Wendy's Chili Case 
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1. Wendy's was able to achieve its initial success and grow so rapidly at a time when the quick service hamburger business appeared to be saturated because Wendy's went after a different segment of the hamburger market- young adults and adults.  Wendy's differentiated itself from its competitors by creating a unique and "old fashioned" hamburger. This hamburger was made from fresh beef that was cooked to order and served directly from the grill to the customer, which allowed the customers to see what they were eating, making them feel much more overall comfortable with what they were ordering.  Another unique feature of the Wendy's hamburger was that it was square in shape to allow it to extend beyond the round buns on which they were served. From the mid sixties to the late seventies, Wendy's greatest competitors were McDonald's, Burger King and Hardee's, all of which were competing to become the best and most profitable fast food establishment. Each company offered their own refinements to heighten their competitive advantage. Wendy's took on its then-larger competitors with its square burgers to become the consumer poll based best-tasting hamburgers of the four.

2.  Mr. Thomas made the decision to limit the number of menu items because he felt it would allow Wendy's to remain price competitive and still serve a better quality product. The benefits that might have resulted from this "limited menu" concept are that having this "core menu" of four individual products would save the time that would be spent cooking all of the other products that could potentially be sold.  Having a limited number of items for sale allowed the cooks to continuously prepare the food, knowing that those products would be ordered. Another benefit to this concept would be that Wendy's could make these products stand out above its competitors and make the Wendy's menu more memorable by focusing more attention on their marketing strategy and mix.  If these products are very well known because of advertising, more customers would be likely to purchase them and will continue purchasing them because they have become established products in the fast food market.  A third benefit is the value added features not offered by the competition.  With the many different condiments that Wendy's had available, there were 256 different possible hamburger combinations, even though its menu was limited to four basic items.  The absence of any frills in the Wendy's menu accounted for savings which enabled Wendy's to be able to reduce the prices, maintaining a competitive advantage. The disadvantages of having a limited menu are that other fast food establishments may take advantage of that fact and offer a bigger and better selection of products, maintaining a competitive advantage over Wendy's on a product level.  Another disadvantage of the "limited menu" concept is that if some customers were vegetarians, the menu does not suit their need. Also, if parents brought their children in to eat and the children were very fussy eaters, the parents would have a hard time finding food for the children and would probably have to take them elsewhere to eat. The concept was eventually discontinued because there were more and more fast food establishments opening up and the pressure to keep up with the competition was so huge that Wendy's had to expand the menu in order to keep up with the competition. This expansion was due to the above stated competitive pressures and changing customer demands.

3.    Wendy's drive-thru window was successful when other quick-service restaurant chains had been unsuccessful at implementing the same concept because it was the most primitive of the various fast food establishments.  Wendy's came out with the drive-thru window concept in the 1970s and used it as an early competitive advantage, making Wendy's stand out from its competitors and raise more profit.  When other companies decided to implement the same concept, it lost its initial excitement and uniqueness, yet Wendy's was still known as the originator.  

5. The true profitability of chili is determined by the out-of-pocket cost.  
6.  If the decision to drop chili from the Wendy's menu were to be based solely on whether or not a profit would be made from it, the decision would be yes, to drop it, because the cost per serving is $1.14, while the selling price is $0.99, causing Wendy's to lose $0.13 per every serving of chili.
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