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Business Strategies of Fast Food Venture

Business Strategies of Fast Food Venture

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Introduction

Fast food is the food that takes comparatively less time, and served fast food as we all know. Fast food originated during the post World War II times when men were away and women started going out like the men for working. Eating outside was luxury earlier but after advent of fast food it became common whereabouts than necessity. Thus Americans spend more on this industry as getting prepared food faster was their necessity. The more demand gave birth to the fast food of the then society eventually the fast food culture evolved. America saw the growth fast food industry that were very successful are- McDonald, Burger king, Wendy’s, White Castle, Taco Bell, KFC, etc. This is how fast food industry expanded that lead to the origination new workforce. New job opportunities came up where young people mostly worked. During the middle of 1970, the fast food industry started expanding that triggered the famous ‘Burger war’ in the 80s and 90s. With more outlets and brands, the customer had increasing choice that compelled the companies and the restaurants to invent more new business strategies to attract the customers, like healthy foods, foods for kids, expansion in menu, etc. thus a competition in the market prevailed from then onwards. As of now fast food has become one of the biggest industry globally. Fast food industry has taken the shape of business, employment, globally. For instance, in 2012 consumers of the United States has spent $160 on consuming fast food. The restaurants of US came up with $660.5 sales. The fast food market of Australia has experienced an average of growth of 6.5 percent annually. Coming to the employment side, 4.1 million Us workers are involved or rather employed in the fast food industry(according to the Bureau of Labor Statistics, US), in 2010. Australia witnessed the increasing rate of people working in fast food industry with 17% of working people. Globally, the fast food market had a growth of 4.8% and the transaction valued 80.3 billion. The more outlets globally, an organization receives more growth. For, instance, McDonald witnessed a hike in its industry when it opened its new outlet in Russia.

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Impact of Environmental Factors

Political Impact

According to Verbeke (2013), the degree of affect that comes upon any industry when any company gets opportunities or pressures from governmental policies and political institution are the political factors related to the growth of any industry. The factors are mostly government policies, terms, initiatives, wars terrorism, political trends, elections, etc. Political factors work in different levels affecting the fast food industry. According to Grünig, and Kühn(2015, p.89-96), During election polls, most people avoid outing to keep themselves safe from getting involved in any sort of negative incidents. The more people are worried about negativity or afraid of going out, the fewer outings affects the fast food industry. Legal challenges affect the fast food companies by making changes in laws of hospitality, etc. The political environment is responsible for the growth or destruction of fast food industry since the people directly affected by political turmoil and the fast food companies who want to make profit in a specific country would face problems in making business (Fowler and Breen, 2013, p.79). For instance, in Pakistan during the early 21st century the scandal surfaced the US Securities made changes on the compliance of the corporate sector. Another example is that of Sri Lanka, that went through civil war and the hostility in Syria and Egypt: all these disruptions make it difficult for the international fast food industries to make business, achieve goals, fulfill mission that has badly affects the growth of fast food industries in these countries. Immigrants come from different countries in search of work and livelihood: a study in 2009 revealed that half of the workers in the National Milk Producers federation are immigrants. In the fast food industry, the worker comprises mainly of immigrants (Kreindler, Gilbert, and Zimbron, 2016, p.525-540) When any government improvises or changes the policies on immigrants there workers get effected thereby affecting the food industry. Brexit has recently affected the fast food industry. Brexit refers to the referendum that speed up on 23rd of 2016 that revealed the support of 51.9% of British people in separating UK from EU, thus UK left European Union. The impact of brexit is significant, as it has opened recruitment push massive as in McDonald where around 5000 new jobs were created because of brexit. Reports say that in Britain fast food chains will be having above 110,000 new workers thereafter.

