...INTRODUCTION Fast food, a kind of food can be prepared and served in a short time, is one of the most controversial and frequent words in the U.S. even in the world. Fast food is commonly considered as an inexpensive meal with much easier preparation than the process at home. As the economic growing, many modern people have to live and work in a very fast tune. They do not have much more time for buying ingredients and preparing food at home so that they’re eager to find a fast and convenient way for their meals. Fast food is one of the ideal solutions. Therefore, more and more fast food restaurants opened. The fast food industry revolutionized the food industry, affecting the lives of the people who produce it and the people who eat it, and the fast food industry has become a large market in the U.S. Fast food companies usually build their businesses in form of franchise chains. Those fast food chains have grown at very fast rate in the past years. By far, the U.S. fast food industry is the largest in the world. Some global fast food brands such as McDonald’s, KFC, Burger King, and Subway, has built a great market share in the world. According to the statistics report form Statista (Richter), “in 2010, the fast food industry generated total revenue of 184 billion U.S. dollars in more than 300,000 restaurants, employing 3.9 million people.” Certainly, the fast food market value is still growing today, and the fast food chains exist in almost every city in the U.S. The fast food industry...
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...Factors | Opportunities | Demographic | * (O) Fast food saves time and efforts of people so it’s a good meal for people. (Bose, 2012) * It is an opportunity for fast food industries as it is a ready to eat food and people who go on work prefer to eat it as it saves their time. * (T) Large percentage of baby boomers is becoming threat for fast food industries. . (generation in the workplace in the united states and canada, 2012) * 31.9% of the whole Canadian population is covered by Baby Boomers and they don’t prefer to consume fast food which is going to be a threat | Socio-Culture | * (T) People are stepping backward from fast food which is going to be a big threat in future (Lojitmairembam, 2013) * Now, people are becoming more health conscious. They are stepping back from fast food as it does not contain any vitamins, minerals and fibres and this going to be a threat for fast food industries industries in future. | Economic | * (T)Increasing minimum wage rate is going to be a threat for the fast food industries. (Drum, 2013) * As the minimum wage rate increases for the fast food workers than the fast food industries have to pay more to the worker which decrease the profit margin of the industries. * (T)Inflation and exchange rates are the other threats for fast food Industries. (Rodrigo, 2012) * Inflation rates and exchange rates both effects the supply and demand relationship of raw material which directly affect the industry’s production...
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...Case 2 The Fast Food Industry A Porter 5-forces model of the fast food industry-----Wu Rongrong The threat of new entrants in the fast food industry is high. Because there are no legal barriers which would keep them from entering the industry. The major barriers in which a firm faces in the industry are the economies of scale and the access of the distribution. In order for a firm to enjoy success in the industry, they must spend a large amount of capital on advertising and marketing. The industry is very competitive because firms are always attempting to steal customers from each other. Access for distribution is crucial in the restaurant industry because if the customer can’t see you or access you easily it’s possible that they won’t go out of there way to eat there. Franchise options also make is easier to enter the market, for example Subway has built their strategic plan around franchise options. Therefore, initially the only cost to enter the market is the starting capital required to open a restaurant. (1) On the one hand, the entry barriers are low. Most fast food restaurants are small size without any advantage. There is no brand advantage for the lack of famous brand, and the capital requirement is low. The resource is more, and the existing fast food restaurant cannot form barriers for the resources. Besides, the cost is low, and the existing fast food restaurant doesn’t have rich production experience and management technology. On the other hand, the original...
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...Fast Food Chains Abstract The purpose of the study is to analyze the application of concepts and theories of managerial economics in relation to the actual data and information from the fast food industry and related companies. Two fast food chains have been studied and analyzed throughout the project. MacDonald’s and Burger King have been chosen as part of Fast Food industry because both companies are the biggest and closest competitors of each other; they both provide an insight of the frame of the industry, advantages and disadvantages of franchise system and production techniques, demand and supply chains, keys of success and weaknesses that could bust or hinder growth in short- and long-term. The study concentrates on demand and supply structure in the industry, market forms in which the industry can operate optimally, scope of production, production techniques, cost structures, prevailing market conditions and their impact on the firm, and financial analysis of the companies. To collect the relevant data, the companies’ annual reports were critically analyzed and evaluated for exact position to be sorted, the current market conditions to be measured and their possible future effects on the firms working environment to be evaluated. Companies’ Overview McDonald’s is located in 117 countries and on 6 continents and operates over 32,000 restaurants worldwide. McDonald’s is the clear market leader in the fast food industry. For 2010 the company...
