Global Market Analysis Of Fast Food Industry And Internal Analysis Of Five Guys Burgers International

Macro and competitive factors that impose impact on Global fast-food industry

Fast foods are food items that have gained popularity in this era of busy lifestyles, since they are easily accessible, affordable and quickly consumable and needs low preparation time. However, fast foods are generally nutritionally less valuable compared to other dishes. In this report, global market analysis of fast food industry is done along with internal analysis of Five Guys Burgers international and recommendation of a targeted market for the company’s business expansion. This report includes analysis of macro and competitive factors that imposes impact on Global fast-food industry, internal business Environment and SWOT analysis of Five Guys Burger’s International, framework of Japan, India, Singapore and China and target market of China, mode of entry in Singapore and market Mix to succeed in Singapore. Finally, it has been concluded that being a well know fast food brand, Five Guys Burger will surely gain success in the Singaporean Fast food industry with the help of the mentioned strategies.

Macro and competitive factors that imposes impact on Global fast-food industry

The growth of fast-food industry has taken a leap since 1970 and this has result in growth of revenue from six billion dollars to 200 billion dollars (Lang and Heasman 2015 . In order to analyze the macro factors PESTEL analysis of Food industries across the world is done:

• Political

The effects imposed by political factors on fast food industries across the world, varies from country to country. Political factors of a country include regulation associated with wages, food quality and hygiene that need to be followed by the fast food industries in order to expand their business in that country. (refer to appendix)

• Economic

Considering the fact, that recession had imposed a negative impact on the overall economic condition of the countries across the world, a majority of fast food industries had included cheaper items in their menu lists in order to cope with the recession.(Refer to appendix)

Social

Global health awareness along with the media has influenced not only the fast food centers but also the entire food industries (Monteiro et al. 2013). Cultural factors also plays an important role and hence the fast food industries markets food item by adopting the local preferences. Apart from this, fast food companies should be responsible towards children below 13 years.

• Technological

Online ordering and social media has brought immense changes in fast food marketing. Usage of kiosks and digital displays along with various methods of serving the customers through innovate channels have reduced the labor cost largely. Apart from this, highly advanced machines and transport system has imposed a positive impact on the fast food industries (Yakovleva, Sarkis and Sloan 2012).

• PESTEL Analysis of food industries for Political factors

  Environmental

Environmental regulations related to food industries has grown stricter along with the increased stiffness in quality standards in developed countries. Better waste management and green approaches helps a particular company to gain consumer loyalty.

• Legal

The major two areas of fast food industries that gets affected by food laws are food quality and nutritive values (Nestle 2013). Besides that, waste management and packaging also were influenced due to laws and regulations. It is crucially important for the fast-food industries to comply with the regulation.  

Competitive factor analysis of fast food industries across the world

• Bargaining power of the Consumers

In spite of the fact that fast food prices are accepted and known globally, little differences are their due to difference in places and brand value. Consumers of fast food industries are different from that of other food industries since fast food are bought more frequently and the eatable time is much lesser than that of cuisines. ( Refer to appendix)

• Bargaining power of the Supplier

In the fast food industry, suppliers holds bargaining power since the supply chain does influence the quality and price of the food items (Schlosser 2012). However, the power of the suppliers get reduced in cases where fast food companies decide to buy cheap meats and vegetables from neighbor countries instead of getting supplied by the local suppliers.

• Competitive  rivalry

Competitive rivalry is highly prevalent in the first food industry since severe competition prevails between several renowned fast food brands like KFC, Subway, Barger King and pizza hut (Hinestroza and James 2014). This has resulted in difficulties to attract and maintain consumers.  

• Threat of substitute

The fact that a majority of fast food chain does not follow consumer requirements closely can be clearly understood since they have still confined their business in manufacturing classic products like French fries, burgers and others. However, in developed country people are getting more inclined towards precooked and low calorie foods since they are considered to be healthier. Besides that, the brand value of renowned fast food centers are getting reduced since people are more inclined towards fast foods that are available in the supermarkets than that of the fast food outlets (Best 2017).   

• Threat of new entrance

In fast food industry, threat from new entrants depends on the three major factors, namely, moderate capital cost, low-switching costs and high brand development costs. ( Refer to appendix)

• Inbound logistics

Economic factors in fast food industry

The beef used by the company is neither cattle free range nor organic, the distributers of the company buy raw materials only from those meat suppliers who follow all the USDA regulations (Gupta 2013).

• Operations

Five Guys Burgers franchise restaurants follows one of the three formats, namely, developmental license, conventional franchise and affiliate.

