The Fast Food Industry Sectors Size Business Essay

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According to (Kuhn Kerstin 2009) "The UK's fast food industry has benefited from the recession, with the sector increasing its presence by more than 8% in the last year, research has found. While the leisure sector on a whole has seen a closure rate of 10%, fast food restaurants in the UK's top 10 cities have raised by 8.2% to more than 1,450, according to a survey by market analyst the Local Research Company. The Food for Thought review of fast food outlets found that the most successful brands have been Domino's, Eat and Prêt A Manger. Burger King has been the least successful, having closed 11.8% of its outlets in the top 10 cities which include London, Edinburgh, Manchester and Cardiff". (Caterer and hotelkeeper)

PESTEL Analysis web site tells us that the PESTEL is a "Politic, Economic, Social, Technology, Environments, and Legal." (Kotler 1998) said "PESTEL analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations."

The PESTEL factors that have affected the industry in the last 10 years: PESTEL Analysis of the UK fast food industry: (UKSSAYS)

Political: The political surrounding can be strongly affected marketers decisions. There has been increased regulation of business in recent times. The fast-food market was highly affected by the introduction of (GST) Goods & Service Tax which resulted in the changes of prices in fast food outlets while the prices of other food items remained unchanged.

Economic: The cost for setting-up a fast food joint or an outlet is very low. Therefore it becomes comparatively easy to enter the market. Franchising is an added beneficial factor and helps in setting up a good brand image. The market is growing as ever and a growing market is very important for the fast food industry.

Social: The people in UK have busy lifestyles and the fact that fast food restaurants are known for a quick and convenient service, they have become a part of the fast paced UK lifestyle. The people are a becoming more health conscious and have started adopting healthy eating as obesity is a known problem in UK.

Technological: The fast food industry is a growing industry and technology has played an important role for the on-going success. They have to keep up with the fast pace of changing technology to keep themselves in competition. Electronic Funds Transfer at Point of Sale (EFTPOS) which is accepting debit or credit cards from customers at the time of their purchase. Online marketing for kids such as games, promotions of new products and offers on the website. Computerised order-taking and billing systems (till system).

Environmental: An environmentally friendly company has a good image in the minds of consumers. This has a good effect on the minds of the consumers that the food they are eating does not affect the environment.

Legislation: The fast food industry has to adopt proper Health and Safety guidelines as they are associated with food. Food standard agency is an agency which is responsible for the health of public in relation to food in the UK. It is important for the fast food industry to follow the regulations imposed by the FSA (Food Standard Agency) in the interest of public health.

According to Judith C. Rodriguez (2011) Eating Habits Nutrition and Well-Being A to Z" The PESTEL factors that are currently affecting the Fast Food industry are:

Political: Political factors also influence food availability and trends. Food laws and trade agreements affect what is available within and across countries, and also affect food prices. Food labelling laws determine what consumers know about the food they purchase. Eating habits are thus the result of both external factors, such as politics, and internal factors, such as values.

Economic: Money, values, and consumer skills all affect what a person purchases. The price of a food, however, is not an indicator of its nutritional value. Cost is a complex combination of a food's availability, status, and demand.

Social: Members of a social group depend on each other, share a common culture, and influence each other's behaviours and values. A person's membership in particular peer, work, or community groups impacts food behaviours.

Technology: Has created a society which expects instant results. This technological revolution has increased the rate at which information is exchanged between stakeholders. A faster exchange of information can benefit businesses as they are able to react quickly to changes within their operating environment. (Learn marketing)

Environmental: The influence of the environment on food habits derives from a composite of ecological and social factors. Foods that are commonly and easily grown within a specific region frequently become a part of the local cuisine. However, modern technology, agricultural practices, and transportation methods have increased the year-round availability of many foods, and many foods that were previously available only at certain seasons or in specific areas are now available almost anywhere, at any time.

Legislation: There is various legislation in place the government announced its 'New Standards for School Food' in 2006 and all schools are now expected to comply with a range of nutritional regulations. Schools are no longer allowed to provide chocolates and sweets, crisps and savoury snacks (except for seeds, nuts and vegetables) and low grade meat products such as burgers, pasties or sausages. They must also not provide deep fried foods more than twice a week. (fast food nation)

The PESTEL factors that is likely to affect it in the next 10 years? "Fast food's chain reaction: Soon there will be instant eating outlets almost everywhere we turn. Richard Thomson charts the course of an imported industry that has yet to reach its potential." (Independent)

Politic: Local authorities should be given stronger powers to ban the spread of fried chicken shops and other fast food outlets, and end the sale of cheap alcohol from corner shops, especially near schools, according to proposals put forward by Diane Abbott, the shadow public health minister.(guardian).

Economic: More than half of all meals eaten out in Britain are for the first time from fast food restaurants, alarming figures reveal. Burgers fried chicken, pizzas, kebabs and take-out curry account for 50.4 per cent of meals bought outside the home. This is up from 47.3 per cent in 2008 and comes to some 5.54billion fast food meals a year. The growth comes from all sections of society, including families, pupils skipping school meals and workers who do not have access to a workplace canteen. (dailymail)

Social: Children given more fast food meals will grow up to have a lower IQ than those who regularly eat freshly-cooked meals, according to a study. Childhood nutrition has long lasting effects on IQ, even after previous intelligence and wealth and social status are taken into account, it found. The study examined whether the type of main meal that children ate each day had an impact on their cognitive ability and growth.(dailymail)

Technology: Mobile and online technology are changing the UK fast food industry, with many operators offering online ordering and delivery services (my news desk)

Environments: The fast food companies have been under pressure for some time to reduce the amount of packaging they use in their food, and many have tried to rise to the challenge. Recycling facilities make it easier to dispose of your empty pizza boxes with your conscience intact, and McDonalds has been actively trying to reduce waste by making use of recycled materials in some of its food containers. (fast food nation)

Legal: There are also rumblings from government that it will encourage schools to keep pupils in at lunchtime to avoid them getting their fast food fix elsewhere.

(fast food nation)

Competitive advantage?

According in Order to Achieve Competitive Advantages in the Fast Food Industry Burger King Business Essay Burger King Corporation (BKC) is the world's second largest fast-food hamburger chain which trailing only McDonald's. Referring to Burger King Website, it shows that over 11 million customers visit their restaurants worldwide each day and over 2.4 billion of its burgers are sold each year across the global. How do they able to achieve it? What are the reasons? From my point of view, apart from their strategies, the main cause that leads to have these results today is their quality. Just like what have stated in our textbook: "quality is a wonderful tonic for improving operations." I believe that by having a good quality, it will bring the company to have a good reputation. This is important because it can affect the entire organization from suppliers to customers, by incurring the lower cost and obtain higher profit. (ukssays)

Conclusion

According to buzzle By (Batul Nafisa Baxamusa 2012) "Fast foods, per se, can be incredibly healthy meals, depending on the ingenuity and resourcefulness of the cook. However, the term has, in recent times, become almost synonymous with junk food, which is only appealing to the palate, loaded on unhealthy calories and has little or no nutritional value."(buzzle.com)

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