A & W Drive-Ins Limited Strategic Analysis
o Con: the “merchandising appeal” will be lost and the public may not feel there is enough difference between McDonalds and A & W to justify going to the higher priced restaurant.
• Cutting out the carhop service
o Pro: savings in labor costs.
o Cop: the car hop is what makes A & W different from other restaurants.
o Con: if the car hops are eliminated, the customer will have to get out of the car to obtain the food, which will make the restaurant lose its ‘fast food’ feel psychologically.
• Reduce advertising costs
o Pro: save money without sacrificing labor or product quality.
o Con: the other companies will be advertised more.
Strategic Recommendations:
The recommendation that I will make is to reduce the advertising costs by cutting back on the number of advertisements in the media. It is more important to keep the existing customers happy and returning than attract new customers through costly ads. Word-of-mouth testimonials are the most effective advertising. If the company sacrifices quality and service the ads won’t matter anyway.