Description
The realisation of the ability to produce initially precedes the concept of the customer, i.e. pizza restaurants and ethnic restaurants moving into the take away area along with lower cost goods such as fish and chips take away.
Strategic Review Analysis of the
Fast Food Sector
Analysis of the Fast Food Market
? Convenient
? Competitive prices
? Varied selection
? Wide target market
? Convenience of locations
? High labour turnover
? Low labour costs
? Unskilled labour
? Relatively low–tech environment
? Questionable nutritional value
Product Orientated…
Production
capabilities
Manufacture
product
Sales effort Customers
Product Orientated
The realisation of the ability to produce initially precedes the concept
of the customer, i.e. pizza restaurants and ethnic restaurants moving
into the take away area along with lower cost goods such as fish and
chips take away.
An inward looking stance
…or Marketing Orientated?
Consumer
needs
Market
opportunities
Market
product and
services
Customers
Market Orientated
The desire to provide for the consumers wants is the primary initiative,
i.e. branded chain restaurants such as McDonalds, KFC and Burger
King. A pro-active approach rather than re-active.
An outward looking stance
D.E.E.P.L.I.S.T. analysis
? Demographic
Population
Socio-Economic Groups
? Economic
The Euro
Employment
Terrorist Attacks
? Ecological
Foot and Mouth
GM Foods
Vegetarianism
D.E.E.P.L.I.S.T. analysis
? Political & Legal
Disability Discrimination Act
Minimum Wage
Food Legislation
? Information
? Social
Population
D.E.E.P.L.I.S.T. analysis
? Technology
Internet
Advances in kitchen Technology
New discoveries/developments
E.P.O.S system
Competitive Structure and
Environment
? Split by branded and independent operators (see figure 1)
? Sales grown through rapid expansion
? Investment in marketing campaigns to stay in the public eye
? Price wars – rivalry between major brands
? To invest in the future and to stay competitive
? Rebranding
Market Size
Size of Fast Food Market
8757
9383
10115
10830
11551
12263
8847
9292
9774
10126
10494
10988
1996
1997
1998
1999
2000
2001
Y
e
a
r
Independent
Operations £m
Branded Chain
Operations £m
Branded Market
£1,100
£304
£475
£7
£15
£1,166
£318
£503
£7
£16
£1,315
£338
£530
£8
£17
£1,505
£366
£555
£8
£17
£1,700
£388
£633
£8
£18
£1,840
£408
£691
£8
£19
£-
£500
£1,000
£1,500
£2,000
Value £M
1996 1997 1998 1999 2000 2001
Year
Size of Branded Fast Food Market
Burgers Pizza & Pasta Fried Chicken
Fish & Chips Other Fast Foods
Directional Policy Matrix
Generic Strategies
Consumer Trends in the Fast Food
Sector
? Increase in the interest of the takeaway market – a growth market
? Women play a greater role in the workforce, more disposable
income
? Interest in healthy eating, vegetarianism, and heightened concern
with regard to red meat
? Competition from supermarket pre-prepared meals
Burgers
? A decline in the sales of beef burgers due to foot and mouth
disease and BSE fears
? McDonalds suffered a fall in profits of 16% in Europe
? Diageo are investigating the dispersion of the Burger King chain,
followed closely by Wimpy
WHY?
? More consumers are becoming environmentally and health
conscious
? High consumer interest in organic food
? Desire for higher quality products as a result of more disposable
income and safety fears
? McDonalds is looking to expanding into other markets, i.e. hotels
? Limited growth in the short to medium term (1 – 5 years)
Fried Chicken
? Segment grew by 33%, between 1996 and 2000, to £633 million
WHY?
? Customers are eating more chicken due to its perceived healthier
image
? The segment is at a higher growth rate than others in the market,
perhaps due to recent health scares
? Takeaway is increasing its share from 50% in 1998 to an
estimated 54% in 2000
? Takeaway chicken accounts for an estimated 80% of sector sales
? Short term growth will be achieved by planned expansion and
differentiation
Ethnic Takeaways
? Sales are expected to increase by 16% between 2000 and 2004
WHY?
