The Identification of the Effects of Globalisation on the Fast-Food Industry

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Oxford Brookes University

Research and Analysis Report

The identification of the effects of globalisation on the Fast-food Industry

By: Meekaal Ali

September 2001

Words 4850

Contents page no.

1. Introduction 3 2. Information Gathering 5
3. Identification and analysis of information 7 4. Conclusion 16

Appendix A- References and Bibliography 18 Appendix B- Fast-food Industry operating results 20 Appendix C- System wide Restaurants of McDonalds and TRICON Global 21 Appendix D- IT budget division of the Food and Beverage Industry 22

1. Introduction

1 Topic chosen and its context

This report will identify the impact of globalisation on the fast food industry. I will be looking at the factors that influence the industry as a whole and make special reference to Pakistan while exploring the Asian/Pacific economies. The aspect of globalisation will be mainly financial and economic though all factors will be taken into account while explaining the fast food phenomenon. I will identify the variables that have caused the expansion of fast food into becoming a multi billion-dollar industry over the last two decades and describe the implication of present and future technological developments. The term Globalisation is normally used to describe the state of multi lateral economic relations in the world today. Globalisation can be defined as the ‘increasing internationalisation of the production, distribution and marketing of goods and services’ (Harris 1993). The increasing availability of capital through international markets has fuelled the process of foreign direct investment; this coupled with advances in computing and communications technology has resulted in multinational enterprises such as McDonalds and TRICON Global. These two companies will represent the industry trends in this report. I will analyse my findings within the context of Porter’s Five Force Model and the PEST analysis.

1. Reasons to chose topic

The world today is moving toward a society where national borders are becoming increasingly irrelevant as capital markets integrate. As an accountant, I wanted to research the reasons behind this phenomenon. In the future accounting standards and reporting frameworks will have to be devised keeping the geographical diversity of operations in mind. To be prepared for this inevitable and rapidly approaching economic environment I wanted to understand the underlying causes and gain an appreciation of the factors that fuel the pace, scale and scope of globalisation. No where can the effect of this ongoing trend be felt more clearly than within the fast food industry. Even in an emerging economy like Pakistan that has yet to catch up with the full scale global integration of capital markets, companies like McDonald’s, Pizza Hut and KFC have shown their presence, paving the way for others to follow. With the emergence of these multinational concerns in South Asian economies, national industries have had to rethink their strategies and improve their operating environment. Laws regarding safety, health and environmental standards that are either nonexistent or in infantile stages, have to now be formed and implemented if the domestic industry wants to compete with the Multi-National Corporations (MNCs). Another reason for having chosen this topic is that no research has so far been carried out regarding globalisation and its effects on the industry at any private or...
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