Business Strategy & Policy Self Discovery: Chick-Fil-A

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Company Synopsis

Chick-Fil-A is a chain of fast food restaurants in the United States that specializes in producing chicken sandwiches, chicken nuggets, and other chicken dishes. The restaurant named Chick-Fil-A was opened in 1967, but the company was founded by S. Truett Cathy under another name in 1946. The company’s sales are more than $12 billion for the 2018-2019 fiscal year, and it employs more than 120,000 people in the United States (“Who we are,” 2020). The firm’s principal competitors are McDonald’s, KFC, Burger King, Taco Bell, and Wendy’s. In the United States, Chick-Fil-A regularly outperforms its rivals (Taylor, 2018). The reason for success is Chick-Fil-A’s unique business model and the focus on high-quality customer services.

The CEO of the company is Daniel Truett Cathy, whose father founded Chick-Fil-A. Daniel T. Cathy has been taking the position since 2013, after the promotion from the role of the director of operations, and he also holds the positions of the company’s president and chairman. The CEO performs his functions of planning, leading, and controlling while guaranteeing that the mission of the company is followed (to provide customers with the best services as quickly as possible).

He frequently visits all the restaurants of the chain to directly supervise and control the processes (Turner, 2015). In this context, the corporate purpose promoted by the CEO is “To glorify God by being a faithful steward of all that is entrusted to us and to have a positive influence on all who come into contact with Chick-fil-A” (“Who we are,” 2020, para. 10). The company’s vision is to address customers’ needs and worship God providing positive impacts and experiences.

Thus, the company’s values are based on Christian religious principles, as it was proclaimed by the founder. The CEO’s controls are based on these principles, and one of the examples is the fact that these restaurants are closed on Sundays. The leadership approach applied by Daniel T. Cathy can be regarded as rather traditional because he follows the model of his father, the founder of the company. This leadership is traditional because the key focus is on referring to the traditions of the past when motivating and supporting franchise operators and employees to work effectively to serve customers’ needs (Reed et al., 2015). In most cases, the CEO can be viewed as an effective leader, but his traditional approach can be ineffective when addressing the tendencies of modern society, affecting the expectations of contemporary customers.

The strengths of Chick-Fil-A include the large presence in the United States, customers’ loyalty due to the reputable brand, the focus on chicken sandwiches in contrast to burgers, and high-quality customer services. Thus, the closeness to customers and the high-quality services are the company’s core competences, and the development of the effective customer relationship management is a priority. The speed of service delivery is also guaranteed with the help of such innovation as upstream ordering using iPads (Emery et al., 2017; “Who we are,” 2020). Weaknesses include the presence mainly in the United States, the lack of innovation, and the focus on a traditional menu.

Opportunities include the focus on healthier menu options, diversification, differentiation, and geographical expansion. The largest foreign market of Chick-Fil-A is Canada, but restaurants there are not profitable. Thus, the company is active only in the home market, and the global strategy is not developed effectively at the current stage in spite of attempts to expand to Europe (Kruse, 2015). Still, globalization provides the company with many opportunities to expand in different regions of the world where Christians live and increase sales. Threats include the increasing competition in the industry, changes in customers’ loyalty because of the same-sex marriage issue discussed by the CEO, problems associated with using chicken in the context of the economic crisis and health issues (Kim et al., 2017; Mukherjee & Althuizen, 2018).

The SWOT analysis results can be explained with reference to assessing the company’s business-level strategy. The focus is on offering a simple menu of chicken sandwiches in different US town and cities, where a customer’s demand and experience are important. For many decades, this model has created value for the company, contributing to the development of a reputable brand (John, 2018).

The situation changed in 2012, when Daniel T. Cathy claimed against same-sex marriages, and in 2017, when it was found out that the company supports anti- LGBTQ organizations. These strategic errors led to the protests against Chick-Fil-A’s activities and decreasing customers’ loyalty (Kim et al., 2017; Mukherjee & Althuizen, 2018). Barriers to effective decision making associated with these events included Cathy’s inability to predict the reactions of those customers who are not Christians. The ethical climate in the company can be described as positive because employees’ interests are valued and addressed, but the discussed issue related to same-sex marriages also was ethical in its nature, affecting the interests of some employees.

