The Market for Fast Food in Canada
When examining market structure, one must look at several factors including the quantity of firms, type of products offered, barriers to entry, pricing power and non-price competition. In order to define the fast food market, all of these factors must be considered. Due to competition, price wars, and barriers to entry in the fast food market, market structure becomes slightly muddled and difficult to determine. That being said, the fast food market may not solely be defined by one market structure. It is the combination of two separate market structures, which form the backbone of the fast food industry. These two structures are monopolistic competition and oligopoly.
In the fast food market, the number of producers may be numerous; however, the number of firms may not always be the key point to consider when determining market structure. Instead, it is important to analyze whether there are a few firms that are relatively large and have substantial market share compared to the various others in the industry. In the case of fast food, one could say that there are thousands of fast food chains and restaurants scattered all over Canada and North America as a whole. Despite the large numbers, there are only a select few who dominate the market and produce a majority of the industry’s total output. (AmosWEB). The three prevailing ‘fast food giants’, according to their 2009 annual reports, were McDonald’s, Yum!Brands (Taco Bell, Kentucky Fried Chicken, Pizza Hut), and Wendy’s International. (Wikinvest). Though there are many competitors in the fast food industry, these three companies joined with a few others have a
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