ipl-logo

Industry Analysis: The Fast Food Industry

948 Words4 Pages
bulb-icon

Recommended: Apple porter's five forces analysis

Industry analysis:The Fast Food Industry (McDonald’s)

NAICS 72221: Fast Food Restaurants. This industry is made up of establishments focused on the sale of prepared food and drinks for immediate consumption on or near the premises. Institutional and caterers and industrial organisations are also included in this business.

Related Industries:

Full-Service Restaurants

Grocery retailers

Grocery wholesalers

Packaged food manufacturing

Sub industries include:

Eating places Ice cream, soft drink and soda fountain stands, Coffee shop, Concessionaire Delicatessen (eating places) Frozen yogurt stand, Drive-in restaurant, Hamburger stand and Hot dog stand.

(Barnes, C. (2014))

McDonald’s is the global leader in the fast food industry. …show more content…

In order for McDonald’s strategies to operate effectively they must align with the external factors in the fast food restaurant industry.

Competitive Rivalry (Strong Force)

McDonald’s faces high levels of competition because the fast food industry is highly condensed. This element of Porter’s five forces analysis examines the effect of competing firms in the industry. There is a strong force of competitive rivalry for McDonald’s due to the following factors:

•High number of firms (strong force)

•High aggressiveness of firms (strong …show more content…

New Competitors coming into the industry can affect McDonald’s market share.In McDonald’s case, the following external factors create a moderate threat of new entry:

•Low switching costs (strong force)

•Moderate capital cost (moderate force)

•High cost of brand development (weak force)

low switching costs enables consumers to easily move from McDonald’s to new fast food restaurant companies. Also, the moderate capital costs of establishing a new restaurant makes it moderately easy for small or medium-sized firms to affect McDonald’s at a local level. However, it is expensive to build a strong brand that could compete with McDonald’s brand globally. This element of the Five Forces analysis illustrates that the threat of new entrants is a considerable issue for McDonald’s. (Kasi, A. (2017))

Bargaining Power of McDonald’s Customers/Buyers (Strong Force)

McDonald’s must address the significant power of customers. This element of Porter’s Five Forces analysis is concerned with the demands and influences of consumers. In McDonald’s case, the bargaining power of buyers is strong because of the following external factors:

•Low switching costs

•Large number of

Show More
Related

Omnivore's Dilemma By Michael Pollan

757 Words | 4 Pages

Research show that lots of fast food restaurants are industrial food chain and it is almost everywhere you go. “Fast food joints are notorious for supplying factory farmed meat at a low price, as well as other portions of the meal infused with excess sugar derived from industrially-farmed crops” (Study.com). All local fast food restaurants are selling cheap meat which causes everyone to buy because it’s so cheap and cheap is always better for business because you are saving money so it is so easy to get from anywhere. According to a study of the Economist, Mcdonald’s has “35,000 restaurants in 107 countries” (Economist.com). McDonald’s are all over the country and many people like Mcdonald's causing them to buy even more food from that fast food

Read More

Pantry Case Study Summary

3865 Words | 16 Pages

The Pantry’s use of forward integration contributes to this bargaining power. They receive much of their in-store goods from Budweiser, Frito Lay, and Coca-Cola, who in turn provides delivery services directly to stores. Bargaining Power of Buyers Low brand loyalty and minimal switching costs make the bargaining power of buyers high. Buyers make the decision to patronize other businesses when the opportunity to pay lower prices, presents itself.

Read More

Panera Bread Research Paper

629 Words | 3 Pages

• Rivals face high exit barriers Very High Potential Entrant Pressure • High entry barriers • Strong product differentiation • Menus change constantly with

Read More

Walt Disney Porter's Five Forces Analysis

1089 Words | 5 Pages

3 Porter’s Five-Forces Model Analysis Different factors can be combined together in a simple business model. This is known as Porter’s Five-Forces Model and competitive circumstances of an industry can be analyze through this model. These five forces are critical forces that they determine the attractiveness and competitiveness of an enterprise and have influence on a firm’s profitability in its industry. The five-forces analysis can not only show how Walt Disney company builds a sustainable competitive advantage in Entertainment-Diversified industry but also can seize business opportunities in future development.

Read More

Porter's Five Forces Analysis Of Cadbury

2096 Words | 9 Pages

By the given operational timings, the sales that Cadbury will make will vary as consumers does not have a fixed schedule as when they are able to buy from Cadbury. Porters’ Five Forces This external analysis is a force that utilizes five different dynamics to determine the viability of an organization and how it manipulates the competitive strategy of the corporation. With the implementation of this analysis, Cadbury would be able to meticulously scrutinize what are the advantages and disadvantages that they are currently or might face and hence, able to prepare themselves to avoid landing themselves in the foreseen situation. Threat of new entrants/Potential Competitors

Read More

Porter's Five Forces Of Tesco

1680 Words | 7 Pages

In order to analyse what extent Tesco U.K’s performance is attributa-ble towards industry characteristics, Porter’s five forces are broken up into competition, potential of new entrants, power of suppliers, power of customers and the threat of sub-stitute products. Below is an image of Porters 5-forces in relation to the U.K supermarket industry. 1. Rivalry amongst competitors The intensive rivalry in the U.K’s grocery sector is remarkably high.

