ational's 2003 revenues by product (restaurant sales or franchise fees) is summarized in Exhibit 1, while the distribution of the company's 2003 revenues by restaurant chain is summarized in Exhibit 2. Each of the exhibits may be found on the following page.
Exhibit 1 ù Wendy's International, Inc. 2003 Revenues: Distribution by Product
Source: "Wendy's International Operations, 2004
Exhibit 2 ù Wendy's International, Inc. 2003 Revenues: Distribution by Restaurant Chain
Source: "Wendy's International Operations", 2004
Company revenues have increased every year since 1998. Over the most recent five years (1999-2003), Wendy's International's net profit margin has ranged from a low of 7.5 percent in 2003 to a high of 8.1 percent in 2001, with a five-year average of 7.6 percent ("Wendy's International Historical", 2004). The industry mean annual net profit margin is 5.7 ("Wendy's International Comparison, 2004).
The external analysis is concerned primarily with the external environment within which Wendy's International operates. Thus, the concern is on the external analysis of Wendy's International with focuses on social, political, economic, and technological factors, as well the competitive situation.
The Five Plus model provides the focus for the external analysis of Wendy's International. The five Plus model includes the elements of Five Forces analysis (competitive situation) and PEST analysis (external environmental factors). The external analysis for Wendy's International is as follows:
The threat of new entrants into the markets in the fast food industry at the level at which Wendy's competes is because the barriers to entry into the industry at this level of competition are high because of the technological expertise and research and development capacity needed to compete in the industry are high.
The buyers in the fast food industry have a substantial level of power because there is great diversi...