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Sam Davidson's blog

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Going in Opposite Directions

In business news today, two announcements were made by two different companies going in two very different directions:

And so here we have companies headed in two different directions. Granted, each of these competes in two different industries, complete with separate sets of cultural influences and expectations that influence consumer trends and pricing. But, Southwest has differentiated itself on price and service, and Wendy's has failed at both.

I don't go to Wendy's often, and I am a huge fan of Southwest. The fact that I don't frequent Wendy's has something to do with its struggles. I don't go there because I don't think the food is a good value for the price. It's not healthy and doesn't really taste that great. I really only go there when I'm in a bind or someone wants to meet there.

I use Southwest, however, because it is a good value for the price. Their service is great, and they have a good product. I get where I need to go on time, and don't mind the cattle call or lack of frills.

And so, Southwest is flying to other countries and Wendy's is struggling to not miss earnings-per-share.

While Wendy's does have to compete in a culture that is beginning to see the health detriments of fast food, it could re-brand itself and begin to distinguish itself against industry leader McDonald's, which has lowered prices and begun to offer healthier fare. It would be a long makeover process, and it may require selling its restaurants and going private in order to do it.

Regardless, it must improve service and product, or else no one will be dining in.