Sonic: America's Drive-in
Sonic: America’s Drive-In - Case Analysis
Table of Contents
i. General Background / Key Issues ii. Analysis a. Internal Analysis b. External Analysis c. Business-level Strategy d. Corporate-level Strategy e. Structure and Controls f. Strategic leadership/ Entrepreneurship iii. Case Recommendations iv. Referenced
i. General Background / Key Issues
Sonic was created over 50 years ago, the enterprise started as a small drive in Shawnee, Oklahoma. The company started out as “Top Hat Drive-In” but was changed to “Sonic” because the old name was copyrighted and the slogan their “Service With the Speed of Sound.” Business flourished from 1973 to 1978 with the opening of 800 new stores. However, with the opening of all these stores caused taste variation between each of the stores, even in the same city. This was because each franchise bought ingredients from different vendors. All this caused management to buyout all the franchisees in 1986 for 10 million dollars. The debt from this acquisition was repaid by 1995 after 2 stock offerings. So after all this drama in the company, things got a lot better for Sonic thereafter. They started “Sonic 2000” which made their stores more visually appealing. Sonic also added a new menu items and standardized the menu for all stores in the chain, thus improving the variation in the taste across stores. From 1996 to 1997 the brand recognition increased 23 percentage points from 44 to 66, meaning the brand was becoming increasingly aware to the American people. In Competition with Sonic are McDonalds, Burger King, and Wendy’s. These three companies operate on a much larger scale and are more expanded across the nation than Sonic. They all compete to offer a quick and delicious meal. However, Sonic offers a more diverse menu and the “Drive-In” experience. Personal carhop service and unique made to order menu items are also a staple for Sonic. The
Table of Contents
i. General Background / Key Issues ii. Analysis a. Internal Analysis b. External Analysis c. Business-level Strategy d. Corporate-level Strategy e. Structure and Controls f. Strategic leadership/ Entrepreneurship iii. Case Recommendations iv. Referenced
i. General Background / Key Issues
Sonic was created over 50 years ago, the enterprise started as a small drive in Shawnee, Oklahoma. The company started out as “Top Hat Drive-In” but was changed to “Sonic” because the old name was copyrighted and the slogan their “Service With the Speed of Sound.” Business flourished from 1973 to 1978 with the opening of 800 new stores. However, with the opening of all these stores caused taste variation between each of the stores, even in the same city. This was because each franchise bought ingredients from different vendors. All this caused management to buyout all the franchisees in 1986 for 10 million dollars. The debt from this acquisition was repaid by 1995 after 2 stock offerings. So after all this drama in the company, things got a lot better for Sonic thereafter. They started “Sonic 2000” which made their stores more visually appealing. Sonic also added a new menu items and standardized the menu for all stores in the chain, thus improving the variation in the taste across stores. From 1996 to 1997 the brand recognition increased 23 percentage points from 44 to 66, meaning the brand was becoming increasingly aware to the American people. In Competition with Sonic are McDonalds, Burger King, and Wendy’s. These three companies operate on a much larger scale and are more expanded across the nation than Sonic. They all compete to offer a quick and delicious meal. However, Sonic offers a more diverse menu and the “Drive-In” experience. Personal carhop service and unique made to order menu items are also a staple for Sonic. The
References: Beth, James, Charles Dunaway, Aimee Ellis, Eric Johnson, and Ken Rowe. "Sonic: America 's Drive-In."Cases in Strategic Management. Cengage Learning. 11-24. Print.