Strategic Analysis of the Uk Fast Food Industry

Only available on StudyMode
  • Download(s) : 540
  • Published : April 21, 2013
Open Document
Text Preview
Business and Management Strategy
BAM6012

A Strategic and Competitive Analysis of the UK’s Fast Food Industry

Executive Summary
The food industry in the UK is a multi-billion pound industry that is mainly dominated by a few competitors such as McDonalds, Burger King, KFC and Subway. Most of the food sold in these fast food restaurants is unhealthy, which is becoming a huge concern as there are many people dying of obesity and other health related problems. This is one of the key social factors facing the fast food market at the moment. The fast food industry is a ‘red ocean’ as it is already well defined where rivalry is intense. It is also a perfectly competitive industry as the barriers to entry are low and there are many rivals each with similar products. Information about any of the competitors is freely available. The industry does have a few characteristics of an oligopolistic industry too as there is a couple of companies that have the main market share and have power over the buyers and suppliers. The main features that influence a firm’s ability to compete and gain profitability depend on who their main competition is. For example there are different strategic groups in the industry such as McDonalds and Burger King who compete at the top of the industry and single privately owned fast food retailer that compete on a much lower level with much smaller budgets. The customer requirements are very low in this industry as a lot of the products sold by different firms are very similar; however the requirement of a cheap and fast meal is always at the top of their needs. Any potential strategy to increase profitability within the industry will need to be assessed properly and to realise the risks involved and other potential threats to it.

Table of contents Pg. Executive Summary………………………………………………………………………… 2 Introduction…………………………………………………………………………………… 4 History of the fast food market………………………………………………………. 4 Current market conditions……………………………………………………………… 4 PESTEL analysis………………………………………………………………………………. 5 Porter’s Five Forces……………………………………………………………………….. 7 Industry attractiveness…………………………………………………………………. 9 Opportunities………………………………………………………………………………… 9 Threats…………………………………………………………………………………………… 9 Possible strategies…………………………………………………………………………. 10 Bibliography………………………………………………………………………………….. 11

Introduction
This report aims to give a strategic and competitive analysis of the UK’s fast food industry. It will cover the main structural features of the industry that influence competition and profitability. The report will give an overview of the whole industry rather than just one company within it. I shall also aim to analyse the industry attractiveness showing why possible companies would like to enter the marketplace. Another aim of the report is to analyse the competition and customer requirements in order to identify opportunities to gain a competitive advantage within the industry. The final aim of the report is to develop possible strategies to influence and improve on profitability. Whilst developing a strategy, the difficulties and risks involved in using these strategies will be covered.

History of the fast food industry in the UK
The UK has embraced a lot of different types of fast food over the years, ranging from pizza to burgers, kebabs to Chinese, curry to fish & chips and healthy offerings. There is a lot of competition in the market at present with high profile companies such as McDonalds, Subway, Burger King, and KFC, not to mention the amount of privately owned single store fast food outlets.

Current market conditions
The value of the fast food market in the UK grew by 3.3% in 2011 to reach a total value of $7,860.3 million. The forecast for the market value is set to increase to $9,147 million by 2016. This is an increase of 16.4% by 2011. Transactions in the fast food market...
tracking img