• The Outbound logistics

The company operates in the four formats namely, sit down restaurants, and counter service outlets in food courts and online delivery format. The procedure of having meals in sit down restaurants format that involves being served by a waiter or waitress is one of the most common process of dining out. However, Five Guys Burger’s counter-service outlets involves self-service. The company also provides home delivery of food items ordered online (Whitton et al. 2014).

• Market and sales

Five Guys Burgers uses both print and media services in order to advertise and communicate with its targeted consumers. Considering the fact that eminent celebrities like Barak Obama and Phil Mickelson have visited the company, Five Guys Burger has earned a commendable amount of media attention.

• Service

High speed and excellent customer services is one of the chief competitive advantages of Five Guys Burger International. The online service of the Company is also well known for its well-maintained call reception and high-speed delivery.

Support activities

• Infrastructure

Five Burger Guys International operates both franchised restaurants (839) and company owned outlets (200). The company has 1039 stores in Canada and USA with a commitment of building 1500 stores in various parts of the world. The company has shown a remarkable growth of 792 percent since 2006. ( Refer to appendix)

• HR Management

The employees of Five Guys burger International are reportedly satisfied with the workplace atmosphere and wage structure of the company. However, improvement is required in the upper management. Besides that, free lunches, discounts and job training are also provided to the employees by the Organization.

• Technology Development

The company provides online ordering and home deliveries and thus, is dependent on highly advanced technologies. Besides that, the company also use advanced technological machines and tools in order to fasten up their productivity.

• Procurement

The company uses 80/20 high quality-ground chuck meat that contains only heifer and steer meat. Additionally, it does not includes ground fatty trimmings or cow meat.  Considering the fact that the beef used by the company is neither cattle free range nor organic, the distributers of the company buys raw materials only from those meat suppliers who follow all the USDA regulations. As mentioned earlier the tools and machines used by the company are of highly advanced technology.  

Social factors affecting fast food industry

SWOT Analysis of Five Guys Burgers International

Strengths

• The brand Equity and reputation of the company can be considered as one of its major strengths since the restaurants are the top pics among consumers.
• High quality and freshness of the fast food items that are handmade is another mention worthy strength of Five Guys. No freezer is used by the company since it serves only freshly made food items.
• It is one of the fasted growing food chain in US with more than 1000 locations.
• Affordable meals, online services along with home delivery and prolonged sectional hour that enables targeting late night snackers adds major strength to the company.

Weaknesses

• Low expenditure on media advertisement can be considered as a major weakness of the company.
• Restricted menu that involves only classic fast foods is another weakness of the company.
• Low market share compared to the giant players in the industry.

Opportunities

• Five Guys has the opportunity to add healthy meals in its menu for the health conscious consumers.
• There are scopes of geographical expansion in order to increase the overall revenue of the company.

Threats

• Health concerns due to bird flu epidemic can adversely affect the business.
• Globally renowned competitors can affect the market share of the company.
• Increasing health awareness along with franchise model can affect the company adversely.

Summary

From the external and internal business analysis of the company, it can be summarized that despite being a well-known fast food organization, Five Guys International has some major shortcoming that can affect the company adversely in the long run. In order to overcome the shortcomings the company must concentrate to build a better management along with incorporating health meals its menu card.

