Sonic Case Study :: essays research papers

Executive Summary Beginning with one restaurant, Sonic has become the largest drive-in chain in the United States. While they are smaller than their competitors, they are still leading in sales growth, customer loyalty and customer satisfaction. Sonic restaurants saturate the southern U.S. This gives them the opportunity to expand to other area. However, Sonic is reluctant due to the colder climates and their basis as a drive-in restaurant. Sonic should look at adding or combining capabilities to it’s restaurants to increase competitiveness and make it easier for them to expand into other areas without limiting themselves. Situational Analysis In 1953, Troy Smith, the founder of SONIC and World War II veteran, was living in Shawnee, Oklahoma. Troy dreamed of owning his own restaurant business. In fact, he had already tried twice. Troy first owned a small diner called the Cottage Cafà ©. The income he received was barely enough to make a living for himself and his family. Troy sold the Cottage Cafà © and bought a bigger restaurant. His next business, the Panful of Chicken, was so successful that he tried opening more. Unfortunately, fried chicken didn't do well in early 1950s Oklahoma and Troy closed his Panful of Chicken restaurant. Troy then owned a steak house that had a root beer stand attached. This root beer stand, called The Top Hat proved more profitable and eventually outlasted the steak house. While traveling to Louisiana, Troy saw some homemade intercom speakers in use at a local hamburger stand. He contacted the innovator in Louisiana and asked him to make an intercom for the Top Hat. He then hired some local electronics wizards to install the system. He then added a canopy for cars to park under and servers to deliver the food right to customers’ cars. During the first week after the intercom was installed, the Top Hat took in $1750. With his new partner, Charlie Pappe, four more Top Hats were opened. However, their lawyers informed them that the Top Hat name was copyrighted. They changed the name to Sonic to go along with the restaurant slogan of "Service With the Speed of SoundSM."1 In 1973, a group of ten principal franchise owners became the officers of the company. Shares were offered to each store owner. Because of the amount of stock offered, Sonic became a publicly traded company with 165 stores in the chain. Between 1973 and 1978, Sonic grew tremendously. 800 new stores were opened and a Sonic School that formally trained new managers was established.