Porter's Five Forces Essay

1073 Words3 Pages
bulb-icon

Recommended: Fast food chains and competition

Porter’s Five Forces Model Competitive rivalry or competition- High Force The fast food industry in New Zealand is contemplated on its intense competition involving international franchises for example, McDonald’s and local firms such as BurgerFuel which continue to expand with additional outlets across New Zealand. Wherein the competition between the surviving competitors has a strong force in the industry due to the high number of outlets, low switching and high aggressiveness between firms. The fast food rivalry amid prominent chains, for instance, McDonalds, Burger King, and countless others have strengthened as they “fight to offer the cheapest meal deal ever” (Marino, 2016). In fact, the main competition in this industry is cost-based …show more content…

Wherein, starting up in this competitive industry in New Zealand is not straightforward since several aspects need to be reflected on before commencing a fast food franchise. In fact, it demands a significant amount of investment for example, purchasing property, plant and equipment, following the laws and regulations and numerous other factors. Last year McDonald maintained their strong position as New Zealand’s leading franchise due to their controlling position in the burger category, “where it accounted for 49% of value sales during the year” (Euromonitor, 2016). So, when new companies contest with leading outlets like McDonalds, their trademark brand is unfamiliar to many consumers compared to immensely popular outlets. In which, brand development, such as advertising campaigns can be extremely expensive and has a low force in this industry. Since, reputable chains have the capital to retaliate forcefully through pricing, promotions, as it will discourage the new entrants from entering the marketplace. Wherein new businesses cannot compete with well established firms. Given that, the new entrants lack economies of scales, which present outlets have formed over the period, and only exploit it to remain competitive in this high turnover, low margin industry. Hence, entering into the fast food industry is quite difficult which ensures that the threat of new entrants has low force but a positive force. Since, there are no legal barriers put in place by the New Zealand Government. Thus the overall force is positive for the existing fast food industry since the likelihood of additional competitors is

Show More
Related

  • Analysis Of Mark Bittman's Article: Is Junk Food Really Cheaper?

    1064 Words  | 3 Pages

    There has been withstanding controversy about whether fast food is easier on the pocket than eating home-cooked meals. Take McDonald’s for instance, they’re notorious for their convenient and affordable dollar and value menus. Since you can get a burger for just $1.19, feeding a family of four should be inexpensive right? Mark Bittman, author of “Is Junk Food Really Cheaper?” argues otherwise. He claims that fast food is not at all cheaper than buying a few groceries and cooking at home. He expresses the different myths about fast food like how it is supposedly cheaper than real food when measured by the calorie, the mentality of people that if it isn’t fast food, it has to be costly organic food, and that there just isn’t enough time to cook at home. These myths followed by genuine factors such as addictions and a cultural impact, help Bittman prove his argument’s validity across to his audience. I have to say that Bittman proved his argument’s effectiveness, for he clearly stated his thesis and provided various reliable

    Read More

  • Situational Analysis - Chick-fil-a

    1670 Words  | 4 Pages

    The fast food restaurant industry, which includes quick-service and fast-casual restaurants, is highly segmented with the top 50 companies accounting for only 25% of the industry’s sales. The $120 billion industry includes over 200,000 restaurants with 50% of those specializing in hamburger entrees. (hoovers.com 2008) The major competitors in the industry include McDonald’s, Burger King, Taco Bell, Subway, and KFC – Chick-fil-A’s major competitor in chicken sales. Chick-fil-A’s unique position in the market, specializing in chicken-based entrées, has lead to a competitive advantage which the company has been able to capitalize on. Recently, many competitors have added chicken entrees in order to compete in the market segment. Through marketing strategies and company initiatives, Chick-fil-A has tried to stay distant from competitors, offering a fresh alternative to the ordinary fast food restaurant.

    Read More

  • Pret A Manger Case Analysis

    717 Words  | 2 Pages

    Founded in 1986, Pret A Manger is a fast food chain, which produces freshly prepared, natural food with over 250 stores throughout the United Kingdom, France, Hong-Kong and the United States. Unlike most fast-food chains, Pret is a private company; they do not face the same pressure to grow as a public company does. However there are many factors that affect Pret A Manger’s marketplace such as economy, competition, technology, political environment, and the standard of living. This report evaluates major internal and external factors affecting Pret A Manger using various analytical techniques.

    Read More

  • hgk

    734 Words  | 2 Pages

    Section 1: Typically, we need a well-balanced meal to give us the energy to do day-to-day tasks and sometimes we aren’t able to get home cooked meals that are healthy and nutritious on a daily basis, due to the reasons of perhaps low income or your mom not being able to have the time to cook. People rely on fast food, because it’s quicker and always very convenient for full-time workers or anyone in general who just want a quick meal. Eric Schlosser, author of Fast Food Nation argues that Americans should change their nutritional behaviors. In his book, Schlosser inspects the social and economic penalties of the processes of one specific section of the American food system: the fast food industry. Schlosser details the stages of the fast food production process, like the farms, the slaughterhouse and processing plant, and the fast food franchise itself. Schlosser uses his skill as a journalist to bring together appropriate historical developments and trends, illustrative statistics, and telling stories about the lives of industry participants. Schlosser is troubled by our nation’s fast-food habit and the reasons Schlosser sees fast food as a national plague have more to do with the pure presence of the stuff — the way it has penetrated almost every feature of our culture, altering “not only the American food, but also our landscape, economy, staff, and popular culture. This book is about fast food, the values it represents, and the world it has made," writes Eric Schlosser in the introduction of his book. His argument against fast food is based on the evidence that "the real price never appears on the menu." The "real price," according to Schlosser, varieties from destroying small business, scattering pathogenic germs, abusing wor...

