Question

1. Provide a SWOT analysis of A&W.

2. Provide a financial assessment of A&W.

Answer 1

Ans(1) SWOT ANALYSIS OF A&W

A & W restaurants chain belongs to American food company founded in 1919 by frank wright and Roy Allen .

Swot analysis consists of analysis of a firm's-----

Strengths

Weaknesses

Opportinities

Threats

STREANGTHS OF A&W-------

* The giant Restaurant chain is a big brand in in its industry and has a team of owners and supporting staff who share a common goal of growing this famous brand.

*It is the longest running fast food chain in US

* The A&W brand is very popular among food lovers

* It has simple goal of building profitable sales

WEAKNESSES OF A&W--------

*Its price is higher than the competitors'

* It's YUM brand performed badly due to poor management

* Due to lesser sales promotion efforts, most people are unaware of A&W

OPPORTUNITIES OF A&W-------

* The company has growth prospects after it has collaborated with A Great American Brand LLC

* The company can touch new heights if it initiates national level advertisement

* The company is planning to provide range of healthier food options considering obesity among American citizens

* Compliance with the original core values of the brand brings about an opportunity to rebrand A&W

THREATS TO A&W---------

* As there are so many substitutes available in the fast food market at cheaper rates,consumers may shift to other brands

* As Americans are prone to obesity so,they,now are inclined to healthy food habits, thus they prevent fast food like fries, burgers, Poznań etc.

* It's biggest competitor McDonald is holding large chunk of market share,which is its big threat.

Ans(2) FINANCIAL ASSESSMENT OF A&W

*A&W revenue royalties fund is fast growing due to consistent increase in store sales and number of stores joining in the royalty pool.

*There are strong prospects of dividend growth as currently the company has dividend payout rate below 100%

* The company stores report increase in sales volume by 13% in 2018 with the introduction of new range of popular vegetarian burger called the Beyond Meat Burger

* The restaurants revenue for first 9 mounths of 2018 was $ 923 M with growth rate of 13.1% while royalties were $ 27.7 M
* The cash flow of A&W has seen a growth rate of 12% with $18.8M

* The company less not much levered Asia its deb5 equity ratio is 0.4:1, which is quite below the ideal ratio of 2:1

* The current market cap of the company is at $437.2M and meanwhile it has th3 growth potential of 10% in the following year.