Case Study Six: White Castle Restaurant

Case Study Six: White Castle

Workshop 3

New Product Development

Case Study Six: White Castle

White Castle is a fast food restaurant that is responsible for inventing the fast food industry that we know today. In business since 1921 and currently having 385 stores system wide (M. Anstendig, 2004, p. 198), they have witnessed a rapidly growing market with many competitors. In recent years a malaise has come over the industry and sales have started to slump. Many competitors have countered the slow growth by opening more stores, and diversifying their menu. Through all this change, White Castle has remained steady and focused on their limited menu, making them a unique fast food establishment among their competition.

Even though it is good to have a niche in the marketplace, this uniqueness can also cause a business to lose market share, threatening its very existence. To counter this problem, White Castle will need to reassess its strategy and explore new ways of growing their business.

In this paper we suggest that White Castle expand their menu, and offer drive-in and home delivery services to customers. A serious look at franchising in addition to corporate owned stores should be explored. Expansion in the market place can help White Castle to increase their market share.

We also suggest expanding their frozen food offerings and properly promoting those products will increase their national market share and get their product out to people who normally do not have access to a local store.

Market Strategy

White Castle has been in business since 1921. They practically invented the fast food business with their innovative techniques to cook hamburgers and keep their product warm. White Castle is privately owned and is not franchised. The company owns all of its units, which allows them to control the quality of their product.

The marketplace that White Castle is facing is one of change. Consumer eating habits are shifting from going out to eat, to eating at home. Take out, and home delivery has become popular methods of “eating out” without actually going out to a restaurant.

White Castle can survive in this new market if they are willing to adapt to the new environment. They have already adapted somewhat by selling their hamburgers packaged as frozen snacks available in most grocery stores. White Castle’s expansion in the market is at a growth rate of 10 to 15 new stores per year. The company finances this growth from its own funds and keeps the growth steady. If White Castle wants to increase their market share at a faster pace, they might want to consider moving towards franchising their business model.