White Castle: Time for a Strategic Shift at
the Iconic Hamburger Restaurant Chain?
Hollywood movies featuring a company name in their titles are very rare,
and one such instance is the cult classic movie Harold & Kumar Go to
White Castle (2004). It is debatable whether the protagonists Harold Lee
and Kumar Patel helped make White Castle famous, or if it was the other
way around, but what is certain is that the Midwest/Northeast-based
hamburger restaurant chain has remained a niche player all along.
Although White Castle's founder Billy Ingram has been credited as one of
the inventors of the "hamburger chain" concept in the early twentieth cen-
tury, the company's 2015 revenue of $600 million and 400 restaurant loca-
tions pales in comparison to its competitors' numbers. At the end of 2015,
McDonald's had 14,000 locations, Burger King had 7,000 locations, and
Wendy's had over 6,000 locations. And all these chains were founded a
few decades after White Castle was founded in the year 1921: McDonald's
in the year 1940, Burger King in 1953, and Wendy's in 1969. Despite its
heritage status, and a loyal band of customers known as Cravers, the
question that befuddles everyone following the progress of the chain is:
why has White Castle remained so small?
Some responses offered by industry analysts to that question are as
follow: (1) The company is privately owned and the Ingram family, which
is into its fourth generation of leading the firm, owns 100 percent of the
company; and the CEOs in all its 94 years of existence have been family
members. (2) The company owns all the restaurants, and the family has
refused to either franchise or take on debt to expand. (3) The restaurants
are dated, as half of its 400 restaurants were built before 1960, and the
average restaurant manager has had a tenure of 21 years. (4) The com-
pany has been a stickler to its original recipe, and though it has added
a few new items over the years, it has steadfastly avoided either updat-
ing, experimenting, or responding to new food trends. (6) White Castle has
tried and failed to expand (currently it operates in just 13 states in the U.S.)
into Mexico, Malaysia, Japan, and South Korea-and after that failure the
CHAPTER 2 The Competitive Environment
29
company mindset seems to have receded into a "once bitten, twice shy"
mode. (7) The company is overly reliant on its past heritage, and it con-
stantly “refers” back to its great founder Billy Ingram while chalking out its
future growth strategy.
As its centennial year of 2021 beckons White Castle, the company is in
the throes of a major change—and the media headline sums it up: "White
Castle CEO Bill Ingram steps down after 43 years to hand reins to his daugh-
ter-only the fourth boss of the iconic burger chain since it began in 1921."
Lisa Ingram, the new CEO, is an MBA from Ohio State who joined White
Castle in 1997 as a marketing manager; she has held VP and COO posi-
tions before at the company. Though a company veteran, Lisa is trying to
infuse some new ideas: introducing a new chicken sandwich and smooth-
ies, and greenlighting new concepts. Laughing Noodle, Blaze Modern BBQ.
and Decker's Grilled Sandwiches are part of the "new fast casual" concept
restaurants sponsored by White Castle. But when it comes to the ques-
tion of rapid growth through franchising, she sounds like a chip off the
old block: “If you franchise, while you can expand faster, you're giving up
control of the operation ... I'd be really worried what that would do to the
whole brand."
Discussion Questions
1. Has White Castle remained small by design, intentionally, or have some
external circumstances shackled it?
2. Do you think White Castle's founder Billy Ingram would have been
proud of the company's position vis-à-vis its rivals today?
3. What would you have done if you were in Lisa Ingram's position? What
would your growth strategy for the company be?
Robehmed, N. (2014, August). "White Castle: A Cult Classic Searching for New Sizzle." Forbes.
Retrieved from http://www.forbes.com
AU: What does this footnote
go to?
Video Case
Study
Mission, Values & Strategy
(5 Points)
Exercise: Please watch the video on Ben & Jerry's Ice Cream
and answer the following questions:
1. Please list (handwrite) the personal values of Ben & Jerry's Ice Cream founders'
Ben Cohen and Jerry Greenfield as identified in the video.
2. Please elaborate how the personal values of the founders of Ben & Jerry's have
influenced the development of the company values, in particular the values asso-
ciated with the company's mission statement: Product mission (drives us to make
fantastic ice cream – for its own sake); Economic mission (asks us to manage our
company for sustainable financial growth); and Social mission (compels us to use
our company in innovative ways to make the world a better place).
3. Please elaborate how Ben & Jerry's Ice cream founders' personal values and their
company's values have influenced the company's strategy in terms of Sourcing,
Production, Logistics, Marketing, Financing, Human Resource management,
etc. After 15 years after its sale to Unilever, do you think Ben & Jerry's mission
will change or whither away?
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