Swot Analysis Essay Example

Swot Analysis Paper Auntie Annes, Inc. Company Overview Company Overview Auntie Annes, Inc. , the world’s largest hand-rolled soft pretzel franchisor manufactures and sells pretzels. Its products include pretzel dogs, gourmet bread sticks, pizza knots, pretzel kits, mixes, twists, and baked pretzels, as well as various drinks and dips. The company was founded in 1988 by Anne and Jonas Beiler and is headquartered in Lancaster, Pennsylvania. Auntie Anne’s, Inc was purchased in 2005 from Anne and Jonas Beiler by Sam Beiler, the company’s president and chief executive officer. The first franchise was opened in 1989 in Harrisburg, Pennsylvania. (Auntie Anne’s, 2010) Today the company supports over 300 franchisees, with more than 1,050 locations worldwide. The company recorded record revenues in 2008 of 333. 4 million dollars, an increase of 8% over 2007. (Wikipedia, 2010) SWOT ANALYSIS Strengths |Weaknesses | |Socially and Ethically responsible |Franchisee Startup Costs | |Franc hising System |Franchise Labor | |Strong Market Position |Saturated U. S. Market | |Opportunities |Threats | |Expanding Operations Concept |Growing competition | |Growth in International Market |Economic recovery | |Opening Operations in sports arenas |Unfavorable Franchise Legislation | Strengths Socially and Ethically Responsible Auntie Anne’s founders started the company to support there charitable contributions. Mr. and Mrs. Beiler started the company in an effort to support a counseling center. The company has expanded its philanthropy along with its expanding business. Auntie Anne’s has given millions of dollars to the Children’s Miracle network. Auntie Anne’s has helped raise more than $3 million dollars for Children’s Miracle Network affiliated hospitals across the country. Auntie Anne’s, 2010) National Pretzel Day, April 26, is one of Auntie Anne’s largest single-day event fundraiser where participating stores donate a percentage of sales to Children’s Miracle Network. Auntie Anne’s also raises money through corporate payroll deductions and an annual golf tournament. (Children’s Miracle Network, 2010) Auntie Anne’s also provides employees with educational scholarships and home down- payment gifts. There efforts in this arena as well as being a community oriented business serve to foster positive attitudes amongst employees of the company. We will write a custom essay sample on Swot Analysis specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Swot Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Swot Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer This gives them a competitive advantage. Franchising System Auntie Anne’s franchising system has fostered exponential growth of the company. Franchise Business review ranks the company number six in its top 50 franchises for 2010. Each year, Franchise Business Review surveys thousands of franchise owners. The top 50 are then rated among the very best opportunities by their own franchisees. (Top 50 Franchises Large Systems, 2010) Entrepreneur Magazine 500 ranks Auntie Anne’s as follows for 2010; Franchise 500 ranking #50, Fastest growing franchises #59, Americas top global franchises #50. Auntie Anne’s has received the World-Class Franchise ® honor (the most prestigious award in franchising) for the past four years. Auntie Anne’s demonstrates a strong franchising system which includes ongoing support to its franchisees such as; newsletters, meetings, grand opening, internet, toll-free phone line, field operations/evaluations and purchasing cooperatives. Training and marketing support is also given to the franchisees. These attributes are very intriguing to potential franchise owners. Strong Market Position Auntie Anne’s is the largest hand-rolled soft pretzel franchisor in the orld. 2009 figures show that Auntie Anne’s has 792 franchises in the U. S. , 11 franchises in Canada, 211 franchises in foreign countries and 11 company owned. (Auntie Annes Hand-Rolled Soft Pretzels, 2010) This huge footprint enables them to have a strong brand hold on the soft pretzel market. Auntie Anne’s number one status brings its just rewards. Weakness es Franchisee Startup Costs The Franchise startup costs for Auntie Anne’s are not that large when compared to some of the giants in the franchise world, however in its pretzel market segment the costs are the highest. The company’s fees are as follows; Franchise fee $30,000, Equipment $31,500 to 34,500, Construction- $90,000 to $250,000, total initial investment $197,875 $439,100. (Auntie Anne’s Franchising, 2010) Costs for opening a franchise in foreign countries are even higher. These franchise fees could cause an issue with future expansion into the market. Franchise Labor Auntie Anne’s requires its franchises