Read More

Capsim Porter's Five Forces

506 Words | 3 Pages

Porter’s Five Forces Porter’s Five Forces framework is to identify the level of competition within the industry and to determine the strengths or weaknesses which can utilise to strengthen the position. The framework consist of five elements: threat of entry, bargaining power of supplier, bargaining power of buyer, threat of substitutes and industry rivalry. Forces Analysis Implication Threat of new entrant Low Threat Diversified of product There are high demand of furniture and electrical appliance.

Read More

Holiday Inn: Porter's Five Forces Of Industry

1384 Words | 6 Pages

This model is considered as the most potent and useful tool and is widely used by organisations. This model deals with external factors that influence the nature of completion and internal factors how firms compete effectively to be more profitable. Porter’s 5 forces is used. Industry Rivalry : Porter (1980) reiterated that intensity of rivalry is dependent on number and size of direct competitors as numerous and/or equally balanced competitors may lead to intense competition. The rivalry for market share becomes intense when product differentiation and switching costs are

Read More

Informative Speech: An Attention Getter For Fast Food

733 Words | 3 Pages

1. Supporting point 1: Nowadays we can see these fast food restaurants in almost every shopping mall and there is at least one of these franchised restaurants in each area of the city and still increasing in number because of the high demand. a. Sub-supporting point 1: Although there are lots of choices of food inside a mall, but people often choose fast food as it is affordable and yet it is tasty and filling at the same time. b. Sub-supporting point 2: For example, in the Kuala Lumpur International Airport, there are a lot options of food to choose but the two franchised McDonalds are still always

Read More

Porter's Five Forces Of Twitter

903 Words | 4 Pages

This theory is based on the concept that there are five forces that determine the competitive intensity and attractiveness of a market. Porter 's five forces help to identify where power lies in a business situation. This is useful both in understanding the strength of an organization 's current competitive position, and the strength of a position that an organization may look to move into. Strategic analysts often use Porter’s five forces to understand whether new products or services are potentially profitable. By understanding where power lies, the theory can also be used to identify areas of strength, to improve weaknesses and to avoid mistakes.

Read More

Mcdonald's Risk And Risk Analysis Of Mcdonalds

817 Words | 4 Pages

This is a huge market since the U.S. and the world revolved around convenience. Although McDonald’s is very popular right now you never know if one day it will become a shadow to another company. Next, since there are so many competitors each company is trying to be unique and bring new things to the market. Whether it is McDonald’s McPick 2 or Wendy’s 4 for 4 competitors are trying to out shine each other, making it hard to compete and keep prices down sometimes. With a quick google search I found that there are over 50,000 different fast food chains in the United States alone.

Read More

Porter's Five Forces Model Of Biscuits

1832 Words | 8 Pages

Porter’s five forces model To analyse the microenvironment facing United Biscuits in China, Porter’s five forces model is selected to provide an understanding of the competitive forces, to determine the competitive position of the company and profitability within the biscuit industry whilst offering a framework for predicting and influencing competition over time (Porter, 2008, p.80). The findings are explained below: Threat of new entrants • The high capital cost required for investing in developing distribution, sales network and acquiring production equipment could deter new entrants. The barriers are high when capital is necessary for unrecoverable expenditures such as marketing and product development capability which is difficult for new entrants to succeed in the short-term (Euromonitor, 2014; Porter, 2008, p.81).

Read More

Porter's Five Forces In The Supermarket Industry

1484 Words | 6 Pages

Each of the forces is determined how competitive in that industry as well as the structure of the industry. Porter’s five forces factors are consists of competitive rivalry, the threat of new entrants, the threat of substitutes, bargaining power from

Read More

Swot Analysis Of Checkers

1645 Words | 7 Pages

Checkers – Redesigned fast food flavours Fast food or food on the go is one of the fastest growing industries. A conventional fast food restaurant will have a walk up counter and/or drive-thru window to place order and pick up food without long wait. They are popular because they serve filling foods that taste good and cost less. For years such diners dominated the casual restaurants or eat ins. The launch of Checkers was a step above these restaurants.

Read More

Burger King Supply Chain Analysis

1626 Words | 7 Pages

Burger King (BK) is an American global chain of hamburger fast food restaurants. Headquartered in the unincorporated area of Miami-Dade County, Florida, the company was founded in 1953. Burger King 's menu has expanded from a basic offering of burgers, French fries, sodas, and milkshakes to a larger and more diverse set of products. In 1957, the "Whopper" became the first major addition to the menu, and it has become Burger King 's signature product since.

Read More

More about Industry Analysis: The Fast Food Industry

Related Topics

Open Document