Documente Academic
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Industry
Analysis
Group 3
Chase Mueller
Ashley Hoptay
Olivia Erwin
Tanner Gilreath
Paige Stone
Brandon Laviage
Anna Rendon
SIC Codes
NAICS Codes
Wendys/Arbys Group
6,645 of them are Wendys, and 5,231 of all Wendys fast food
restaurants are franchised.
Hedgehog Concept
Hedgehog Concept
Industry is made up
of international,
national, regional and
local chains
Chains can be
corporate owned or
franchised
Franchising:
Convenience
Technology
Role of Government
The government does not control profits or contracts of the industry, but
local, state, and federal governments have adopted laws and regulations
that involve various aspects of the restaurant business, such as:
Competitive Environment
The spending slowdown and high food and energy prices have
caused a slowdown in growth in the fast food industry
In 2008, 55% of restaurant operators reported a same-store
sales decline
Food and beverage inputs account for 33 cents for every dollar
of sales. With already low operating margins, a slight increase
in these costs can have an outsized effect on profitability.
The bloody red oceans caused by price wars makes it difficult to
pass the rising costs to customers
Social Factors
Health Food
Social Factors
Diversity
Workers
Pride 360
Going Green
Packaging
Buildings
Technological Trends
Wi-Fi
Equipment
15,000 McDonalds
Burger King, Wendys, Subway, Taco Bell
Drive Thrus
Outsourcing orders
Time Clocks
Economic Factors
Minimum Wage
Cheeseburger Bill
State Issues
International Issues
Law Suits
Geographical Factors
Globalization
Convenient locations
McDonalds - 60%
Yum! Brands - 50%
Way home from work
Corner of block
McDonalds - Wal-Mart
Little Caesars - K-Mart
Competitive Factors
Social
Technological
Economic
Political/Legal
Geographical
5 Forces Model
Main Competitors
5 Forces Model
Concentration of Competitors
5 Forces Model
Differentiation
Switching Costs
5 Forces Model
Economies of Scale
Efficiency
R&D, New Technology
Economies of Scope
5 Forces Model
Economies of Scale
5 Force Model
Legal Barriers
5 Forces Model
5 Forces Model
Price Sensitivity
5 Forces Model
Price Sensitivity
Competitive Moves
McDonalds
is the industry leader and has been known as the industry trend
setter, yet it has not always been at the forefront on capitalizing
new niche markets
They were the first to create and master the speedee service
system also known as the assembly line
They were also made the first strategic move of purchasing their
own land to rent to franchisees
They were also the first to advertise with an character , which
strengthened their brand equity
Competitive Moves
YUM! Brands
Taco Bell
The first fast food chain to offer free drink refills for
its customers
Also created a 3 tier pricing strategy, offering
products at 79, 89, 99
Also the first its menu completely trans-fat free
Competitive Moves
KFC
Burger King
Competitive Moves
Wendys
Competitive Success
One of the biggest key success factors for the fast food
industry is their ability to offer consistent products and
services at every location
Franchises and chain stores must reliably offer the
same product or service at numerous locations to build
customer loyalty
YUM! Brands, Wendys, and Burger King all take the
same approach which has made them leading
competitors with McDonalds
Icons
Another driving force of the fast food industry has been its ability to
capture both young and old audiences
Each leading competitor has easily recognizable icons that appeal
to its target audience, which in turn differentiates them from its
competitor
These icons are easily recognizable and add to the experience
when eating and also create a positive attitude
Convenience
People
Products
Place
Price
Promotion
Conclusion
Conclusion
Some may argue that the industry is coming to a halt due to the
market saturation in the United States, but there is a lot of room for
growth nationally and internationally.
The industry also does not need to worry about new threats
entering the market at this time because of the state of the
economy.
McDonalds understands the importance of brand awareness and
recognition, so it consistently spends the most on advertising,
which has solidified its position as one of the most well known
brands in the world.
Conclusion