A Tasty Competitor

Can Wendy’s Become a Staple in Australia’s Fast-Food Industry?

B. N. Dent

I’m sure that we can all agree that in almost every instance of choice within our lives, it is better to have more options. Our never-ending appetite for ‘more’ in life drives our desire to have as many options as possible so that we can ensure that we are making the optimal decision to cater to our needs. This desire for infinite choice is mimicked by the retail industry which in today’s world provides us with an unnecessary amount of options for any given good or service. Across Australia today, you could find hundreds of cookie brands that sell products virtually identical to the famous OREO cookie which in itself is a knock-off of another brand called Hydrox founded in 1908.

Australia’s $22-billion fast-food and takeaway industry is a subset of the retail industry that is heavily affected by the limitless nature of consumer choice. The industry currently employs roughly 200,000 people, contains 36,427 individual businesses and is still expanding. As of mid-September this year, the American-born fast food franchise Wendy’s announced their upcoming arrival in Australia. Wendy’s is currently the world’s third largest hamburger fast-food chain, and it is known for its signature frozen dairy dessert: The Frosty. The company currently operates in 30 countries and territories world-wide and is constantly looking for expansion. Noticing the, only, moderately competitive environment and the steady growth of Australia’s fast-food industry, Wendy’s viewed Australia as a perfect target, but is it likely that they will succeed in their expansion to this foreign land?

If we interpret past trends of similar franchising situations and use them as a metric for future success, then yes, it is likely that Wendy’s will succeed. Today, Australia’s top four largest players in the fast-food industry (Subway, McDonald’s, Domino’s, and KFC) were all founded in America and later franchised out into Australia with astronomical success. A recent example of this was Taco Bell, who despite only being in Australia for a short period of time, recorded a revenue of $28-million. Despite this, there are a range of additional factors that must be assessed when predicting the likelihood of success for a foreign chain branching into Australia. Two essential factors within this range include the consumer’s understanding of the chain’s market position (i.e., a defined product and complementary target market) and the business’s ability to establish brand names (i.e., well-known staples that consumers instantly think of in relation to a business: the Big Mac).

When we consider Wendy’s extreme success of $1.7 billion in annual revenue within the United State’s vastly competitive fast-food industry and the solid establishments of American chains within Australia in the past, it is clearly inferable that they are likely to succeed in our market. In so many facets of our culture, we along with many other nations are heavily influenced by the activity of the US; are we slowly becoming a replica of the US? 99% of the movies and TV shows that we consume are from the US. At this rate, it is likely that we will begin to sound like them and start watching baseball instead of cricket. America’s immensely influential power over the world can be directly attributed to its seemingly impenetrable economy, and unless another nation disrupts/overtakes this powerhouse, their influence on the culture of foreign nations will continue forever.