The vertical and horizontal organization of Chick-Fil-A is based on the system of franchises, in which franchisees can invest $10,000 to open a restaurant, and he or she is allowed to own only one location. The overall management hierarchy is described as flat as the number of managers is minimal. Still, the CEO’s span of control is rather wide because he monitors the work of all the franchises to guarantee they follow the company’s strategy and contribute to its reputation (“Who we are,” 2020). Thus, all the decisions related to the strategy, marketing, and brand development are centralized, and decisions regarding the improvement of customer services in locations are decentralized.

Human resource management is based on the idea of employing people from certain communities where restaurants are opened. The key focuses are on employee loyalty, commitment, and their retention, providing them with support and scholarships (“Who we are,” 2020). Decisions regarding the staffing strategy are usually decentralized and based on franchise operators’ consideration. Training provided to the company’s workforce is detailed and comprehensive, all franchise operators and employees are trained to be aware of the values and principles of the company (Gerhardt et al., 2015). The reason for providing training is also that soft skills play a key role in operating the company’s franchise to serve local customers’ interests.

Needed Skills and Abilities

Chick-Fil-A has a set of requirements in relation to potential franchise operators with reference to the expected soft and hard skills, and these requirements and expectations are grounded in the company’s vision, values, and business model. Hard skills and abilities that are needed to be demonstrated by potential franchise operators may include business administration, economics, finance, management, operations management, marketing, human resource management, restaurant management, accounting, food technology and management, and supply chain management. It is stated on the company’s website that potential franchise operators should “have a proven track record in business leadership” and “have successfully managed … personal finances” (“Franchise opportunities,” 2020, para. 6). Thus, it is expected that a franchise operator can provide some evidence of their experience in business administration and management to guarantee that they can successfully operate one more restaurant in the Chick-Fil-A chain.

These listed hard skills can be regarded as typical for business owners or entrepreneurs who are interested in opening a fast food restaurant. When selecting Chick-Fil-A, franchise operators are also expected not to be involved in other business activities or ventures to be able to operate the Chick-Fil-A restaurant full-time (“Franchise opportunities,” 2020). Employees working in different location are expected to have developed skills associated with the food preparation, order processing, and delivering services.

In spite of the fact that hard skills of managers and executives play an important role in ensuring that a certain business or a franchise is profitable, much attention is also paid to soft skills and abilities. In addition to being able to provide the initial investment in $10,000, potential franchise operators should demonstrate certain abilities as business leaders. It is desirable that franchise operators are mostly traditional but supportive leaders who care for local customers’ needs and interests (Bateman et al., 2019; Davis, 2020). Successful leadership is extremely important for operators of local restaurants because of the necessity to address communities’ needs in the most appropriate manner. Franchise operators should also have developed ethics and morale primarily based on Christian values as the founder and CEO of Chick-Fil-A are Baptists.

In addition to leadership and ethics, other required soft skills include interpersonal relationships and effective communication. The reason is that franchise operators are responsible for organizing human resource management in local restaurants, and the process of hiring and retaining employees should be non-discriminative, ethical, efficient, and contributing to the community’s and business’s needs (Bateman et al., 2019). Much attention is also paid to operators’ team work and management skills to guarantee they are able to effectively cooperate with employees and lead them to address customers’ expectations and demand. Therefore, Chick-fil-A provides operators and managers with training on teamwork, leadership, and customer relations to ensure they have the advanced skills and abilities in these areas (“Franchise opportunities,” 2020). Finally, the focus is also on operators’ flexibility because they are expected to be responsive to employees’ and customers’ needs and have the high level of adaptability.