to employee ten workers to run each unit. (The Franchise Mall, 2010) Employees are needed to function properly and smoothly with the majority of those workers being low-paid. This could lead to a workforce of unreliable employees with a high turnover rate. Finding and keeping qualified employees could be a major challenge. Saturated U. S. Market The success of Auntie Anne’s in the U. S. of approximately 800 stores could lead to a cap by the company of opening any new locations. This threat could lead to potential business owners to seek other growing pretzel companies in the market. Opportunities Expanding Operations Concept Auntie Annes is expanding its operations beyond pretzels with a new cafe concept, similar to that of Starbucks. Auntie Annes Cafe will have a walk-up coffee bar with eat-in and take-out food, said Susan P. Matson, Auntie Anne’s spokeswoman. It will include almost the full line of Starbucks products and offer soups, salads, desserts, pastries and sandwiches. (Dale W. Hlaves, 2008) Unlike the typical pretzel outlets that offer no seating, each Auntie Annes Cafe seats approximately 30 people. Similar to other cafes, these serve gourmet coffee, offer a lunch and light dinner menu (sandwiches, pizzas, breads, soups, etc. , and provide wireless internet access. This is a change to the normal operation that may prove to be successful. Growth in Overseas market Auntie Anne’s already has expanded its franchises internationally with 211 foreign stores in locations including Mexico, China England, Greece, Honduras, Hong Kong, Kuwait, Bahrain, Northern Ireland, Philippines and Saudi Arabia. The company has a strong grip on business in the U. S. its goals to continue expansion globally is a must. Pretzels are loved worldwide. Opening operations in sports arenas Prior to the 2008 season, Auntie Anne’s opened its own concession stand at Clipper Magazine Stadium, home of the Lancaster Barnstormers baseball team; pretzels have also been available at Seattle Mariners’ home games since 2008. Continued alliances with other professional and collegiate sports complexes are a huge opportunity for the company. Threats Growing Competition The main competitors in the pretzel market are Pretzel Time and Pretzelmaker both owned by Mrs. Fields and Wetzel Pretzels. The pretzel eateries are very similar except for the fact that Auntie Anne’s has the highest initial investment. The Mrs. Fields businesses have a total maximum investment of $254,000; Wetzel Pretzels comes in at $352,000 and Auntie Anne’s at over $400,000. (The Franchise Mall, 2010) This is probably due to the more recognizable brand of Auntie Anne’s. These other companies are continuing to grow and could be a potential threat to new Auntie Anne’s franchises. Economic Recovery During a slow economy many people are looking for new opportunities to invest or start a business. Ffranchise growth slows as the economy improves as there are fewer people looking to invest. There are fewer executives being laid off and the stock market becomes a formidable competitor to investing your money in a business. â€Å"Good franchise concepts that provide a good value are going to flourish for two reasons,† says Eric Riess, practice group manager of corporate and franchise groups at Greensfelder, Hemker Gale, P. C. in St. Louis. â€Å"One, the enormous pool of prospects available and, two, because during a recession, people aren’t spending less, they’re spending smarter. † (Dale W. Hlaves, 2008) Franchising numbers actually rise during a recession. Unfavorable Franchise Legislation Franchising has great success for its owners; however it can be to the detriment of other local business already present in the market. Legislation that would curtail franchise expansion would harm Auntie Anne’s. Any Legislation that would limit the amount of fees charged by Franchisors on Franchisees would harm Auntie Anne’s profits as well. An example would be if there was a limit imposed on royalty percentages that franchisees pay to Auntie Anne’s. Works Cited Auntie Anne’s franchising. 2010. Auntie Anne’s. 24 March 2010 â€Å"Auntie Annes Hand-Rolled Soft Pretzels. † Entrepreneur. 2010. Entrepreneur Magazine. 4 March 2010 http://www. entrepreneur. com/franchises/auntieannes Auntie Anne’s. 2010. Auntie Anne’s. 24 March 2010 Auntie Anne’s franchising. 2010. Auntie Anne’s. 24 March 2010 Children’s Miracle Network. 2010. Children’s Miracle Network. 24 March 2010 Dale W. Hlaves. â€Å"Legal Affairs. à ¢â‚¬  Smart Business. July 2008. Smart Business. 24 March 2010 http://www. sbonline. com. Franchise Mall. 2010. Franchise Mall. 24 March 2010 â€Å"Top 50 Franchises Large Systems. † Franchise Business Review. 2010. Franchise Business Review. 24 March 2010 . â€Å"Wikipedia. † 2010. Wikipedia. 24 March 2010