Thursday, November 3, 2011

In N Out's expansion to the East

Recently the famous burger restaurant In n Out has been expanding from its roots in California.  The most recent move In n Out has made when they put a meat production plant in the Dallas/ Fort Worth area.  Fallowing the production of the meat plant, In n Out is planing on opening a total of eight new stores in the Dallas area.  Although there is more to it than In n Out just trying to move to Dallas.  With the meat plant constructed in Dallas, it allows In n Out to expand to 13 other states.  The reason it took In N Out a long time to expand this far was because the fixed costs of shipping the meat this far east was very high.  They looked at their trade offs and realized that spending the money to put a new meat plant would be better for making profit.  The marginal revenue of building new stores would also be very high with their production of restaurants in Dallas.  With their expansion they are trying to create more supply of restaurants because the demand for In n Out is very high.  When they first opened in Dallas, there was lines that were four hour lines just for a burger.  With this high demand for their burgers, In n Out would be crazy not to continue expand and to raise the supply of their restaurants.  

2 comments:

Cameron said...

I do beleive that in and out should keep expanding east as far as they can go. They would do very well! But, me being from California, I have had good in and out! Not to bash the in and outs here, but they are of a way lower standard then the ones in California. If in and out wants to exceed greatness and make an even larger profit, and draw more people they need to spend more money on their ixed costs to get better meat and other better supplies. Although it may take a while for the In and Outs here to gain a large enough revenue to be able to afford these items i belive that in the long run it will benefit them greately and they will be able to do a lot better, east, then they already are. Ive seen the lines here, and they are huge! The demand for them is extremely high. I went to one near highland park and they had two lanes of traffic shutdown and a rent-a-cop runing the in and out line! I beleive though that if they spend their money wisely and buy better products that they will be able to make an even larger profit and be ablt to expand tho the east coast of the United States, and possibly out of state.

Ryan said...

I agree for the most part. I believe the reason it took them the time it did was just them waiting for more people in the east to discover it and have a higher demand for it in their hometowns. However, you did the research, not me, so I may be wrong. It could also be that it just took them some time to realize that the demand was so high across the country that they’d almost instantly get back any money they’d have to spend for coming here. But you are right, In N Out made its name so well known throughout the country that when moving here, people acted like it was a gift from Heaven. However, I believe the soon people will grow tired of it. Their cheap prices is one big factor that draws attention, and as the lines diminish week by week, prices will eventually start to rise out of necessity to keep gains at a constant rate. This is only a possibility though, for it would take a very large loss of customers for this to happen.