Gap Analysis/Action Plan

Gap Analysis

The discussed needs and abilities provide the area for the gap analysis to determine what specific skills should be improved or developed to guarantee obtaining the role of a franchise operator in Chick-fil-A. Table 1 provides the skills and abilities with a focus on the current and desired state in relation to their development and the gap description to be later addressed with the help of the action plan. Both hard and soft skills that need to be improved to become a franchise operator of the fast food restaurant chain are presented in the table. The previous professional experience of working as a banker and an accountant allows for regarding the hard skills in such areas as economics, finance, and accounting as not requiring further improvement. The competences and skills related to these fields are of the desired level to effectively perform as an operator according to the expectations of the executives of Chick-fil-A.

Table 1. Gap Analysis Table.

Skills and Abilities Current State Desired State Gap Description
Hard Skills
Business Administration and Management Sufficient theoretical knowledge and limited practical experience Developed theoretical knowledge and some practical experience Theoretical knowledge is based on the course material, and there is no degree in this field. Practical experience is based on 6 months of performing as a director in a local company.
Operations Management No sufficient theoretical knowledge and practical experience Developed theoretical knowledge and some practical experience There is no sufficient knowledge and experience regarding operations management, there is only some theoretical background.
Food Technology and Management No knowledge or experience Basic theoretical knowledge There is no any knowledge or experience in this area.
Human Resource Management Developed theoretical knowledge Enhanced practical skills Despite the presence of developed theoretical knowledge, there is no experience of applying HR practices and methods.
Supply Chain Management No sufficient theoretical knowledge and practical experience Developed theoretical knowledge and some practical experience There is no enough knowledge and experience regarding supply chain management, and skills are based on learning educational materials
Marketing No sufficient theoretical knowledge and practical experience Developed theoretical knowledge The current level of knowledge regarding the field is not enough.
Restaurant Management No knowledge or experience Basic theoretical knowledge There is no knowledge or experience in this area.
Soft Skills
Leadership Abilities associated with situational leadership Developed skills and abilities associated with transformational leadership The current leadership style should be developed to transformational leadership.
Ethics Developed ethical principles Developed morale and the understanding of the Christian ethics The current state of this soft skill should be improved with reference to the ethical principles and values followed in the company.
Interpersonal Relationships and Communication Developed appropriately Advanced The necessity of working with diverse employees as a leader requires the improvement of communication skills.
Team Management The medium level of development The high level of development Developed team management skills are required for a leader.
Customer Relations The high level of development The high level of development The necessity of addressing customer needs requires the further development of this skill.
Flexibility The medium level of development The high level of development Flexibility required for addressing situations, customers’ requests, and employees’ needs should be developed to the highest level.

The presence of the developed knowledge and practical skills in economics, finance, and accounting allows for focusing on the enhancement of other required competences. The obtained degrees and education support the presence of theoretical knowledge related to business administration and management, operations management, supply chain management, human resource management, and marketing. In these fields, the further development of practical skills is required with reference to deepening the knowledge of the best strategies and practices in these areas to be applied when operating a restaurant.

However, the analysis indicates that knowledge regarding food technology and management as well as restaurant management is absent because the candidate received the education in the fields of banking and accounting. Thus, the courses did not cover these specific areas of knowledge that can be required for a franchise operator.

In relation to the analysis of soft skills, it is possible to state that the candidate has all the required skills developed: leadership, ethics, communication, teamwork, customer relations, and flexibility. However, referring to the specifics of operating a fast food restaurant and addressing directly customers’ interests, it is necessary to improve the listed skills and competences. Working as a banker and an accountant, the candidate developed effective communication, customer relations, and flexibility skills. The candidate was responsible for building positive relations with customers in their previous job positions and demonstrated flexibility cooperating with others.

The lack of experience of working at the leadership position did not allow for advancing a leadership style and developing competences in team management. At the current stage, the developed leadership style is situational, and it will be easy for the candidate to shift to traditional leadership. The further development of the approach to apply transformational leadership will require some practice of working in the position of a franchise operator. Furthermore, in spite of paying much attention to corporate ethics, it is necessary to learn more about ethical values adopted at Chick-Fil-A to succeed as a franchise operator of a local restaurant.