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...http://www.thefiscaltimes.com/Articles/2013/08/06/Are-the-Fast-Food-Workers-Right-About-Minimum-Wage Summary of the article: The article is focused in a current controversial issue that involves the fast-food industry and how right are their workers about increasing their minimum wage to $15. The article mentions how a basic living standard is what fast- food workers make to support themselves. The labor Bureau reported that 28 percent of core front-line fast-food workers regularly work 40 or more hours per week, compared to 75 percent of the country’s workforce as a whole. More than two-thirds of workers across the country are over the age of 20, and 68 percent are the main wage earners in their families, and more than a quarter of Americans working in fast-food restaurants are parents, raising at least one child. People who work in fast-food jobs are paid so little that having to rely on public assistance is the rule, rather than the exception, even for those working 40 hours or more a week. Fast food is a $200 billion-a-year industry. The wage for core front-line workers at fast-food restaurants nationally is $8.69 an hour. Only 13 percent of the jobs provide health benefits. The fast-food industry’s low wages and meager benefits, often accompanied by part-time. The article also explains that on the other hand the food industry could react differently to this demand reducing the headcounts. Eventually, putting pressure on those employers will emerge that have trained...
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...Bargaining Power of Suppliers | | 1. Supplier concentration | According to Tim Roache of the DPI Agribusiness Group, over 50% of the country’s land mass is classified as agricultural land. Agricultural production is undertaken by small landholders who either lease or own their lands or companies with vast agricultural estates. Due to rapid population growth and escalating commodity prices, increasing food self-sufficiency is a major concern. Similarly, food produced from large agricultural estates results in the Philippines being a major producer of sugar, rice, corn, tropical fruits, poultry, and pork. Manufacturing and agriculture comprise more than half (65%) of the country’s economy, and the agrifood sector employs over one-third of the population. Calata corporation (one of the biggest agricultural conglomerates, 2.7 billion) | 2. Availability of substitute inputs | The Philippines’ food processing sector is the most dominant manufacturing sector in the country. It accounts for 40% of total manufacturing output, contributes 20% of GDP per annum and is growing at 8-10% per annum. The sector comprises of fruits and vegetables, meat and poultry, flour, dairy products, fish and marine products, and the like. This sector is heavily reliant on both domestically produced and imported agrifood products. Recent economic liberalizations by the government has resulted in a trading system that’s relatively open and has some of the lowest applied tariffs in the region. (membership...
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...Industry Rivalry The five forces that Michael Porter uses to evaluate an industry are industry rivalry, buyers, suppliers, threat of substitutes, and potential entrants. The first force, industry rivalry, is used to describe the overall conditions in an industry, including the number of competitors. For Subway, breaking through to the breakfast market will not be easy due to industry rivalry. However, Subway has done some research and has found that many fast food restaurants are lacking in the healthy food options in the morning. This has led them to create products that will target the customers that are looking for healthy morning meals. “Subway’s offer includes four Fresh Fit Egg White Muffin Melts, each with less than 180 calories, 4.5 grams of fat and 5 grams of fiber” (Francella). This is an example of a product that Subway has created to try and gain ground in the fast food breakfast industry, a $40.7 billion business in the United States. While Subway may be gaining ground with their healthier morning meals, they are still trailing to one of their biggest competitors, McDonalds. One of the biggest reasons why McDonalds has been able to dominate the industry is the use of their drive-through. “Subway doesn’t have drive-throughs, which has become a big part of America’s breakfast tradition” (Channick). A drive-through is convenient and offers expediency. In today’s society where American’s are labeled as lazy, having a drive through is a big help in boosting...
