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Case 6
In-N-Out Burger: Customer Value the Old-Fashioned Way
Most people have at least heard of In-N-Out. But what they may not realize is just how unique In-
N-Out is. This burger chain that is now more than 60 years old has done something that few
restaurants can claim. It has succeeded in opening almost 300 stores without changing a thing.
Chapter 3
1. Describe In-N- weaknesses Note: we have also added Opportunities and
Threats in case you wanted to have the students do a SWOT analysis or expand it into a
SWOT analysis in a class discussion.
Strengths the value it provides for customers, it exceeds customer expectations
The benefit side (including features/attributes) should include all those things that draw customers
in: an offering that never changes, fresh ingredients, food that is made-to-order, friendly and
competent service, customization through the secret menu, and the cool factor that others simply
res
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Weakness Its limited offering and expansion
even the lack of menu items other than the basic burger offering. However, it should also be noted
Opportunities Hard for major chains to replicate what they are doing
stop producing new menu items, they will see a downturn in store traffic. The images of these
Threats Increasing competition in the made to order hamburger market, real estate is
more expensive, food they service has limited nutritional value, they are depended on one
main raw ingredient
There is more competition in the made to order hamburger business. Companies like Shake
Shack, 5 Guys, Smashburger and others may make it difficult for INO expand. There are also
2. Do you think In-N-Out should adopt a high-growth strategy? Why or why not?
While there are certainly more INO restaurants today than ever before (and with the recent
expansion into Texas, INO is now in five states), the company has stuck to a slow and steady
growth strategy. Any discussion of this question should be based on whether or not a faster-
growth strategy would change anything in terms of customer value. If INO could grow faster and
Teaching Suggestions
Start by asking how many students have ever experienced In-N-Out. Students who have will
provide a range of responses to their experiences. Many will echo the kind of positive evaluations
described in the case. Some, however, might say that with all the hype, they had expected more