Sonic Corporation Analysis

Core Competencies:

1. Carhops - Served customers in their vehicles.

Strategies:

1. Excellent quality - Freshly prepared products

2. Store Image - "Retrofit" packages

3. Franchise to Corporate Focused

a. Advertising Program/Promotions

b. Cooperative Food Purchasing Program - Reduced food suppliers to 18.

c. Quality managed by Corporation

d. Restructuring of complete corporate staff

e. Got rid of franchise board members.

f. Centralized Training.

4. Unique Experience - Carhops

5. Controlled Future Growth (Franchise and Corporate)

6. Market Research on Consumers.

7. Order Speed - Very quick time from when customer places or till when the food is in their hands.

8. Customer Loyalty - Average customer ate there 2 times a week.

Turn-Around

Sonic was in trouble around 1980 where board members quarreled and almost all operations were controlled by franchise owners (Advertising, buying food, etc) and there was no central control of Sonic. Loses were being posted $295,700 in 1980. Things needed to be changed if Sonic's was to survive. Smith (owner of sonics) decided to go outside the company and bring in new management and on Nov. 1, 1983, C. Stephen Lynn joined Sonic as president and chief executive officer. (693) Around 1984 top level management was reorganized and restructured. The "bag system" was phased out along with this restructuring. The new management team that was in place by 1984 focused on 3 critical issues:

1. The franchise owners and corporate owners had to "buy in" to it.

2. The plan had to be simple enough to be executed.

3. It had to provide visible evidence of working by improving profit for the franchise owners. (694)

Thus from these new focus points the new strategies were put together and account for the majority of the list above.

Working more as a team also helped greatly with advertising, purchasing power, management and training centers, in this way they are also a lot more efficient in what they do.

Data Analysis:

1. Profitability

a. ROS - Steady increase from 1989 - 1991, very good sign of turning the company around.

b. ROA -