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 – wage bills are increasing, increasing commodity prices, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , geopolitical disruptions, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, 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 -
Innovation driven organization
– Red Robin Gourmet Burgers is one of the most innovative firm in Restaurants sector.
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.
Ability to recruit top talent
– Red Robin Gourmet Burgers is one of the leading players in the Restaurants industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
Effective Research and Development (R&D)
– Red Robin Gourmet Burgers has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Red Robin Gourmet Burgers staying ahead in the Restaurants industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Analytics focus
– Red Robin Gourmet Burgers is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Restaurants industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Red Robin Gourmet Burgers are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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 -
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.
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.
Interest costs
– Compare to the competition, Red Robin Gourmet Burgers has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Red Robin Gourmet Burgers is one of the leading players in the Restaurants industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Restaurants industry in last five years.
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.
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.
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.
High dependence on Red Robin Gourmet Burgers ‘s star products
– The top 2 products and services of Red Robin Gourmet Burgers still accounts for major business revenue. This dependence on star products in Restaurants industry has resulted into insufficient focus on developing new products, even though Red Robin Gourmet Burgers has relatively successful track record of launching new products.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Red Robin Gourmet Burgers is slow explore the new channels of communication. These new channels of communication can help Red Robin Gourmet Burgers to provide better information regarding Restaurants products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Red Robin Gourmet Burgers has a high cash cycle compare to other players in the Restaurants industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Red Robin Gourmet Burgers is facing challenges because of the dominance of functional experts in the organization. Red Robin Gourmet Burgers can utilize new technology in the field of Restaurants industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Red Robin Gourmet Burgers to increase its market reach. Red Robin Gourmet Burgers will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Red Robin Gourmet Burgers to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Red Robin Gourmet Burgers to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Red Robin Gourmet Burgers can use these opportunities to build new business models that can help the communities that Red Robin Gourmet Burgers operates in. Secondly it can use opportunities from government spending in Restaurants sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Red Robin Gourmet Burgers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Developing new processes and practices
– Red Robin Gourmet Burgers can develop new processes and procedures in Restaurants industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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 -
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.
High dependence on third party suppliers
– Red Robin Gourmet Burgers high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Red Robin Gourmet Burgers needs to understand the core reasons impacting the Restaurants industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Red Robin Gourmet Burgers can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Red Robin Gourmet Burgers prominent markets.
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 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.
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.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Red Robin Gourmet Burgers.
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.
