Premium Essay

Chicken Industry Economics

In: Business and Management

Submitted By lala2288ify
Words 640
Pages 3

The spectrum of market structures varies diversely from highly competitive markets where there are a large number of buyers and sellers, each of whom having little or no power to alter the market price to a situation of pure monopoly where a market or an industry consists of one single supplier who enjoys considerable control over the market price, unless specific restrictions are placed directly by the government. A market structure such as the Chicken Meat Industry can be deemed as “Perfect Competition (PC)” as it fulfills the following mentioned assumptions:
1. There are many producers in the economy as mentioned in the question.
2. Each individual firm in the market is a Price Taker- the firms cannot control the price of chicken being sold in the market instead they have to simply accept the designated going market rate as the price of their product. This happens due to two major characteristics of Perfect Competition:
a. As there are a large number of suppliers, each of them has a relatively small share of the overall market. As a result, these individual firms are unable to affect price by directly bringing about a change in its own supply because by assumption, each firm is small in size
b. Due to the enormous competition faced by each firm, no single firm can increase the price that it charges above the price charged by the other firms in the market without losing business caused by a large substitution effect away from that firm
3. All firms produce identical goods, as in the case of Chicken Meat Industry where the product i.e. chicken is homogenous. The characteristics of chicken do not vary much from supplier to supplier as a result they are substitutes for each other.
4. Buyers are perfectly aware of the nature and quality of chicken being sold to them as well as being well informed about the price being charged by each seller....

Similar Documents

Premium Essay

A Feasibility Study on Establishing a Free Range Poultry Farm

... * Put the specific establishment of the business. | | | Sir Kenneth Albert Anino | | Table of Contents | * Sum up the necessary subjects of the table of contents. | * Remove the sampling procedure from the Table of contents. | ii | ii | Sir Kenneth Albert Anino | | | | | | | | | PARTS OF THE PAPER | SUMMARY OF FINDINGS | ACTIONS TAKEN | PREFERENCE PAGE NUMBER | PANELIST/S | STATUS/REMARKS | | | | OLD | REVISED | | | List of FiguresList of Table List of Appendices | * Proper alignment of the content. | * Revised the proper alignment. | ivvvi | ivvvi | Ma’am Estherbelle Vinson | | Chapter I | | | | | | | Introduction | * Present facts/figures about the demand for chicken meat. | * Specified chicken industry performance and consumption is presented. | 1 | 1 | Ma’am Rean May GalangMa’am Josefa Carbon | | Background of the Study | * Cite the references. | * Indicate the references. | 1 | 1 | Sir Kenneth Albert AninoMa’am Estherbelle Vinson | | Objectives of the Study | * Present clearly the objectives. | * Well-ordered objectives are presented. | 3 | 3 | | | PARTS OF THE PAPER | SUMMARY OF FINDINGS | ACTIONS TAKEN | PREFERENCE PAGE NUMBER | PANELIST/S | STATUS/REMARKS | | | | OLD | REVISED | | | Scope and Limitations of the...

Words: 1129 - Pages: 5

Free Essay

Optical Distortion Case

...price and continue process its multiproduct and multimarket strategy. Based on ODI limited resources and current situation of poultry industry in United States, it should focus on large-sized chicken farms and price ODI lenses at a higher level for the sake of its profits and its future business plan. II. Introduction With the fact existed in poultry industry in late 1970s that most of the chickens in United States were owned by some large farms. Optical Distortion, Inc., a contact lens company, has developed a kind of contact lens applied on chickens considered to hold enormous market potential. However, it is hard for ODI to decide how to price its products and how to extend its business nationwide considering its own limited resources. III. Analysis and Problem Identifications * Consumer Needs and WTP There are various-sized customers: small farm, medium farm, and large farm. They all suffered the loss caused by pecking order and cannibalism, and now most of them adopt the method of debeaking to reduce the impact of peck order, however, debeaking has some defects itself, and no matter what choice farmers make, they would concern following aspects before making the decision: whether the product or service is cost effective; the trauma that would bring to chickens, since traditional depeaking method would cause damage to the chickens in some degrees; the convenience of product usage is important especially for large farm; the after-sale services means if the......