? Cheaper foreign travel to long haul destinations encourages
interest
? Increasing number of ethnic outlets
? Chinese takeaways are more buoyant in terms of segment value
Pizza and Pasta
? Popular with a large target market and is perceived as a healthy
option
? The pizza segment is moving more upmarket, e.g. Pizza Express,
Ask etc
Fish and Chips
? A broad age appeal, despite increasing competition
? Those in low socio economic groups are among the most common
consumers
? The sector is in decline due to rising prices of both fish and
potatoes
? Lack of supplies
? Success of relatively high market fish cafes
? Many outlets have diversified their menu
? In the long term, not a good market to invest into
Sandwiches
? In 2001, sandwich consumption will account for over 13% of the
total eating out market
? The segment enjoys growth rates of between 7 and 8%
? Product innovation
? Appeals to the consumer
? Satisfies nutritional demand for healthy eating
? Suits the increase in busier lifestyles
? 38% of sandwich eating working managers and 31% of sandwich
eating women stop off for a sandwich
? Growing affluence has increased sales
? In the long term, growth in this sector will be obtained by sandwich
delivery
Salad Market
? 31% increase at current prices over the next 4 years
? Driven by the demand for convenience and healthy foods
? Key target markets are younger, pre-family, working consumers
with busy lifestyles
? Added value products will ensure growth
Product Life-Cycle to reflect market
Profit
(£)
Time
Others
Ethnic
Burgers
Pizza & Pasta
Sandwiches
Chicken
Fish & Chips
Stakeholder Mapping:
Burger King, McDonalds and
K.F.C.
Low Level of Interest High
Low
High
P
o
w
e
r
Lenders
Shareholders
The Chairman of Directors
Suppliers
Employees (Full Time) Employees (Part Time)
Customers
Government
Stakeholder Mapping:
Fish and chip and sandwich shop independents
Low Level of Interest High
Low
High
P
o
w
e
r
Employees
Customers
Government Employees
Investors (others)
Investors (Banks)
Suppliers
Sandwich shop stakeholder map
variation
Low Level of interest high
Low
P
o
w
e
r
High
Owner
Employees Suppliers
Government
Investors (others)
Investors (banks)
Customers
Stakeholder Mapping:
McDonalds and Prêt a Manger
Low Level of Interest High
Low
High
P
o
w
e
r
Employees (full time)
Employees (full time)
Employees (part time) Employees (part time)
Suppliers
Suppliers
Shareholders
Chairman/Directors
Lenders
Chairman/Directors
Shareholders
Customers
Government
Government
Customers
The Short Term Future (1Year)
• Free of antibiotics Growth Hormones
• Recession?
• ‘Cash Rich – Time Poor’
• Continued growth in fast-food market predicted
• Sandwiches are they the future?
• Charity related?
The Mid-Term Future (5 Years)
• Affected by decreased travel and tourism
• Shift toward healthier foods due to BSE F&M
• The Fast food generation
• Better quality all round service of fast food outlets
• Labelling of food products
• Lack of suitable new sites
• What are the possibilities for growth?
The Long-Term Future
(10 Years)
• Increase in Spanish population
doc_172765726.ppt
The realisation of the ability to produce initially precedes the concept of the customer, i.e. pizza restaurants and ethnic restaurants moving into the take away area along with lower cost goods such as fish and chips take away.
Strategic Review Analysis of the
Fast Food Sector
Analysis of the Fast Food Market
? Convenient
? Competitive prices
? Varied selection
? Wide target market
? Convenience of locations
? High labour turnover
? Low labour costs
? Unskilled labour
? Relatively low–tech environment
? Questionable nutritional value
Product Orientated…
Production
capabilities
Manufacture
product
Sales effort Customers
Product Orientated
The realisation of the ability to produce initially precedes the concept
of the customer, i.e. pizza restaurants and ethnic restaurants moving
into the take away area along with lower cost goods such as fish and
chips take away.
An inward looking stance
…or Marketing Orientated?
Consumer
needs
Market
opportunities
Market
product and
services
Customers
Market Orientated
The desire to provide for the consumers wants is the primary initiative,
i.e. branded chain restaurants such as McDonalds, KFC and Burger
King. A pro-active approach rather than re-active.
An outward looking stance
D.E.E.P.L.I.S.T. analysis
? Demographic
Population
Socio-Economic Groups
? Economic
The Euro
Employment
Terrorist Attacks
? Ecological
Foot and Mouth
GM Foods
Vegetarianism
D.E.E.P.L.I.S.T. analysis
? Political & Legal
Disability Discrimination Act
Minimum Wage
Food Legislation
? Information
? Social
Population
D.E.E.P.L.I.S.T. analysis
? Technology
Internet
Advances in kitchen Technology
New discoveries/developments
E.P.O.S system
Competitive Structure and
Environment
? Split by branded and independent operators (see figure 1)
? Sales grown through rapid expansion
? Investment in marketing campaigns to stay in the public eye
? Price wars – rivalry between major brands
? To invest in the future and to stay competitive
? Rebranding
Market Size
Size of Fast Food Market
8757
9383
10115
10830
11551
12263
8847
9292
9774
10126
10494
10988
1996
1997
1998
1999
2000
2001
Y
e
a
r
Independent
Operations £m
Branded Chain
Operations £m
Branded Market
£1,100
£304
£475
£7
£15
£1,166
£318
£503
£7
£16
£1,315
£338
£530
£8
£17
£1,505
£366
£555
£8
£17
£1,700
£388
£633
£8
£18
£1,840
£408
£691
£8
£19
£-
£500
£1,000
£1,500
£2,000
Value £M
1996 1997 1998 1999 2000 2001
Year
Size of Branded Fast Food Market
Burgers Pizza & Pasta Fried Chicken
Fish & Chips Other Fast Foods
Directional Policy Matrix
Generic Strategies
Consumer Trends in the Fast Food
Sector
? Increase in the interest of the takeaway market – a growth market
? Women play a greater role in the workforce, more disposable
income
? Interest in healthy eating, vegetarianism, and heightened concern
with regard to red meat
? Competition from supermarket pre-prepared meals
Burgers
? A decline in the sales of beef burgers due to foot and mouth
disease and BSE fears
? McDonalds suffered a fall in profits of 16% in Europe
? Diageo are investigating the dispersion of the Burger King chain,
followed closely by Wimpy
WHY?
