Shake Shack Case Analysis

As shake shack considers a potential entry into Vancouver market, a few threats it would face are: perfect competitive market structure, customer stickiness, understanding of local taste preference, food safety, and health concerns.

The food industry is, obviously, facing a perfect competitive market environment, of which the barriers to entry and exit are both lower those of other industry. Being the particular field of fast-food industry, Shake Shack need face some very competitive magnates like the McDonalds’, the KFC, Kari Kitchen etc., which currently exist, and, at the same time, it may also meet extra challenges from the brands that are potential to enter the market in Vancouver. In addition, products presented in the fast-food industry are highly substitutive, showing the reliance on customers’

First of all, there is no space for Shake Shack to bargain with its customers because the market price in such market structure is stable and fixed. Next, Shake Shack’ focusing on perfecting burgers and fries actually leads to a deficiency of diversity of products. At the same time, it should take more efforts on its promotion and publicity, and the anti-chain- chain model that set for curbing the number of sub stores should be mitigated. Besides, tableware provided within the store are disposable, violating the expectation of the society to be environmentally friendly. Plus, since Vancouver is a city where most of the land has a small population density, the location of the physical store should be pinpointed to gain a greater passenger flow. Besides, the cost of labors increases gradually. Many reasons are accounted for such phenomenon like citizens’ increase of education level that leads to a higher expectation, the low interest rate which causes too much money flow into market, ending with an inflation, and so