Words: 1747 - Pages: 7

Free Essay

Kfc in India

...KFC IN INDIA PRESENTATION ON THE CASE STUDY OF KFC IN INDIA Daniel maina Hillary Omondi Senjuur Cheworei Rosa Okode Ratemo Oira Kiiru Maina , Aridi, Ochieng BACKGROUND OF KENTUCKY FRIED CHICKEN KFC KFC is based in Louisville, Kentucky, and is the world’s most popular chicken restaurant chain. Founded by Colonel Harland Sanders in the early 1930s by cooking & serving food for hungry travellers.In 1952 Sanders started franchising his chicken business & named it as KENTUCKY FRIED CHICKEN . KFC is part of Yum! Brands, Inc., the world's largest restaurant company in terms of system restaurants, with more than 36,000 locations around the world. Yum! Brands is run by David Novak,Chairman & CEO . KFC operates more than 5,200 restaurants in the United States and more than 15,000 units around the world. 109 countries and territories around the world. Every day, more than 12 million customers are served at KFC restaurants. KFC Division is run by Cheryl Bachelder, President and Chief Concept Officer KFC’s Entry in INDIA KFC was the first fast food multinational to enter INDIA , after the economic liberalization policy of the Indian Govt. in early 1990s. KFC received permission to open 30 new outlets across the country & Opened first fast food outlet in Bangalore in June 1995 by targeting upper middle class population. Ethical Issues in Business organizations Ethics are “the code of moral values and principles that rule the behavior of a person or......

Words: 1074 - Pages: 5

Premium Essay

Buffalo Wild Wings

...Buffalo Wild Wings: Situational Analysis Buffalo Wild Wings: Situational Analysis Background Buffalo Wild Wings (BWW) is a well-known restaurant chain in the U.S. that was founded in 1982 by Jim Disbrow and Scott Lowery (Whitfield, 2012). Located in 47 US states, BWW has more than 800 outlets, more than half of which are franchising (Stern, 2012). In 2010 the company opened its subsidiary in Canada. Total company’s assets have approximately $500 million (Stern, 2012). BWW restaurants specialize in chicken wings under unique sauces. The outlets also have sport bars with large menus including various salads, burgers and appetizers. For the visitors, in the restaurants big TV screens have been installed to allow everyone watch popular sports (Stern, 2012). Actually, Buffalo Wild Wings restaurants are known for their relaxing atmosphere where people come to spend free time and to eat with their families and friends. BWW restaurants work to satisfy their customers and their attitude to the clients is reflected in their mission (Buffalo Wild Wings Marketing Plan, n.d.): “WOW people every day”. BWW’s corporate everyday activities include four major steps to achieve their mission. The first step is guest-driven. To provide their guests with the great amount of satisfaction focusing on excellent service, food of the highest quality, enjoyable time the restaurant tries to “WOW their guests every day” (Buffalo Wild Wings Marketing Plan, n.d.). The second step to achieving the...

Words: 1280 - Pages: 6

Free Essay

Quiz Maf

...the consistently sales for the last few years, the bargaining power of buyer is medium-to-high for FarmFirst Chickens. The news of the avian virus is informed throughout the country by the Health Department. Caused by the announcement, the public reaction to consume chicken is decreasing. Due to the avian virus outbreak, the bargaining power of buyer is decline or low as the two major supermarket chain back off from the regular order. Attributable to the temporarily cancel order by the giant retailers, some of the smaller customers follow them. As for the result, the sales volume for FarmFirst Chickens will be half for at least the next 6 months. For the short term, if the avian virus can be preserved quickly, the bargaining power of the buyer can be recover to medium-to-high as the sales also can be improved from half of the losses . But if the avian virus keep in spreading for the long term, the sales of FarmFirst Chickens will continue to decrease as the bargaining power of buyer is low. ai. Threat of substitute products. As one of the major player in the chicken supplier’s industry, FarmFirst keep their product position at the equivalence with its competitors. Thanks to the equivalence position in the industry, threat of substitute products are low-to-medium. This is because consumers mainly use chickens in their nutrients. But in the recent time, some of the consumers substitute the......