    Read More

  • America's Food Problem

    1137 Words  | 3 Pages

    Fast food restaurants such as Burger King and McDonald’s, create advertisements where it urges people to consume their product. For example Mcdonald’s created a product where you can get two items such as a mcdouble and a medium fries for three dollars. According to “The battle against fast food begins at home”, by Daniel Weintraub, it shows how companies are intriguing their customers. “ The center blames the problem on the increasing consumption of fast food and soft drinks, larger portion sizes in restaurants and the amount of available on school campuses”(1).For the most part, the Center for Public Health believes that fast food companies are the problem for health

    Read More

  • Critical Reflection of the Porter Five Forces Concept

    1474 Words  | 3 Pages

    In a world of free trade, growing competition and accessibility to foreign markets, the need for methodical market analysis and assumptions is steadily rising in today’s business environment. It is just a normal way of thinking to primarily intent to eliminate the financial before entering a new and foreign market. This suggests that enterprises have to develop an overall strategy for their business in order to gain competitive advantage and consequently market share. With the words of Michael E. Porter, professor at Harvard University and leading authority on competitive strategy, this desirable market success is indirectly linked to the individual structure of a market. The unique structure of a single market influences the strategic behaviour and the development of a competitive strategy within a firm. The competitive strategy finally decides whether a company performs successfully on the market or not. Referring to this interpretation of business success, M. E. Porter established his five forces framework that enables directives to gather useful information about the business environment and the competitive forces in industries.

    Read More

  • Burger King: Selling Whoppers in Japan

    1384 Words  | 3 Pages

    This particular case is about the implementation of the popular fast-food chain, Burger King, into the Japanese market. Despite its’ strong market position in other countries, Burger King has some difficulties to face within the Japanese market. In this report, my team and I will analyze Burger King’s current situation and problems and suggest alternatives.

    Read More

  • McDonald's: Analyzing the Empire

    1945 Words  | 4 Pages

    In terms of the Fast Food Industry the competition is always expanding and changing as there are several types of cuisine that a company can capitalize on and offer in a fast food format. McDonald’s has competition from many angles vying for their market share, but for the sake of this project it’s relevant competition would be those competitors in the same segment of the fast food market, namely Burger King, Wendy’s and Jack in the Box.

    Read More

  • Positioning Essay

    995 Words  | 2 Pages

    Whether it is marketing within franchised restaurants or major retail banks, marketing plays a large role in providing assistance for companies to reach goals such as high profit. Subway sandwiches, a world-wide franchised restaurant, uses marketing and marketing tools not only for increased sales but to create an image in the consumers mind. This essay will define and discuss positioning, as well as a case study on how the Subway franchise has positioned their product. As one cannot climb a mountain from the top, market segmentation and market targeting will be looked at in order for better understanding on positioning.

    Read More

  • Competition Among Fast Food Chains

    1646 Words  | 4 Pages

    CHANGING PREFRECE depended vastly on the fast food manus. For example we can mention about SALAD. Now salad was never considered as a part of fast food menu. But with the change of taste and preference, fast food chains like Windy, Taco Bell, and McDonald have introduced SALAD into their menus. This preference is not stopping only with salads. In 2002, McDonald’s introduced great tasting new products including premium salads, n salads plus menu; Chicken McNuggets made with white meat; Fish McDippers; Chicken Selects; and new breakfast offerings like the McGriddle sandwiches. Here as a fast food chain, McDonald did not have to introduce new dishes in their menus but with the impression and image in the market analysis, of increasing demand and chan...

    Read More

  • Is Fast Food to Blame for Obesity?

    954 Words  | 2 Pages

    Another point of reason I would like to argue about is fast-food restaurants are everywhere and it is difficult for one to find any alternatives. I would also like to ask of the consumers to look at it from another view. There are many choices available to consumers each day some can do harm, while othe...

    Read More

  • Starting a Small Business

    2009 Words  | 5 Pages

    The first step in any business is to think of or create a business idea. Without an idea, one cannot launch their business off the ground. A right direction is needed to create a business with a unique idea. However, other options include franchising or buying an existing business (1). Franchising allows an individual to run stores such as Burger King or McDonalds under the corporate name. It involves taking training classes and a heap of money in order to start a franchise. A Franchisee will have to buy products and services from the corporate entity they are franchising from, which is often required. Buying a franchise is like taking a piece of the pie from the company that is franchising and sharing that pie with everybody else. In addition having a franchise allows one to communicate and in essence become a big part of an added business opportunity (4). Franchising is far from easy to start and maintain for that matter. Starting a franchise involves a l...

    Read More

  • 6 TOWS Analysis: Burger King And Mcdonalds

    1724 Words  | 4 Pages

    Fierce and growing competition – big fast food companies like Burger King and Kentucky Fried Chicken are constantly competing with McDonalds for customers and trying to take the spot as the top fast food chain.

    Read More

  • Burger King Marketing Analysis

    1062 Words  | 3 Pages

    By choosing to expand into markets later than other fast food restaurants Burger King hopes to avoid the problems of developing infrastructure and establishing a market base. For instance, by following McDonalds into Brazil, Burger King avoided the need to develop the infrastructure and mark...

    Read More

  • Fast Food And Healthy Food

    1169 Words  | 3 Pages

    “McDonald's is the world's largest fast food restaurant chain, serving an estimated 68 million customers daily in 119 countries.” - Reuters in Los Angeles (2013). McDonalds is very powerful in the food industry. They cater to varies people from all over the world and they need to be able to cater for everyone needs. So what is it about McDonalds that enables them to have 47 million customers daily? They are able to retool their images and expand in the hospitality industry and still become increasingly popular each year. As McDonalds is a without a doubt known as the king of the fast food industry with franchises from Moscow to Rio de Janerio, t...

    Read More

More about Porter's Five Forces Essay

Open Document