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...Research Project Critical Success Factors One industry that has seen steady growth over the past ten years is the fast food industry or quick service restaurants. It is no secret that Americans have a tremendous love for greasy, unhealthy, quickly prepared meals. Not only Americans, but people around the world seem to be enjoying the tastes the fast food industry has brought to the table with McDonalds emerging as one of the biggest brands in the entire world. The growth and increase in this industry does still have its drawbacks. With newly enlightened consumers becoming more meticulous about what they eat based on calories, fat, gluten and so on, many fast food franchises have been under the gun to maintain the status they have bolstered for so long. Rather than lie down and wave the white flag, many companies have begun offering new products derived from new methods of preparation. Nowadays, everyone is on the move, everyone’s time is precious and there is high demand for a quick bite to eat. However, these consumers do not necessarily want to compromise their health in the process. Chick-fil-A has emerged as the top chicken fast food chain in the United States. They control the most market share and have done so in quite extraordinary fashion. Prior to being the number one chain, they trailed Kentucky Fried Chicken, who controlled 40% of the market back in 1999 while Chick-fil-A only had nine percent (Lutz, 2014). Chick-fil-A’s average sale is three times the amount of...
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...ANALYSIS 5 Fast Food industry analysis 5 PESTLE analysis 5 Political and Legal 5 Economical 6 Social 6 Technological 7 Environmental 8 Porter’s Five Forces Framework 8 Threats of new entrants 8 Bargaining Power of Buyers 9 Bargaining power of suppliers 9 Threat of Substitutes 9 Intensity of Rivalry among competitors 10 Key Success Factors in fast food industry 10 Branding 10 Location 11 Speed 11 Efficiency 11 INTERNAL ENVIRONMETS ANALYSIS – THE FIRM 11 Subway - Strengths and Weaknesses Analysis 11 Subway Strengths 12 Subway Weaknesses 12 Subway Analysis 12 Subway - Key resources, capabilities and competencies 13 Subway – Resources tangibles 13 Subway - Intangibles 13 Subway Human Resources 14 Subway – Porter value chain 14 Firm infrastructure 14 Human Resource 14 Technology 14 Inbound logistics 15 Outbound logistics 15 Marketing and Sales 15 Service 15 OVERALL ANALYSIS OF SUBWAY 16 CONCLUSION 18 REFERENCING 19 EXECUTIVE SUMMARY The following report shows an analysis of the real competitive environment into the Australian fast food industry. To understand the microenvironment this is conducted by PESTLE analysis. With this analysis can be found some positive factors for the fast food industry players. Also, is going to be used Porter’s five forces with the objective to research the level of rivalry in the industry of fast food and also barriers that may exist to entry and/or exit into the fast...
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...China may boast a 5,000-year-old culinary tradition, but when it comes to fast food, Western-style outlets rule. For this you can thank -- or blame -- changing consumer tastes, and the breathless expansion plans of chain restaurants, which are eager to grab a bigger slice of the country's estimated annual $29 billion fast-food market. For two decades the battle for the modern Chinese stomach was fought between two American giants: McDonald's, the world's largest fast-food chain, and Yum Brands Inc., which operates the KFC and Pizza Hut brands in China. Yum, which arrived in China in 1987 (three years before McDonald's), has always stayed ahead of its rival -- going by both the number of restaurants and consumers' awareness of the brand. In 2005 the two titans were joined by another American stalwart, Burger King, the world's second-largest burger chain. In April Burger King had only 12 outlets on the mainland, including nine in Shanghai. But after this cautious start, the company is pushing ahead with a faster store rollout: In June it announced plans to open between 250 and 300 outlets in China over the next five years, including another 10 restaurants in Shanghai. As in other markets, 90 percent of them will be franchised and one-tenth owned by Burger King. For comparison, KFC has more than 2,200 outlets in some 450 cities and McDonald's has 950 outlets. Airport eateries will also be vital. Some 200 of Burger King's 11,500 outlets worldwide are...
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...Fast Food and Consumer Behavior ABSTRACT Marketing can impact the economy in one or two ways. First, marketing has the potential to increase the demand for a good or service. Effective marketing campaigns entice people to want/buy a specific good or service. The market demand curve is comprised of individual demand curves for a good. General theory states that consumers will buy less of a product as the price increases. However, marketing can cause the demand for the good or service to become more inelastic, which causes consumers to still buy even when the price increases. This is because strategic marketing plans have a goal to convince consumers that there is no real substitute for the good or service. Some argue that consumer behavior is manipulated by marketing and that consumers need to operate within a “laissez faire” market. This paper will discuss the impacts of marketing on consumer behavior in the fast food economy and the ability to generate demand curves. It will test the following three hypotheses: (1) consumer behavior is influenced by marketing (2) effective marketing impacts the indifference curve (3) marketing can override the individual and market demand theory. The research paper will present the research that supports the psychological and economic theory of consumer behavior in the fast food industry to support the results demonstrating the economic effect from the efforts of marketing. Introduction ...