Country	Culture	Concentration	Choices	Consumption	Contractual Obligations	Caveats	Capacity to pay	Communication	Currency	Commitment	Channels
India	India, being a third world country of immense cultural diversities, has lower fast-food consumption	Fast food outlets can be found in major Cities like Delhi, Kolkata, Mumbai and Chennai.	Major international fast food brands are present in major cities of India. However, local fast food centers are dominates the market.	Consumers are majorly from middle, upper middle and elite class of the society.	Fast food Brands in India abides by the FSSAI regulations (Barrows, Vieira Jr and DiPietro 2016).	Underdevelopment of the country can be considered as major caveat.	The capacity to pay is lower than other developed country.	Media infrastructure is modemed but the cost of promotion is remarkably low.	Currency of India is Rupees. 1 rupee = 0.012 pound.	In spite of the fact that market barrier is low, accesibity to the market is not satisfactory.	Both online and offline distribution channel is available in India.
Japan	The consumer behavior is friendly.	Fast food outlets are predominantly present in major cities like Tokyo, Osaka, Nagoya and Yokohama.	Along with some of the major fast food brands, Japanese fast food market is dominated by local fast food centers like Tenya, Matsya and others.	The age of individual associated with fast food consumption ranges from 10 to 50 years.	Fast food centers in Japan abides by Food and sanitation act along with law of Shokuiku (Williams et al. 2012).	Health awareness along with high tendency of consumers to consume homemade meals are two major caveats.	Being a developed country consumer’s capacity to pay is high.	Infrastructure, media coverage and other communicational facilities are well developed (Belas 2014).	Currency of Japan is Yen. 1 Yen= 0.0067 ound. The economy of Japan is stable.	Market barriers is low, trade incentives and access to market is well developed.	Online and offline marketing along with good infrastructure is available Japan.
China	Fast food culture includes both local and international flavors and is popular in teenagers as well as to the junior and senior citizens.	The business can be expanded in major cities like Beijing, Guangzhou, Shanghai, Hong Kong and others.	Five Guys will have to compete with major International fast-food brands like KFC, Burger King, Starbucks, Yum! Along with Chinese fast food centers like Hua Lai Shi, Ting Hsin and others.	The age of individual associated with fast food consumption ranges from 10 to 50 years .	The revised version of China Food and Drug Administration (CFDA) is paying more importance to food safety law, food manufacturing and distribution licenses (Etemad-Sajadi and Rizzuto 2013).	Health awareness of consumers can be considered as a major caveat in china.	Being a developed country, the capacity to pay is moderate in China.	In china, promotion through media as well as online promotion is highly accessible.	Chinese currency is Yuan.1 Yuan= 0.11 British Pound ,	Similar to Singapore.	Both online and offline distribution channel is available in China.
Singapore	Same as that of China.	Major cities like Hougang, Yishun, Tampines, PasirRis are consider to be the targeted region for fast food.	Apart from the international fast food brands, local brands like Carl’s jr, EPIKebabsand  others are also populer there.	Same as that of China.	The fast food companies abides by the NEA and Ava regulations and special attention to Hygiene and food safety standards (Damron and Damron 2013.).	Same as China	Being a developing country the capacity to pay is moderate.	Same as China	Singapore dollar, moderately stable economy	Market barrier is low. Accessibility to market is pretty good in Singapore.	Intermediate capabilities, physical distribution and infrastructure is well developed in China.

From the above-mentioned analysis, the fast food market of Singapore can be considered to the most suitable  one for Five Guys Burger’s international to expand its business. The craze for fast food is much higher in Singapore compared to that of the other mentioned countries and being a developed country the economic stability of Singapore ensures the financial stability of the Consumers.

Considering the fact that Five Guys Burger International is a totally unrecognized fast food brand for consumers in Singapore, in order to enter the fast food market of Singapore the organization should merge with the top shopping malls of Singapore like Paragon shopping center, Mandarin Gallery and VivoCity (Brownell 2012). The organization should also merge with eminent restaurants of Singapore along with offering discount to the consumers in order to build a strong consumer Loyalty in the Country.  

• Pricing Strategy

Considering the fact that Five Guys Burger offers high quality food items within an affordable range, in Singapore, the company should incorporate the following strategies in Singapore:

 Market Oriented pricing Strategy

It shall involve pricing the product in accordance to the market strategies of Singapore, supply and demand condition and Competitive market pricing (Catherine 2014).

• Promotional mix

Considering the fact that one of the chief weaknesses of Five Guys Burgers is its low expenditure on media advertisement, in Singapore, the company should adopt the following tactics for business expansion:

1. Online, print media and television advertising
2. Personal selling
3. Sales promotion
4. Public Relations 

• Product Mix

Apart from serving the chief product line that includes huge variety of burgers, sandwiches, hot dogs, fries and milkshakes, the company should also include healthy food item like a good variety of salads in its menu for the health conscious consumers of Singapore.

• Place/distribution Mix

Considering the fact that five guys Burgers is planning to merge with popular restaurants and shopping malls in Singapore, the following distribution strategies shall be adopted by the company:

1. Online deliveries
2. Restaurants, Shopping mall and Super market
3. Mobile App

The company can adopt the effective strategy of offering coupons to consumers through mobile app for freebies and special offer.

Technological advancements in fast food marketing and industry

Conclusion

From the above report, it can be concluded that, in spite of being considered as nutritionally less healthy than other cuisines, fast food industries across the world are incorporating healthy food items in their menu lists in order to cope up with the global health awareness. Five Guys Burger international should also follow this strategy in order to expand its business globally. Considering the fact that that fast food craze in Singapore is considerably high due to its high economic stability and fast lifestyle, Five Guys Burger international, with the help of its advanced marketing strategies will surely be able to expand its business in Singapore.

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