Question

Consider the following scenario – In March 2020, Wendy’s fast food chain did a national launch of a new breakfast menu to be offered at all of its US locations. Initially, people were very cautious about eating breakfast at Wendy’s since widespread lockdowns due to the COVID-19 pandemic started just after Wendy’s did their national launch, and lockdowns kept many potential customers stuck at home. Wendy’s then began an aggressive online promotion campaign, particularly targeting “essential workers.” By mid-summer many more people were venturing out of their homes, and many were eager to sample the menu, due to boredom fatigue, curiosity, and a pent-up desire to get out of their homes. What do you predict happened at each point of this series of events (so provide your answer by writing one of these words in each blank line for a. to d. – increased, decreased, stayed-the-same)? a. Short-run profits for Wendy’s breakfast sales, post-essential workers promotion _____________ (0.5 maximum point) b. Short-run profits for Wendy’s breakfast sales, mid-summer ____________ (0.5 maximum point) c. Short-run profits earned by McDonald’s breakfast menu sales, mid-summer ______________(0.5 maximum point) d. Overtime (next 3 to 5 years), the profits earned by Wendy’s breakfast sales _________________(0.5 maximum point) e. List the key assumptions you are making, given the answers you just provided: (3 maximum point)

Answer 1

List of key assumptions

1. The sales of other fast food chain like Mcdonald remian same .
2. In long run the economy is adjusted back to normalization that is over aperiod of 3 to 5 years .
3. Overtime (next 3 to 5 years ), the sale will start to decline as the breakfast menu get older

Blanks

• Increases - Because when essential worker are targetted and the promotion are done , the short term profit are gonna rise up due to high demands among the esential worker for breakfast menu
• Increases - Because of people ventuing out and already online promotion compaign of targettig the customers the slaes of brekfast menu by mid summer is increases.
• Remain the same - Because the macdonald as we assumed that all the brands fast food chain which are not affected much by the covid 19 will have same sales in summer , it will normalized to same even though it can decrease during the short term.
• Decrease -because any product when launched has a high return in the short term or increasing revenue but as soon as the time passe its value decreases and the evenue or profit earned kept on declining as we know this from product development cycle .

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