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...am highly agitated. I know if I do not contain myself, I will lose my job. The fast food industry has more behind the joyful smiles we depict. Out of all the possible ideas that would tick me off, fast food customers are my number one. I began working in the fast food service July of 2014 and at the time I just wanted a job to occupy me, not knowing I would still be there today. Never did I realize how cruel customers could be. When I started working at McDonald’s, I was always told by other employees that I would get to see the greediness of customers. I just laughed it off and went on with my business. After about two weeks of working I was able to see what other employees were talking about. I was still getting used to the cash register and this man walked in. While he ordered his food I would repeat what he said, but I was accidentally ringing up the wrong items. He began to get agitated with me. After he ordered, all I could think about was, “Could he not give me a break?”. It was then I began seeing the...
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...EX3 Industry Analysis Industry Analysis: Fast food industry Introduction Fast food industry report provide an analysis of the U.S. market environment of the fast food industry, evaluates the marketing activities and list several key player such as Panda express, McDonald's and Burger king as examples. The 5 force concepts framework is used for analyses the industry rivalry, threat of substitutes, buyer power, supplier’s power and entry barriers. (Porter's Five Forces) Five Force concepts rank Rivalry among firms: High Threat of Substitutes: High Buyer Power: Low Power of Supplier: Low Entry barriers: High Industry rivalry: Competition among fast food companies is really high, because there are a lot of competitors and fast food companies all try to again competitive advantage over the other companies in this industry. There are close to 50,000 fast food chains across the United States, with McDonalds being the largest restaurant chain. In the world, there are more than 500,000 fast food places. People can easily image the competitive because there are so many firms are sharing the fast food market. The increased presence of different fast food companies means a more competitive market. Fast food firm can gain a competitive advantage by some common ways such as product differentiation, channels of distribution and exploiting the relationship with supplier and customers. Industry rivalry...
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...Running head: SUPPLY MANAGEMENT IN THE FAST FOOD INDUSTRY 1 Supply Management in the Fast Food Industry: Taco Bell versus Del Taco Abstract With the advent of restaurants that offer its consumers quality food at a value price, it seems that quick service restaurants (QSR) are taking America by storm. Fast food chains that encourage their customers to “Have it your way” or “Eat Mor Chikin” continuously push competing chains to become more efficient, faster and cheaper all while maintaining the quality of the product. Del Taco and Taco Bell are members of the fast food industry and competing chains that have set out to provide mainstream American with Mexican-style food. Taco Bell, however, has outperformed and outsold Del Taco since their creation in 1962 and 1964, respectively. It follows to wonder exactly which procedures contribute most to Taco Bell’s success. A comparison between the two restaurants reveals that Taco Bell’s international expansion has allowed for many more options regarding its supplier relationships and distribution practices. “Live Mas,” the well-known slogan coined by the international fast food chain, Taco Bell, is one that encourages its consumers to live boldly and uninhibited by one’s diet. Replacing its previous slogans of “Think Outside the Bun” and “Yo Quiero Taco Bell,” the new slogan is a part of Taco Bell’s efforts at defending a reputation called into question by a since-withdrawn 2011 lawsuit that falsely accused the restaurant...
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...Value China Considering the environment of fast food industry, here are lists of activities, as shown in following tables, which were believed to be significant to fast food entity in creating its particular value. Our analysis is based on Michael Eugene Porter’s value chain. Primary activities Inbound logistic | Activities | Description | Management | | Ingredient acquisition | The main material for food & beverage industry is ingredient | Supplier selection: Based on the cost & quality to select supplier; build a good relationship with supplier | | Site preparation and decoration | Design a fantastic location and decoration can attract consumer;Entity shall design how far between branches | Apply production strategy, such as use just in time to reduce carrying cost | | Cooking tools and dining utensils purchasing | Using handy equipment for fast cooking; Choosing one-time cutlery as well as packing | Adopt disposable cutlery to save more time in cleaning | Operation | Processing ingredient & cooking | this is the important element to translate ingredient to cuisine and dish | Control the time of queue, Avoiding consumer wait in long time | | Ordering | Taking the order from customers | | | Site cleaning | Prepare an available table for consumers | | | Environment creating | Build a convenience and comfortable dinning environment. It is need not to overbuilding or too sumptuous for fast food restaurant | Select relaxing music in order...
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