (Dunne, Robert and James 173).
While the lower level employees receive training, the managerial staff is also developed through a two-step process incorporating hands-on education and management skills. Motivation of employees is also in the company’s main agenda when considering the human resources. The company attempts to motivate its workforce through provision of increased responsibility opportunities as well as advancement. To further cement the motivation, the company also offers a performance based incentives that are tied to profitability and sales.
Corporate strategy Buffalo Wild Wings includes a management structure that has a general manager, an assistant general manager as well as a maximum of three additional branch managers depending on the sales volume attributed to a specific restaurant. The regional managers oversee the general managers especially in ensuring that they receive the required training and support, which are necessary for effective operation in the respective restaurants. The organization adds the number of managers as it expands geographically. This expounds on the corporate strategy that the business adopts in doing business.
In its growth strategy, the management has established procedures that help in identification of new opportunities with respect to new markets to which the company can expand. These procedures are also responsible for identifying probable sites for franchised and company owned restaurants in addition to identification of the strategy that the company will use when operating in those markets. The other strategy that has ensured that the company continues making more profits is the development strategy that the management takes seriously. While it remains a serious idea, both managers and other lower level employees are trained to ensure high-level expertise in service delivery as the company anticipates.
This also functions as an effective strategy in ensuring stability of the business (Dunne, Robert and James 173). Moreover, offering franchises is also a strategy that the company uses in increasing its sales volume since its products are available in most markets. This strategy is mostly used if the company has not established its own outlets in the specified market. The company has also managed to keep commodity price risk in check by application of corporate strategies.
For instance, the organization explores purchasing strategies so as to reduce the severity of cost fluctuations and increases. Here, the organization purchases chicken wings with respect to weight but sold independently at a higher price after having been used to create a bold flavor for the customers. Another corporate strategy that the company has adopted over the years includes acquiring other companies in the same field (Tom 78-79). This has been an important corporate step in improving the performance of the business through increase in market share. Financial information With respect to finances, Buffalo Wild Wings has been improving in its financial performance and anticipates continuing the same and even improving further following the implementation of its expansion strategies into new markets.
The following table shows Buffalo Wild Wings’ financial performance for a five-year financial period until 2013. Fiscal Years Ended (1) Dec. 29, Dec. 30, Dec. 25, Dec. 26, Dec. 27, 2013 2012 2011 2010 2009 (in thousands, except share and per share data) Consolidated Statements of Earnings Data: Revenue: Restaurant sales $ 1,185,351 963,963 717,395 555,184 488,702 Franchise royalties and fees 81,368 76,567 67,083 58,072 50,222 Total revenue 1,266,719 1,040,530 784,478 613,256 538,924 Costs and expenses: Restaurant operating costs: Cost of sales 363,755 303,653 203,291 160,877 147,659 Labor 360,302 289,167 215,649 167,193 146,555 Operating 174,338 141,417 109,654 88,694 76,358 Occupancy 68,394 54,147 44,005 36,501 32,362 Depreciation and amortization 84,978 67,462 49,913 39,205 32,605 General and administrative 96,182 84,149 72,689 53,996 49,404 Preopening 14,647 14,630 14,564 8,398 7,702 Loss on asset disposals and impairment 3,262 3,291 1,929 2,051 1,928 Total costs and expenses 1,165,858 957,916 711,694 556,915 494,573 Income from operations 100,861 82,614 72,784 56,341 44,351 Investment income 674 754 118 684 1,077 Earnings before income taxes 101,535 83,368 72,902 57,025 45,428 Income tax expense 29,981 26,093 22,476 18,625 14,757 Net earnings $ 71,554 57,275 50,426 38,400 30,671 Earnings per common share - basic $ 3.81 3.08 2.75 2.11 1.70 Earnings per common share - diluted 3.79 3.06 2.73 2.10 1.69 Weighted average shares outstanding - basic 18,770,000 18,582,000 18,337,000 18,175,000 18,010,000 Weighted average shares outstanding - diluted 18,872,000 18,705,000 18,483,000 18,270,000 18,177,000 Consolidated Statements of Cash Flow Data: Net cash provided by operating activities $ 179,360 145,188 148,260 89,699 79,286 Net cash used in investing activities (145,741) (142,753) (146,682) (85,226) (79,172) Net cash (used in) provided by financing activities 3,039 (1,588) 3,690 1,265 1,119 As Of (1) Dec.
29, Dec. 30, Dec. 25, Dec. 26, Dec. 27, 2013 2012 2011 2010 2009 (in thousands) Consolidated Balance Sheets Data: Total current assets $ 182,756 125,536 139,245 134,204 98,523 Total assets 705,728 591,087 495,359 380,357 309,073 Total current liabilities 166,474 140,843 114,270 79,116 66,704 Total liabilities 239,920 207,715 177,373 123,536 99,240 Retained earnings 333,601 262,047 204,772 154,346 115,946 Total stockholders equity 465,808 383,372 317,986 256,821 209,833 Analysis of financial information By December 2013, Buffalo Wild Wings owned and operated at least 434 company-owned and franchise businesses.
The organization expects to open at least 45 and 50 company owned and franchise restaurants respectively during the financial year 2014. In the five-year financial period that ended in 2013, the organization managed to acquire 94% of its total sales from its total revenue from company owned restaurants. Additionally, no goodwill charges were impaired throughout 2011 to 2013 (Edgar Online 22). The net earnings have been on the rise throughout the five-year period implying that the strategies employed in running the organization are effective and reliable.
In the same way, the restaurant’s total revenue and sales have also been increasing throughout the five-year period. However, the expenses for the same period also increased. This includes labor, operating and occupancy expenses (Edgar Online 22). In spite of the increase, organization is on the right track financially because these expenses have led to improvements in organizational performance; therefore, they are accountable. While the liabilities increased during this financial year, the assets also increased showing a positive direction. Works Cited Dunne, Patrick M., Robert F.
Lusch, and James R. Carver. Retailing. Mason, OH: South-Western Cengage Learning. 2014. Print. Edgar Online. Buffalo Wild Wings Inc. New York: Edgar Online. 2014. Print. Sherman, Andrew J. Franchising & Licensing: Two Powerful Ways to Grow Your Business in Any Economy. New York: Amacom, 2011. Print. Taulli, Tom. High-profit Ipo Strategies: Finding Breakout Ipos for Investors and Traders. Hoboken, N.J: Wiley, 2013. Print.