? More consumers are becoming environmentally and health
conscious
? High consumer interest in organic food
? Desire for higher quality products as a result of more disposable
income and safety fears
? McDonalds is looking to expanding into other markets, i.e. hotels
? Limited growth in the short to medium term (1 – 5 years)
Fried Chicken
? Segment grew by 33%, between 1996 and 2000, to £633 million
WHY?
? Customers are eating more chicken due to its perceived healthier
image
? The segment is at a higher growth rate than others in the market,
perhaps due to recent health scares
? Takeaway is increasing its share from 50% in 1998 to an
estimated 54% in 2000
? Takeaway chicken accounts for an estimated 80% of sector sales
? Short term growth will be achieved by planned expansion and
differentiation
Ethnic Takeaways
? Sales are expected to increase by 16% between 2000 and 2004
WHY?
? Cheaper foreign travel to long haul destinations encourages
interest
? Increasing number of ethnic outlets
? Chinese takeaways are more buoyant in terms of segment value
Pizza and Pasta
? Popular with a large target market and is perceived as a healthy
option
? The pizza segment is moving more upmarket, e.g. Pizza Express,
Ask etc
Fish and Chips
? A broad age appeal, despite increasing competition
? Those in low socio economic groups are among the most common
consumers
? The sector is in decline due to rising prices of both fish and
potatoes
? Lack of supplies
? Success of relatively high market fish cafes
? Many outlets have diversified their menu
? In the long term, not a good market to invest into
Sandwiches
? In 2001, sandwich consumption will account for over 13% of the
total eating out market
? The segment enjoys growth rates of between 7 and 8%
? Product innovation
? Appeals to the consumer
? Satisfies nutritional demand for healthy eating
? Suits the increase in busier lifestyles
? 38% of sandwich eating working managers and 31% of sandwich
eating women stop off for a sandwich
? Growing affluence has increased sales
? In the long term, growth in this sector will be obtained by sandwich
delivery
Salad Market
? 31% increase at current prices over the next 4 years
? Driven by the demand for convenience and healthy foods
? Key target markets are younger, pre-family, working consumers
with busy lifestyles
? Added value products will ensure growth
Product Life-Cycle to reflect market
Profit
(£)
Time
Others
Ethnic
Burgers
Pizza & Pasta
Sandwiches
Chicken
Fish & Chips
Stakeholder Mapping:
Burger King, McDonalds and
K.F.C.
Low Level of Interest High
Low
High
P
o
w
e
r
Lenders
Shareholders
The Chairman of Directors
Suppliers
Employees (Full Time) Employees (Part Time)
Customers
Government
Stakeholder Mapping:
Fish and chip and sandwich shop independents
Low Level of Interest High
Low
High
P
o
w
e
r
Employees
Customers
Government Employees
Investors (others)
Investors (Banks)
Suppliers
Sandwich shop stakeholder map
variation
Low Level of interest high
Low
P
o
w
e
r
High
Owner
Employees Suppliers
Government
Investors (others)
Investors (banks)
Customers
Stakeholder Mapping:
McDonalds and Prêt a Manger
Low Level of Interest High
Low
High
P
o
w
e
r
Employees (full time)
Employees (full time)
Employees (part time) Employees (part time)
Suppliers
Suppliers
Shareholders
Chairman/Directors
Lenders
Chairman/Directors
Shareholders
Customers
Government
Government
Customers
The Short Term Future (1Year)
• Free of antibiotics Growth Hormones
• Recession?
• ‘Cash Rich – Time Poor’
• Continued growth in fast-food market predicted
• Sandwiches are they the future?
• Charity related?
The Mid-Term Future (5 Years)
• Affected by decreased travel and tourism
• Shift toward healthier foods due to BSE F&M
• The Fast food generation
• Better quality all round service of fast food outlets
• Labelling of food products
• Lack of suitable new sites
• What are the possibilities for growth?
The Long-Term Future
(10 Years)
• Increase in Spanish population
doc_172765726.ppt