Words: 579 - Pages: 3

Free Essay

Eco 550 Week 4 Discussions 1 & 2

...Week 4 Discussions Discussion 1 Production Economics   The economic environment is likely to affect short run production for the next 12 months. It influences the use of resources in companies and the economy in general. The economic environment is influenced by the interaction and integration of other macroeconomic parts (William, 2012). As a result of this the economic environment dictates the pace of economic growth, inflation, and national income. This variable is the most likely to affect production in the short run since it changes frequently and rapidly. When there is an adverse change in the economic environment, production is halted since the cost of acquiring resources rises. The raw materials become expensive and thus organizations have to work under tight budget. The interest rates of borrowing increases, thus the burden has to be passed to the consumers. The sales will ultimately reduce since nobody want to spend on expensive products in a tough economy. Therefore, the firm has to cut its production to evade excessive supply over demand. Indeed for the next 12 months there may be a drastic change in production.   There several strategies to be implemented in order for the managers to avoid this economic environment draw back. The managers should make orders of raw materials earlier and when their prices are at lowest. This will protect them from inflationary prices of the raw materials. Low cost of raw materials will reduce the price of the products;......

Words: 837 - Pages: 4

Premium Essay

F&B Segments Research

...Key characteristics of the industry Companies in the F&B industry are defined by the Singapore Department of Statistics (2011) as “establishments engaged in the sale of prepared food and drinks for immediate consumption”, which consists of restaurants, fast food restaurants, food caterers and others (food courts, cafes, etc). This is consistent with The Chicken Rice Shop’s (TCRS) product offering consist of local food fare and has a “quick serve” restaurant concept (The Chicken Rice Shop 2010). Thus the identified industry for TCRS is the F&B (F&B) industry. More specifically, in the industry segment of Fast Food Outlets. Size of Food & Beverage Industry (as at 2010) % Growth from 2009 to 2010 Number of Establishments* 6,197 + 3.8% Number of Employment 91,264 + 1.9% Operating Receipts ($) 6,239,943 + 10.6% Total Operating Expenditure ($) 5,918,149 + 10.2% *Does not include unregistered establishments and establishments which provide both lodging and F&B services. (Singapore Department of Statistics 2010) Statistics for each industry segment 4000 2000 0 Establishments Operating Receipts Operating Expenditure 376 3257 2261 304 803 2320 711 2406 775 2259 591 2293 Fast Food Outlets Restaurants Food Caterers Others Employment Statistics for Each Industry Segment Employment 0 5793 13159 35150 37163 Others Food Caterers Restaurants Fast Food Outlet 5000 10000 15000 20000 25000 30000 35000 40000 Among the four industry segments, the only industry segment that has shown......

Words: 1457 - Pages: 6

Premium Essay

Weighing Opportunity Costs as follows. Two people, Michelle and James live alone in an isolated region. They each have the same resources available and they grow potatoes and raise chickens. If Michelle decides to use all her resources growing potatoes, she can grow about 200 pounds a year. If she devotes all her resources to raising chickens, she can raise 50 a year. If James devotes all his resources to growing potatoes, he can grow 80 pounds a year. If he devotes all his resources to raising chickens, he can raise 40 a year. Now we will answer a few specific questions about the scenario. What is Michelle’s opportunity of producing potatoes? The opportunity cost of producing potatoes, if all resources are used, is not raising any chickens. If Michelle used all resources to grow the potatoes, no resources would be left to raise chickens. What is Michelle’s opportunity cost of raising chickens? If Michelle decides to use all resources to raise chickens, her opportunity cost would be growing potatoes. If she uses all resources to raise chickens, nothing would be left over to grow potatoes. What is James’ opportunity cost of producing potatoes? His opportunity cost of producing potatoes would be not being able to raise any chickens. What is James’ opportunity cost of raising chickens? If James uses all his resources to raise chickens he would be forgoing producing any potatoes. CONCEPTS OF MICROECONOMICS Which person has an absolute advantage in which......

