Five Forces About Fast Food Chains
TETA‐2607 Exercise 2
Part I: brief introduction of fast food restaurants
The industry I selected is fast food restaurants which are also named as quick service restaurants. As a special type of restaurant, fast food restaurant is characterized both by its fast food cuisine and by its self table service. The majority of fast food restaurants are part of a restaurant chain or franchise operation so that each branch could be provisioned by standardized ingredients and controlled by unified management. Within this industry, several leaders should be identified. Founded in 1940, McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, daily serving around 68 million customers in 119 countries. (mcdonalds.com & burgerbusiness.com) In the year of 2011, the net income has reached 27 billion USD with net profit of 5.5 billion USD. In the recent five years, McDonald’s revenue kept increasing and the average increase rate was 3.1 %.( McDonald’s annual report,2011). Subway which is owned and operated by Doctor’s Associate is an American restaurant franchise which mainly sells sandwiches and salads. Subway, as the largest single-brand restaurant chain globally, keeps the fastest growing franchises in the world with 37000 restaurants in more than 100 countries. (subway.com) KFC (Kentucky Fried Chicken) is the world’s largest chain of fried chicken fast food restaurants. It is also the second largest restaurant chain after McDonald’s, with over 17,000 outlets in 105 countries. (KFC.com)
Part II: Industry analysis by Five Forces
In 1979, Michael Porter published “How Competitive Force Shapes Strategy” in the Harvard Business Review (HBR) which started a revolution in the strategic field. He proposed five competitive forces which could to great extent determine the profitability of an industry and strategy’s formulation. In this part, Five Forces will be utilized to analyze the fast food restaurant industry.
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Part I: brief introduction of fast food restaurants
The industry I selected is fast food restaurants which are also named as quick service restaurants. As a special type of restaurant, fast food restaurant is characterized both by its fast food cuisine and by its self table service. The majority of fast food restaurants are part of a restaurant chain or franchise operation so that each branch could be provisioned by standardized ingredients and controlled by unified management. Within this industry, several leaders should be identified. Founded in 1940, McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, daily serving around 68 million customers in 119 countries. (mcdonalds.com & burgerbusiness.com) In the year of 2011, the net income has reached 27 billion USD with net profit of 5.5 billion USD. In the recent five years, McDonald’s revenue kept increasing and the average increase rate was 3.1 %.( McDonald’s annual report,2011). Subway which is owned and operated by Doctor’s Associate is an American restaurant franchise which mainly sells sandwiches and salads. Subway, as the largest single-brand restaurant chain globally, keeps the fastest growing franchises in the world with 37000 restaurants in more than 100 countries. (subway.com) KFC (Kentucky Fried Chicken) is the world’s largest chain of fried chicken fast food restaurants. It is also the second largest restaurant chain after McDonald’s, with over 17,000 outlets in 105 countries. (KFC.com)
Part II: Industry analysis by Five Forces
In 1979, Michael Porter published “How Competitive Force Shapes Strategy” in the Harvard Business Review (HBR) which started a revolution in the strategic field. He proposed five competitive forces which could to great extent determine the profitability of an industry and strategy’s formulation. In this part, Five Forces will be utilized to analyze the fast food restaurant industry.
[Type text]
Page 1