Red Robin Gourmet Burgers (RRGB) SWOT Analysis / TOWS Matrix / MBA Resources
Restaurants
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Red Robin Gourmet Burgers (United States)
Based on various researches at Oak Spring University , Red Robin Gourmet Burgers is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing commodity prices, geopolitical disruptions, supply chains are disrupted by pandemic , there is backlash against globalization, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Red Robin Gourmet Burgers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Red Robin Gourmet Burgers can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Red Robin Gourmet Burgers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Red Robin Gourmet Burgers operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Red Robin Gourmet Burgers can be done for the following purposes –
1. Strategic planning of Red Robin Gourmet Burgers
2. Improving business portfolio management of Red Robin Gourmet Burgers
3. Assessing feasibility of the new initiative in United States
4. Making a Restaurants sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Red Robin Gourmet Burgers
Strengths of Red Robin Gourmet Burgers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Red Robin Gourmet Burgers are -
Organizational Resilience of Red Robin Gourmet Burgers
– The covid-19 pandemic has put organizational resilience at the centre of everthing Red Robin Gourmet Burgers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Red Robin Gourmet Burgers has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Restaurants industry. Secondly the value chain collaborators of Red Robin Gourmet Burgers have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Red Robin Gourmet Burgers in Restaurants industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Restaurants industry
– Red Robin Gourmet Burgers has clearly differentiated products in the market place. This has enabled Red Robin Gourmet Burgers to fetch slight price premium compare to the competitors in the Restaurants industry. The sustainable margins have also helped Red Robin Gourmet Burgers to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Red Robin Gourmet Burgers comprises – understanding the underlying the factors in the Restaurants industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Red Robin Gourmet Burgers is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Red Robin Gourmet Burgers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Red Robin Gourmet Burgers emphasize – knowledge, initiative, and innovation.
High brand equity
– Red Robin Gourmet Burgers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Red Robin Gourmet Burgers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Red Robin Gourmet Burgers is present in almost all the verticals within the Restaurants industry. This has provided Red Robin Gourmet Burgers a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Restaurants
– Red Robin Gourmet Burgers is one of the leading players in the Restaurants industry in United States. Over the years it has not only transformed the business landscape in the Restaurants industry in United States but also across the existing markets. The ability to lead change has enabled Red Robin Gourmet Burgers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Red Robin Gourmet Burgers is one of the most innovative firm in Restaurants sector.
Strong track record of project management in the Restaurants industry
– Red Robin Gourmet Burgers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Restaurants industry
- digital transformation varies from industry to industry. For Red Robin Gourmet Burgers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Red Robin Gourmet Burgers has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses of Red Robin Gourmet Burgers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Red Robin Gourmet Burgers are -
Increasing silos among functional specialists
– The organizational structure of Red Robin Gourmet Burgers is dominated by functional specialists. It is not different from other players in the Restaurants industry, but Red Robin Gourmet Burgers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Red Robin Gourmet Burgers to focus more on services in the Restaurants industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Restaurants industry, Red Robin Gourmet Burgers needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ less understanding of Red Robin Gourmet Burgers strategy
– From the outside it seems that the employees of Red Robin Gourmet Burgers don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, Red Robin Gourmet Burgers has high operating costs in the Restaurants industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Red Robin Gourmet Burgers lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Red Robin Gourmet Burgers has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Restaurants industry over the last five years. Red Robin Gourmet Burgers even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative at Red Robin Gourmet Burgers, in the dynamic environment of Restaurants industry it has struggled to respond to the nimble upstart competition. Red Robin Gourmet Burgers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Red Robin Gourmet Burgers is just above the Restaurants industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Red Robin Gourmet Burgers has some of the most successful models in the Restaurants industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Red Robin Gourmet Burgers should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of United States, Red Robin Gourmet Burgers needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Red Robin Gourmet Burgers products
– To increase the profitability and margins on the products, Red Robin Gourmet Burgers needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Red Robin Gourmet Burgers has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Red Robin Gourmet Burgers Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Red Robin Gourmet Burgers are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Red Robin Gourmet Burgers can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Red Robin Gourmet Burgers to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Manufacturing automation
– Red Robin Gourmet Burgers can use the latest technology developments to improve its manufacturing and designing process in Restaurants sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions in Restaurants industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Red Robin Gourmet Burgers in the Restaurants industry. Now Red Robin Gourmet Burgers can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Restaurants industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Red Robin Gourmet Burgers can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Red Robin Gourmet Burgers can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Red Robin Gourmet Burgers can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Restaurants industry.
Loyalty marketing
– Red Robin Gourmet Burgers has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Red Robin Gourmet Burgers to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Red Robin Gourmet Burgers can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Red Robin Gourmet Burgers can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Red Robin Gourmet Burgers to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Red Robin Gourmet Burgers in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Restaurants industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Red Robin Gourmet Burgers has opened avenues for new revenue streams for the organization in Restaurants industry. This can help Red Robin Gourmet Burgers to build a more holistic ecosystem for Red Robin Gourmet Burgers products in the Restaurants industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Red Robin Gourmet Burgers can improve the customer journey of consumers in the Restaurants industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Red Robin Gourmet Burgers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Red Robin Gourmet Burgers are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Red Robin Gourmet Burgers may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Restaurants sector.
Stagnating economy with rate increase
– Red Robin Gourmet Burgers can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Restaurants industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Red Robin Gourmet Burgers in Restaurants industry. The Restaurants industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Red Robin Gourmet Burgers has witnessed rapid integration of technology during Covid-19 in the Restaurants industry. As one of the leading players in the industry, Red Robin Gourmet Burgers needs to keep up with the evolution of technology in the Restaurants sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Red Robin Gourmet Burgers needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Red Robin Gourmet Burgers can take advantage of this fund but it will also bring new competitors in the Restaurants industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Red Robin Gourmet Burgers will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Red Robin Gourmet Burgers in the Restaurants sector and impact the bottomline of the organization.
Increasing wage structure of Red Robin Gourmet Burgers
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Red Robin Gourmet Burgers.
Shortening product life cycle
– it is one of the major threat that Red Robin Gourmet Burgers is facing in Restaurants sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Red Robin Gourmet Burgers needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Restaurants industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Red Robin Gourmet Burgers business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Restaurants industry are lowering. It can presents Red Robin Gourmet Burgers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Restaurants sector.
Weighted SWOT Analysis of Red Robin Gourmet Burgers Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Red Robin Gourmet Burgers needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Red Robin Gourmet Burgers is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Red Robin Gourmet Burgers is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Red Robin Gourmet Burgers to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Red Robin Gourmet Burgers needs to make to build a sustainable competitive advantage.