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  • Subject area(s): Hospitality
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  • Published on: 15th October 2019
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1. How does Shake Shack do international business?

What started as a hot dog cart in New York City at Madison Garden is now extensively grown with 51 locations domestically. Shake Shack became so successful that it is operating worldwide now (Shack, 2016).

Recently, on the website you can find a Shake Shack in total 85 locations around the world. There are 51 stores in the US and 34 stores international (Shack, 2016). Before we take a look at the international locations lets take a look at how many Shack’s are located in  domestic locations: Arizona (2), California (1), Connecticut (2), Florida (5), Georgia (1), Illinois (3), Maryland (1), Massachusetts (4), Nevada (2), New Jersey (3), New York (15) Pennsylvania (3), Texas (2), Virginia (1) and Washington, DC (4) (Shack, 2016). Shake Shack has a 450 store goal in own country but it grows slow in own country with 12 Shack’s a year. The reason for this slow growth is that founder Danny Meyer and CEO Randy Garutti want to maintain a strategy to grow intentionally slow in order to give the necessary support to all the Shack locations to keep the high quality service and to keep their customer and employee satisfaction high (McGregor, 2015).

By looking at the number of restaurants we can conclude that Shake Shack is expanding rapidly in the Middle East (Shack, 2016). Recently, with 34 stores in different locations Middle East (23), Turkey (4), United Kingdom (3), Japan (1) and Russia (3). Shack is doing great business international (Shack, 2016). Shake Shack has the most outlets in the Middle East with 23 locations. We can see that with 23 locations the Middle East is Shack’s greatest licensed partner.

 In order to keep the same level of quality of the Shake Shack burger experience with great taste and high employee and customer satisfaction as the domestic locations Shack’s operates via licensed agreements Shake Shack does not offer franchising to its international business partners and prefer to grow slow. Shack’s select their partners with care and based on how they can help to achieve the company’s goal to deliver Shack’s quality service.

In order to achieve this goal Shack’s licensed stores offer the same quality  Shake Shack burgers experience with great tasting food and the classic menu with 100% all-natural Angus beef with no hormones and no antibiotics (Shack, Burgers, 2016). It is offering premium fast food a great burger, a great value and great hospitality at their international locations with their natural ingredients, excellent taste, customer satisfaction, employee satisfaction and community gathering locations in order to make the burger experience an unforgettable one. Generous serving is very important by given the employees and customers a generous treatment Shack is building relationships. With globalization Shack needs to adapt their company policy to the needs of the international locations. Some countries have their own regulations like for example Turkey have their own meat regulation and Shack is adapting the beef to this (Rainey, 2013). Recently, on Shack’s website you can find the international menus that Shake Shack offer to its international locations the delicious burgers, fries, hot dogs, frozen custard, shakes, both alcoholic and non-alcoholic beverages (Shack, Shake Shack locations, 2016).  The menus on the website can differ from locations this is because Shack adapt their international menus to the local needs  (Shack, 2016). The menu is Japan is translated to Japanese language. All the locations of the Shake Shack stores are carefully chosen and customizable designed in each country and are based on the community-gathered places an experience of coming together for Shake Shack customers.  

Finally, Shake Shack has a strategy to grow slow international in order to remain the burger experience that make their Shack burger experience successful. It is important for Shake Shack to find the right international licensed partner to expand their business international.

What does the fast food market in the Netherlands look like?

In order to enter the fast food sector in the Netherlands it is important for Shake Shack to have an impression and overview about the market. Fast food sectors within the Netherlands are Burgers, Chicken, Sandwiches, Pizza and Asian food there are also other consumer foodservice sectors like 100% home delivery/ takeaway, cafés/bars, full-service restaurants, self- service cafeterias, street stalls/ kiosks, pizza consumer consumer foodservices (see table 3 below Consumer Foodservice by independent vs Chained: Units/ Outlets 2014) (Euromonitor, 2015).  

According USDA Foreign Agriculture Service U.S. products are very popular among the Dutch community (Pincakaers, 2013). The amount of U.S. fast food chains in the Netherlands shows this McDonalds (241 outlets), Subway (161 outlets) and Domino Pizza (160 outlets) (Euromonitor, 2015). The fast-food sectors have as well international and national key players like McDonalds, KFC, Burger King, Subway, Domino’s Pizza, New York Pizza & Febo (Euromonitor , 2015).  Febo is a national fast food chain where customers can buy Dutch products like frikandel, kroket, burgers and fries (Febo, 2016).  You can find all these famous fast food outlet in almost every hotspot, city centre and railway stations. According to Euromonitor (2015), McDonald’s stays the leading brand in fast food in the Netherlands with its 241 outlets (Euromonitor, 2015). This means that McDonald’s will be Shack’s biggest competitor in the Netherlands.

The Dutch consumer is curious and like to try new things this creates opportunities for Shack to introduce their business in the Dutch fast food market (Pincakaers, 2013). Shack has an advantage that they also offer alcoholic beverages in their menus. The margins on alcoholic beverages including wine and beer would have high sales potential in the Netherlands (Pincakaers, 2013). Beer and wine are the most popular drinks in the Netherlands (Euromonitor, 2015).  There is a legalisation, which prohibits sales of alcoholic beverages to consumers until the age of 18. According to this alcohol policy Shake Shack needs to apply for an alcohol licence (STAP, 2009). With this offer Shack would distinguish itself from the other fast food chains like McDonalds.

Fast food chains in the Netherlands operate with franchising concept (Euromonitor, 2015). It is a growing concept in the Netherlands. Shake Shack policy is that it does not franchise international (Shack, 2016).  In order to expand in the Netherlands it needs to find a licensed partner who can operate the Shake Shack.

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