Buffalo Wild Wings: Competing for the Future
Buffalo Wild Wings (BWW) has experience rapid and at times explosive growth, since its founding three decades ago. The business, which focuses on buffalo chicken wings and related fun food, was founded in 1982 with a single location in Columbus, Ohio, near the Ohio State University. Today, the business is an owner, operator, franchisor model; the franchising element began in the 1991. Live sporting events are a focus of the customer experience with a typical Buffalo Wild Wings restaurant having 50 or more televisions for viewing sports. Coordinated marketing and coordinated operational execution has allowed for a consistent brand image across locations; buffalo insignia, yellow and black color scheme, and stylized buffalo images help build this brand image. BWW has been successful in growing restaurant locations with 786 company-owned and franchise locations in 44 states at the end of the third quarter in 2011.
Growth Strategy
BWW needs to determine its strategy for competing for the future in which the restaurant industry is growing increasingly competitive and fragmented. BWW has a stated goal to continue to grow domestically and internationally. In order to grow successfully the focus is on the following strategies.
• Continue to strengthen the Buffalo Wild Wings Brand.
• Deliver a unique guest experience.
• Offer boldly flavored menu items with broad appeal.
• Creating an inviting neighborhood atmosphere.
• Focus on operation excellence.
• Open restaurants in new and existing domestic markets and new countries.
• Increase same-store sales, average unit volumes, and profitability.
The current business concept is thought to be able to support a unity base of 1,400 locations in the United States with a target of 40 percent company owned and 60 percent franchisor owned. The first international play for the company was Canada with the opening of a Toronto location in 2011, with plans to open 50 Canadian locations in the next five years.
Business Operations
A typical Buffalo Wild Wings location is open on a daily basis with operating hours of 11 a.m. until 2 a.m. The hours of operation can vary depending on local regulations and day of the week. In addition, franchisors agree to operate their locations a minimum of 12 hours per day. Dine-in and carryout is facilitated through ordering with traditional table service as well as a counter that takeout orders can be placed at. Purchases of food ingredients and supplies are negotiated on a system-wide basis in order to obtain the bes cost possible; additionally all sauces are manufactured by a single company with BWW owning the recipes and seasonings of it's signature sauces to prevent other wing establishments from using the same sauces. Chicken wings are the largest component of the food purchasing costs, and volatility in their prices could have significant impacts on the business. Currently, wings are purchased at market price, although long-term fixed price contracts are a possibility if market conditions warrant the change. BWW restaurants include a full bar, and, in Nevada, gaming; thus the business is subject to the regulations of the appropriate beverage commissions in all states in which it operates and the gaming commissions in Nevada.
Questions:
1. If there is a BWW near you, visit the restaurant or if not take a look at them online (www.buffalowildwings.com). Identify what you see as competitors to BWW.
2. What do you see as the competitive advantage of BWW? Be sure to discuss its value proposition.
3. Where would you place BWW and restaurants it competes with in terms of the retail life cycle?