Words: 844 - Pages: 4

Premium Essay

Power Root Berhad

...the challenges successfully. Next, business environment also helps to identify the organization’s strength and weakness in view of the technological and global developments. With the implementation of business environment, the image of an organization can improve by showing their sensitivity to the work environment. There are three important of components in business environment such as the macroenvironment, the microenvironment and the internal environment. The example of organization in the business environment is The Chicken Rice Shop (TRCS). The logo of The Chicken Rice Shop The history of The Chicken Rice Shop was starting on 18th June 2000, the first restaurant of The Chicken Rice Shop was opened and the response was overwhelming. Nowadays, there are 60 and more outlets which has a wide network of family restaurants strategically located in major shopping malls, business and residential areas across all markets in Malaysia. The chicken rice who serves by TRCS is authentic “grandmother’s traditional Hainanese secret recipe” brought down from generations and maternal grandmother’s treasured recipe from Penang. The recipes were perfected and introduced into the menu. A special selection of local Malaysian delicacies in a mode, clean and...

Words: 508 - Pages: 3

Free Essay

Optical Distortion Inc

...lenses for chickens. These lenses offer farmers a unique cost saving opportunity and are more humane and efficient than the current de-beaking method. ODI, with help from New World Plastics has developed this commercially viable technology to reduce cannibalism by inducing astigmatism. With a patent holding off competition for at least three years, ODI needs to decide how to price contact lenses to ensure high adoption and profitability which will fuel ODI’s ability to circumvent competition through further investment in R&D – a key requirement to be able to establish themselves as a multiproduct, multimarket company which can provide effective service anywhere in the country. ODI should initially target Large Farms with 100,000+ birds with this product at a price of $0.16/pair because this contact lens technology yields the following superior results versus current debeaking method: greater reduction in cannibalism by 4.5%, zero chicken traumas, no risk versus medium risk with de-beaking, and a reduction in feed costs. There are several segments within the poultry industry – Small, Medium, and Large farms characterized by 10,000 or less birds, 10,000-50,000 birds, and 50,000+ birds, respectively. Based on the case data, the US Poultry industry is consolidating at a rapid rate. For instance, in 1964, 1.2M farms represented 38.3% of the entire chicken industry and managed 343M birds. Five years later, the number of farms managing roughly the same number of chickens......

Words: 1592 - Pages: 7

Premium Essay

Impact of a Borderless Society

...Components of two meals: Breakfast: Coffee Creamer Mixed green salad Pico de gallo Cheese spicy guacamole Dressing Lunch: Chicken enchilada soup (homemade), ingredients include chicken, diced tomatoes, black beans, onions, green pepper, various spices, cheese Club crackers The brand of coffee that I use does not state on each label which country their beans come from. Instead, they list on their web site the countries where they grow or acquire their coffee beans. These countries include South and Central America, Indonesia, Africa, the Caribbean, and in the USA, Hawaii (, n.d.). The salad greens we use are packaged by Dole. The package does not state that these greens came from outside the United States, so they are produce from some place within the United States. The pico de gallo we use is a premade selection that is prepare in the United States. The spicy guacamole brand that we use is made in Mexico and shipped into the United States. The dressing we use is prepared in the United States, but it does have some ingredients that could be from outside the United States. However, the labeling on the package does not state the origin of all the ingredients. The chicken in our soup is local chicken. There are numerous chicken houses in our area that raise both layers and roasters, so most of the chicken we purchase is locally raised. The tomatoes, onions, and green pepper were purchased at a local farmer's market during the season for these......

Words: 1173 - Pages: 5

Free Essay

Chicken Run

...INTRODUCTION Excel Poultry & Meat Sdn Bhd (EPM) was established in 1998 to carry on chicken farming and supplying of whole chickens to various outlets in Malaysia. It is a subsidiary of PCK Holding since 2005. The set up was a small and medium sized enterprise (SME) located in Kluang, Johor. EPM was a member of Federation of Livestock Farmers’ Association of Malaysia (FLFAM). Since there is no dietary prohibitions and religious restriction against chicken consumption, it was the most popular and cheapest source of meat protein among Malaysians. In addition, the surge of quick-service-restaurants (QSR) had facilitated significant growth in chicken consumption. Also, the traditional Malaysian delicacies were equally popular with patrons. Hence, EPM business was doing well. EPM starts the business with an initial capital of RM3.6 million and with 20 employees. Now, EPM had more than 200 employees and started positioning itself as the top 5 chicken suppliers within mid-tier producers in the country. The company was able to maintain its operations and started to make profits in the poultry and meat industry since the demand for chicken remained buoyant. Encik Selamat expand his business to the superstores that mushrooming throughout the country like Giant, Tesco, Macro, Carrefour and the like. Together with his management team, he established good promotional strategies and closely managed all functional units. Demand from superstores continued and was spread to institutional......

