Essay about Porter’s Five Forces Analysis of the Fast Food...

Porter’s Five Forces Analysis of the Fast Food Industry Complete a Porters Five Forces Analysis of the fast food industry and for each of the 4 generic strategies, identify one restaurant that you believe is employing that generic strategy. According to Hoovers Fast Food and Quickservice Restaurant Report, Fast food restaurants make up one of the largest food industry segments with more than 200,000 restaurants in the US. Fast food franchises are known for their low cost and high-speed products served to go as well as for a quick on-site consumption. Consumers are attracted to the idea of standardized menus and familiar meals in each location. Michael Porter’s model discussed below will help us identify five key competitive forces†¦show more content†¦In addition, even when some Fast food restaurants purchase large quantities, they do not face significant switching costs other than inconvenience of developing new relationships with new vendors. In contrast, suppliers of soft drinks in the fast food industry are dominated by Coke and Pepsi because of their well established distribution channels. Coke and Pepsi also provide fast food restaurants with Coke and Pepsi equipment such as soda machines and refrigerators. By doing so, Coke and Pepsi have added value to their customers and differentiated themselves from other suppliers. Threat of substitutions - High The threat of substitutes is high because numerous similar products are available from outside the fast food industry that come very close to meeting the needs of current customers. The existence of substitutes such as frozen meals, home cooked meals, and food trucks create alternative foodservice options. These substitutes offer attractive price and similar product characteristics and therefore result in low switching costs. In addition, fast casual restaurants like Chipotle and Panera Bread are a growing threat for the fast food industry. These fast casual restaurants offer the convenience of fast food chains with the quality of casual dining and healthier food options. The power of buyers – Low The bargaining power of buyers is low because the buyers of the fast food industry’s products are individual customers. FastShow MoreRelatedPorter s Five Forces Theory Essay1426 Words   |  6 Pagesglobalization era, businesses around the world develop in a really fast pace. The competition within an industry usually tough and it has its own pattern that could be difficult to understand by the new comer. Therefore, chances for new businesses to grow will be low if they are not analyzing the environment of the industry. One of the most common theory to analyzing forces of competition in an industry is Porter’s Five Forces theory. These five forces are consist of the threat of new entrants, the power ofRead MoreAnalysis Of Cola War Case Based On Porter s Five Competitive Forces Essay1608 Words   |  7 PagesAnalyzing Cola War Case based on Porter’s Five Competitive Forces Due to globalization and this fast-growing business environment, firms struggle to earn above-average returns. They strive to establish a competitive advantage in order to earn higher returns. It is not enough for firms to establish a competitive advantage, they should also figure out ways to sustain it. There are several factors that can affect the competitiveness of a firm including customers, suppliers, existing rivals, new entrantsRead MoreMarketing Plan For The Fast Food Industry Essay1570 Words   |  7 Pagesperforming the market analysis, consumer behavior analysis and the environmental analysis mainly supports in maintaining the focus for strategic incorporation of the innovative marketing strategies and channels. 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