International Business-Marketing Sonic Drive-Thrus in the UK
Introduction
Sonic Drive-In is an American fast food restaurant that takes advantage of the drive-in fast food-service. In a drive-in service, customers often do not stay inside the restaurant. They just drive through the restaurant to buy food or whatever type of commodity they wish to acquire from a drive-in store. Sonic Drive-In operates in the food and service industry. The objective of this paper is to discuss what type of management and management approach the Sonic Drive-In company applies in their expansion plans and actions as a whole, and some recommended plans and actions they could undertake should they finally decide to expand their business operations within the United Kingdom. In general, it is suggested that Sonic Drive-In’s management team try to make their food and service lineup as in their UK expansion plans and try to test first how the market there would respond. Should the market respond negatively—they can, for example, base the market’s reaction on sales and financial figures for the first couple of months or years, and then make significant adjustments until such time that they finally found the correct mixture of food and food services that would fit the UK market’s preferences.
Internal Environment
Obviously, the types of products they sell are foods. The items in their menu, in most of their branches, include but are not limited to classic fast food items such as hamburgers, pasta, French fries, onion rings, hotdogs, corn dogs, and other foods typically offered in carnivals. Some of the foods that the company is best known for are: the Breakfast Toaster (a special sandwich made with a Texas toast instead of a regular bun) and the Cheddar Peppers. Their menu for drinks often include soft drinks, sodas, fruit juices, milk shakes, and slushes, although most branches offer a special drink service feature wherein customers are allowed to mix different types of drinks and flavors, which was one of the Sonic Drive-In’s management’s efforts to increase the variety of the foods and services they can offer to their customers. One would think that these menus and services are quite similar to what other players in the food and service industry offer. However, in Sonic Drive-In’s case, it is not just the type of food and service that make their customers go wow but how fast these two get delivered. Their secret, in terms of their internal environment strengths, can already be found on the company’s name. Sonic Drive-In is a drive-in restaurant. Meaning, customers can park their cars for a couple of minutes while they process their orders through a series of intercoms—a perfect exhibition of how modern technologies help businesses such as Sonic Drive-In double or even triple their sales compared to when they were using traditional manpower-based approaches, and then get what they ordered in just a very short amount of time, especially when compared to the total processing and service time that traditional fast-food and fine dining restaurants offer. In terms of planning, leading, organizing, implementing and controlling, it can be asserted that Sonic Drive-In has one of the biggest advantages since it can afford to employ just a small team of workers who would get assigned to different tasks because most of the in-store tasks can be aided with the use of intercoms and computers.
In a highly developed country such as the United States, going into fast food restaurants to eat is almost a part of an individual’s everyday life. The faster the food gets delivered, the better . This is where Sonic Drive-In’s sharpest edge lies. The United Kingdom, just like the U.S., is also a developed and highly industrialized country. Therefore, it makes sense to assert that people there also frequently visit fast food restaurants to eat and or simply buy food. If that is indeed the case, then Sonic Drive-In can carry its strength over to the UK market. The United Kingdom is currently one of the safest places where corporations can expand their businesses in because firstly, it is currently the world’s 6th largest economy and secondly, it offers a fairly and liberally regulated market economy which somewhat resembles that of the U.S . Because of this, many businesses flock to member countries of the UK, which is one of the reasons why the level of competition, regardless of the industry, is high in the UK , which is something that can present as a challenge for Sonic Drive-In’s management team and their expansion plans and efforts.
Entry Mode Selection
Considering the current position of Sonic Drive-In’s business in the U.S. market, its financial situation, and its future possible plans to expand in the U.K., we would recommend that the management team use the WOS or Wholly Owned Subsidiaries approach in expanding into their new foreign market. By using this approach, they can make sure that in case the venture becomes successful and profitable, which according to initial assessments it will, they can ensure that they would have full and total control of the firm . This would mean that they have the potential of pocketing all the returns from their UK venture. However, this foreign market entry approach has one major disadvantage and that would be the high level of risk associated mainly because of the large costs associated with establishing a Wholly Owned Subsidiary in a developed country like the UK . Some of the biggest players in the food and service industry that also have stakes in the UK are KFC Food Corporation and McDonalds and some other local players. In terms of the level of competition, it is quite high since UK features a liberal and slightly regulated free market economy. In terms of the moves the rivals are likely to make should Sonic Drive-In’s management continue with their UK expansion plans, their UK competitors might engage in price and service wars wherein the player offering the lowest value for money for customers would get their throats cut, as in a cut-throat form of competition, which is common in any industry.
International Functions
Finance is a key aspect that Sonic Drive-In’s management team should focus on in their UK expansion plans because firstly, the recommended entry approach, which would be the WOS, is often associated with large expenses. If they could manage their finances well by preparing their pockets prior to the implementation and execution of the expansion plans, financially and administratively, then there is a good chance that the company will be able to withstand the most common challenges that internationally expanding businesses face.
Conclusion based on a Cost-Benefit Analysis
Considering all the risks associated with the possible expansion project, the current stand and position of Sonic Drive-In in the U.S. market, its size relative to other international food and service industry players, and the possible skyrocketing prices associated with opening up a new subsidiary in the U.K., we recommend that the that Sonic Drive-In’s management focus on the U.S. market first and try to strengthen their market and financial position first so they can have more room for possible errors and or fluctuations in the economy and or market preferences, which are factors that can spell the difference between a failed attempt to expand and a successful and profitable one.
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