Words: 1210 - Pages: 5

Premium Essay


...1. Executive Summary We have decided to select Kentucky Fried Chicken (KFC) as our choice. There are five sections in this essay. The first section is to inform you the key elements in the paper. The second section will address the most important issue confronting the firm. Section three is external analysis. In this section, the external environmental analysis will be discussed. The fourth section is internal analysis. The same with section three, we will make our analysis of internal environment of KFC. In the last section, we will give our recommendation to KFC to help them further success. The more detailed information are as following. 2. Issues and Outlook Profile KFC is one of the world's largest fast-food chains, which held more than 55 percent of the US market in terms of sales. It is also one of the first fast-food chains to go international. Nowadays, KFC operates more than 5,200 restaurants in the United States and more than 15,000 units around the world (Loh, 2009). KFC's early international strategy was to grow its company and franchise restaurant base throughout the world. By 2000, however KFC refocused its international strategy on several high growth markets such as Canada, Australia, China, Thailand and so on. KFC planned to base much of its growth in these markets on company-owned restaurants, which gave KFC greater control over product quality, service and restaurant cleanliness. In other international markets, KFC planned to grow primarily......

Words: 1080 - Pages: 5

Premium Essay

Supply and Demand

...A business that depends on a product or service for success depends on the choices of consumers. Any business’s success relies on the ability to anticipate what the trends are from the consumer consumption patterns. The meat industry is one of the leading industries that have had varying degrees of success. According to Lawrence (2006) “Per capita red meat and poultry consumption has increased 8% between 1980 and 2005 and now stands at 187.5 pounds per person on a boneless equivalent basis” (para. 2). The writer will investigate the trends in consumption patterns, which include the utility derived from meat, changes in demand, market prices and the elasticity of demand for meat. Economics, the law of supply and demand, and discuss factors that lead to a change in supply and demand will also be discussed. Economics is defined by Merriam-Webster Online as “a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services” (2008). Economics can be seen as a study of how people choose what to buy, with the resources available, and the motivations behind those decisions. The law of supply is the relation between the price of a good and the quantity available for sale at that price. The law of supply states: “quantity supplied rises as price rises, other things constant, and quantity supplied falls as price falls, other things constant” (Colander, 2008, p. 88). The law of demand states: “quantity demanded rises...

Words: 1087 - Pages: 5

Free Essay

Chick a File - Still Working File an American fast food restaurant chain. Chick-fil-A was founded by S. Truett Cathy, the chain's former Chairman and CEO in May 1946, and first restaurant In 1961. Currently it has more than 2,000 restaurants, mainly in the southeastern United States. Its headquarter is in the Atlanta, Georgia, specializing in chicken sandwiches. Porter’s Five Forces Model Porter's five forces analysis helps us analyze the level of competition within an industry and business strategy development. It draws upon industrial organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of an Industry. Those Five Forces: * Existing Rivalry * Threat of New Entrants * Threat of substitutes * Buyer Power * Supplier Power 4. a) Opportunities for profit * Good quality Good marketing , after 15 years in the fast food business, Cathy found a pressure-fryer that could cook the chicken sandwich in the same amount of time it took to cook a fast-food hamburger.[5] Following this discovery, he registered the name Chick-fil-A, Inc. The company's current trademarked slogan, "We Didn't Invent the Chicken, Just the Chicken Sandwich," * "Eat Mor Chikin" is the chain's most prominent advertising slogan, created by The Richards Group in 1995. The slogan is often seen in advertisements, featuring Holstein dairy cows[15] that are often seen wearing (or holding) signs that (usually) read: "Eat Mor Chikin" in all capital letters.......

Words: 535 - Pages: 3