In-N-Out Burger Research Paper

In-N-Out Burgers has a rich history that has generated a loyal consumer base. Harry Snyder introduced California's first drive-thru hamburger stand in a space barely 10 feet square at Francisquito and Garvey in Baldwin Park (In-N-Out Burger, N.d. ). This entrepreneur would wake up every day before dawn and go to the meat and produce markets to pick out fresh ingredients that would be used in the burger preparation for that day. The same strategy is still in use today as each location of the business receives their ingredients fresh in the morning for that day's estimated demand. The beef that they use to cook the burgers is never frozen and this improves the quality of the food that they serve.

Analysis

Part of In-N-Out's success is embedded into the simplicity of the operating model. The company only serves burgers, fries, and drinks which makes their product offering one of the simplest in the industry. Most fast food franchises have expanded their menus significantly and their kitchens appear to be complicated arrangements of all kinds of different contraptions. However, In-N-Out still prepares food much like it did in the beginning. The company explains it this way (In-N-Out Burgers, N.d.):

We make them from fresh, 100% pure beef. They are free of additives, fillers and preservatives of any kind. But the focus on quality starts well before we deliver our hamburger patties to our stores. We own and operate our own patty-making facilities in Baldwin Park, California and Dallas, Texas. Since we only serve burgers, fries and drinks, making a high-quality hamburger patty is everything to us.

It is not only the menu that is simplified.The ingredients are delivered from the company's internal distributors that have been acquired through vertical expansion. While other companies are trying to innovate with their product mix, In-N-Out has found balance in the exchange between customer satisfaction and operating complexity. With its chain of about 200 restaurants throughout California, Arizona, and Nevada, the family-owned company expanded its sales by 9.2%, to $308 million, in 2003, a rate just about double the fast-food standard. Analysts estimate In-N-Out's margins at 20%, again supersized for the industry (Gofferdson & Aspinall, 2005).

The trend in many industries is to focus on product "innovation" but in reality this often lends to complexities that are hard to manage and deter from customer satisfaction. Managers aren't blind to the problem and nearly 70% admit that excessive complexity is raising their costs and hindering their profit growth, according to a 2005 Bain survey of more than 900 global executives (Gofferdson & Aspinall, 2005). Although innovation can help to drive a business model, the trend is to try to innovate for the sake of innovation and ignore the costs and the effects on the overall business model. In-N-Out represents one of the company's that has excelled in their industry and maintain consistent growth by avoiding the temptation to continuously innovate with new products.

Competitive Landscape

In-N-Out competes with many other operations that target the same burger niche as well as other sources of food as well. For example, consumers may choose other diner options that are also convenient such as Subway or Panera's Bread if they are more health conscious. However, in the burger niche,.....