Action Plan

The steps required to address the determined gap and developed desired skills and competences are presented in Table 2.

Table 2. Action Plan.

Skills and Abilities Desired State Actions
Hard Skills
Business Administration and Management Developed theoretical knowledge and some practical experience To obtain a leadership position in a company related to the restaurant industry.
Operations Management
Supply Chain Management
Food Technology and Management Basic theoretical knowledge To choose courses, workshops, and seminars covering these fields;
Attending courses and seminars, to develop the knowledge of these spheres to apply it to practice.
Marketing
Restaurant Management
Human Resource Management Enhanced practical skills To cooperate with HR managers at the current workplace;
To perform duties and responsibilities related to HRM.
Soft Skills
Leadership Developed skills and abilities associated with transformational leadership To develop the knowledge of practices and techniques used by transformational and inspirational leaders;
To act as a transformational leader in the workplace, supervising employees.
Ethics Developed morale and the understanding of the Christian ethics To develop the knowledge of ethical principles and values followed at Chick-Fil-A;
To act following these values, beliefs, and principles.
Team Management The high level of development To study the literature on team management and team work to enhance theoretical knowledge;
To practice the effective work in teams in the workplace.
Flexibility The high level of development To contact leaders and experts in the area;
To examine literature on the topic;
To apply skills in the workplace.

Table 2 provides the actions determined to take in order to address the gaps identified with the help of the analysis. Some skills were not included in this action plan (for example, communication and customer relations) because the candidate demonstrates the necessary level of achievement, and there is no gap determined. For other skills and areas, certain steps were offered to ensure that the candidate will be able to improve theoretical knowledge and practical skills to meet the expectations and requirements of Chick-Fil-A. Hard skills will be improved with the help of courses, seminars, and workshops as well as with a focus on practical experience because it is necessary to develop specific competences in the determined fields. Soft skills will be developed with the help of seminars, consultation, and regular practice.

References

Bateman, T. S., Snell, S. A., & Konopaske, R. (2019). Management: Leading &​ collaborating in a competitive world (13th ed.). McGraw-Hill.

Davis, S. (2020). The inside scoop on the leadership development program with Chick-fil-A. Talent Egg. Web.

Emery, B. G., Hodges, B., & Tiger, A. (2017). Simulating the impact of mobile ordering at Chick-fil-A. Journal of Marketing Development and Competitiveness, 11(1), 1-12.

Franchise opportunities. (2020). Chick-Fil-A. Web.

Gerhardt, S., Hazen, S., Lewis, S., & Hall, R. (2015). Entrepreneur options: “Franchising” vs.”Licensing” (Mcdonald’s vs. Starbucks and Chick-Fil-A). ASBBS E-Journal, 11(1), 80-89.

John, S. (2018). Chick-fil-A is one of the most profitable fast-food chains in the US — here’s why they’re so successful. Business Insider. Web.

Kim, K., Kim, J., & Reid, L. N. (2017). Experiencing motivational conflict on social media in a crisis situation: The case of the Chick-fil-A same-sex marriage controversy. Computers in Human Behavior, 71, 32-41.

Kruse, K. (2015). How Chick-fil-A created a culture that lasts. The Forbes. Web.

Mukherjee, S., & Althuizen, N. (2018). Courting controversy: When taking a stand on social issues hurts or helps business. ACR European Advances, 1, 1-9.

Reed, M. M., Neubert, M., & Waldron, T. (2015). Chick-fil-A: Responding to activists’ threats. NeilsonJournals Publishing.

Taylor, K. (2018). Chick-fil-A’s secret weapon is helping it dominate chains like McDonald’s and KFC. Business Insider. Web.

Turner, D. A. (2015). It’s my pleasure: The impact of extraordinary talent and a compelling culture. Elevate Publishing.

Who we are. (2020). Chick-Fil-A. Web.

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