From traditional drive-throughs to food trucks, the fast-food landscape has never been more crowded or competitive. Yet, despite its odds, Pal’s Sudden Service – a U.S. chain of local hamburger restaurants – is experiencing steady growth and continues to expand. It’s all about scale, says innovation and competitive strategy expert Gary P. Pisano.
In his recent case study, the Harvard Business School professor examined how the burger whiz manages to flourish in a market that is top-heavy with mega corporations. This research, in conjunction with Pisano’s forthcoming book “Innovating at Scale” (PublicAffairs, 2018), offers insight for small-scale businesses looking to expand, as well as those just getting started.
Pal’s strategy, according to Pisano, has been successful due to three factors:
- A deliberate, slow-growth strategy – they expand when they have the right processes and personnel in place
- A unique owner-operator model in which managers are partners with corporate leaders
- A commitment to quality products and service through continuous education
This all adds up to a winning game plan in a competitive market. As Pisano says, “It’s a great example of a company with a clear understanding of their strategy and sticking to it, and understanding what the trade-offs are and willing to tolerate what those trade-offs are. I think that’s a hallmark of excellent strategy.”
By structuring its business model so the potential drawbacks of smallness become advantages, Pal’s defies fast-food norms, proving that organic growth versus projecting unrealistic expectations is a viable model for success.