Assess Industry Competitive Structure
Within the restaurant industry, the quick service restaurants (QSR) sector, or better known as fast-food restaurants, are classified as “Perfectly Competitive” along the Industry Competitive Structure below. Monopolistic
Oligopolistic Suppliers Perfectly Competitive
Monopsonistics Characteristics of the industry that places it within a perfectly competitive environment are as follows: 1.
Rivalry within the industry is intense
Role of government is minimal
Spending on advertising is high
Rivalry – there are appoximately 8 million restaurants worldwide in an extremely competitive environment. Within the industry, there are about 300 companies involved in chain restaurants. Role of government – is minimal other than the oversight of food safety. Spending on advertising – the QSR sector is dominated by large chains which posses huge national marketing budgets that advertise heavily on television and through promotional tie-ins with movies and sports. Strategic Group Mapping
One of the concerns within the QSR segment is market saturation. Looking at the number of locations and most recent sales growth we map the largest chain restaurants based on sales and look at the number of location and recent sales growth (2007 vs. 2006). Evaluate Industry Marketing Practices
Being a global restaurant within the QSR segment requires a very high level of promotional spend to remain competitive. Some of our most memerorable commericlas came from the fast food industry. Such classics as McDonald’s two whole beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun to Wendy’s “where’s the beef?” The large chains tend to have huge national marketing budgets and advertise heavily on television and through promotional tie-ins with movies and sports. However, with increasing food costs to restaurants and the poor economic conditions facing many of the...
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