CHICAGO —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Cracker Barrel has done that, he said, and so have Starbucks, Ruth’s Chris Steak House, Taco Bell and Olive Garden. What they’ve actually done is control factors relating to the supply chain, delivery chain and products that give them an edge over competitors, Williams said. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Investor Warren Buffet coined the term “moat” to explain how companies must erect barriers to entry to protect their profits, much like a moat around a castle kept out invaders. Williams outlined his views during an educational session at the National Restaurant Association Restaurant, Hotel-Motel Show. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Williams’ presentation was based on Kanbay’s 2007 edition of “Competitive Advantage Report: Restaurant & Beverage,” a study of 61 brands in those industries. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Among the key findings are that restaurants are not meeting consumers’ desires merely by expanding the number of units. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
About 86 percent of the restaurants covered in the study in 2007 had lower ratings for delivering what customers want. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
The casual-dining segment showed the largest decrease in competitiveness. Such chains as Applebee’s, Chili’s and Red Lobster have lost competitive advantages from last year. Consumers said the chains lagged in menu quality and customer service. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
The study also found that Starbucks and Cracker Barrel were the only restaurants to make the top 10 most-desired list because of the experience they delivered to customers. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Being most desired can generate more sales, but Williams said being among the most competitive also could bring a higher return on investment. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Among the top 10 most competitive brands were Taco Bell, Olive Garden, Outback Steakhouse, Cracker Barrel, Logan’s Roadhouse, LongHorn Steakhouse and IHOP, according to the study, because they were best at meeting consumer desires across delivery attributes, or moats. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
The moats for the supply chain show how competitive restaurants are in three areas: economies of scale, economies of skill and cost containment. The moats in the products category cover design dominance, brand perception and routine reliance, or frequent use. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Restaurants are particularly strong in competitive advantages in the supply chain. Taco Bell stands out in economies of scale. Chick-fil-A, Cracker Barrel, LongHorn, Logan’s, Olive Garden and Ponderosa Steakhouse rank high in economies of skill, which represent core competencies. IHOP does well in cost containment, which delivers comparative quality at a fair price. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
The study spotlighted the strengths of Cracker Barrel, Starbucks and Ruth’s Chris to give a clear picture of what they deliver to consumers. Cracker Barrel’s strengths are in diner safety—or food free of contamination—reputation, ambiance and staff knowledge of food, the study found. Starbucks excels in staff knowledge, staff responsiveness, ambiance and reputation. Ruth’s Chris’s strengths are quality food, diner safety and staff knowledge. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Cracker Barrel’s strongest competitive edge is its goal to provide a dining experience through its focus on nostalgia and “safe sense of home,” the study found. The food quality at Ruth’s Chris is its most notable strength, and Starbucks’ coffeehouse experience and customer service give it an edge over competitors. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Williams said restaurants could build moats for themselves whether they have only a handful of units and are competing against a restaurant down the street or against the big chains. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
One area in which restaurants are weak is in the delivery chain, which includes a company’s ability to lock out competitors. Williams advised attendees to look at that category as the place to gain a competitive edge. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
He cautioned, however, that moat building is more about the business model than marketing. Restaurants have to build performance before trying to build an image, and they have to proceed slowly. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
“Build one moat at a time,” he said. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.
Kanbay Research Institute in Herndon, Va., is an independent group within Kanbay International Inc. It specializes in research that measures how well companies are meeting consumers’ functional, emotional and economic demands. —The secret to attaining a competitive edge is simply to build a “moat” around your brand, said Gary A. Williams, president and founder of Kanbay Research Institute.