Threat of new entrants:
* The threat of new entrants in the fast food industry is very high because there is no barrier in entering into the industry. * The only barriers in which the company faces in the industry are economies of scale and access of the distribution. * In order to capture the market they have spend tremendous amount of money on advertising and marketing. * These industries are very competitive in nature because companies are always try to capture the customers from each other. * Access of distribution is very important if the customer doesn’t find at any desired location then the customer don’t prefer that location to eat. * Franchise options also make easier to enter the market. * Startup cost is very high due to all the equipments, licensing and the property.
Threat of the competitors
There is a huge competiton in the fast food industry where there is potential growth in the market. The industry also growing due to tremendous opportunity in global markets. For example, mc donalds has competitive advantage over other companies as they already entered many countries and they are succeeding in these countries. The threat of subtitues:
There are so many subtitues available in this industry. Since there are wide variety of products to choose, some of them are kfc, taco bell, burger man etc
Power of suppliers
The power of suppliers within the fast food industry is relatively small, unless the main ingredient of the product is not readily available. Power of buyers
Relative strength of buyers are low in this fast food industry since switching cost is very low compared to all other industry.