Technological Impact

Lee et al. (2013, p.6) stated that technological aspects like innovation, incentives, development of competitor technology, information and communication control all industry including fast food industry. How these elements work on a particular company or brand is highly crucial for industrial growth. With the constant change in technology the fast food industry is bound to make improvisations and keep the company updated to tackle competitor issues. Akay, Constant, and Giulietti, (2014, p.72-92) stated that Technology works in three levels on fast food industries:

First in the field of production- by allotting updated machines, using new techniques that are time saving and work force saving at the same time.
Second is in the ways workers are working, the more, workers feel safe while doing the work they feel happy with their work life and that makes the working environment healthier.
Third is marketing- marketing strategies do not remain the same, improved measures and procedures are used in the field of marketing.

Nowadays media or rather social media is a significant tool in marketing which is a product of technology. Morgenstern (2014) opined that firms now do promotions using different technologies. Nowadays companies develop various apps that consumers use to get their food. Since most workers in fast food industry are immigrants as mentioned earlier, technological improvement often makes it difficult for old workers to carry on with the work. Most of the immigrant workers are unskilled and constant change confuse them; this give scopes to the young talent that is a plus point. On the hand, technological improvisation attracts immigrants too. For instance, in 2003 and 2005 the arrival of computers in Beaudry, Greene respectively attracted the labor market. According to Dhingra,, Ottaviano, Sampson, and Van Reenen,, (2016, p.24) Immigrants do not possess any fixed shelter are mostly depended on fast foods because fast foods can reach any corner. Brexit resulted in the fall of pound globally that created a crisis in and hindered fast food companies to improve the technological aspects of the company. Small scale industry is going through this sort of problem that is leading to a poor or comparatively less developed.

Economical Impact

Like in any other business, in fast food industry also economical factors are one of the most crucial factors determining the stability of the industry. The important economical factors are- inflation, taxation, economy trends, seasonality issues, local economy, and the like. Economical failure brings about the failure of the economical system in fast food industry. Again, poor economy of the country will consequently lead low sales. The “Economist” magazine reveals that customers with not so flexible budget and poor economy opt for low price fast food. The magazine adds that if the customer opts for eating homemade food instead of the fast food; this will lead to reduced business activity exposing the chains of fast food to loss. Another economical aspect of fast food industry that just opposite is that, during economical downpour customers go for fast food that are cheaper than the expensive restaurant foods. Immigrants shift from one place to another whenever economic crisis occurs in a country specially the immigrant workers in search of livelihood flow to other places. Like, immediately after Brexit phenomenon the value of pound went down; the next day the value fell to $1.3228, the value was 15% lower than dollar and 10% lower than euro. Due to this fast food industries are in UK are like McDonald planned to open more outlets that is a positive side. Profit within the country is an added advantage undoubtedly.

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Conclusion

With modern fast life style people are more depended on fast foods. Therefore, as an industry it is always on progress with new technologies, investments, market share and the like. Fast food industries are rapidly growing and spreading internationally. Developing countries like India are also pacing in fast food industry. Since food is the fuel to life so the scope fast foods industry is obvious. The political issues that emerge time to time distract the flow of the industry but the grip it has for decades cannot fade away. New measures like home delivery that Dominos was the first to invent to meet the growing demands of the customer. Technological invention gives exposure to wide growth of fast food industry. Marketing of fast food heavily attracts the children. They are one of the crucial part as customers who get attracted easily by the colorful look and tasty flavor. Fast foods go through criticism for not being healthy, but that hardly affects the fast food industry. Since, decades fast foods relate to consumers aesthetically. To grow and make profit fast food industries are picking up new menus, marketing the foods using media with new tools. Fast food industries had great economical growth in past and has future scope further.

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Reference

Akay, A., Constant, A. and Giulietti, C., (2014). The impact of immigration on the well-being of natives. Journal of economic Behavior & organization, 103, pp.72-92.
Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J., (2016). The impact of Brexit on foreign investment in the UK. BREXIT 2016, 5(4), p.24.
Fowler, L. and Breen, J., (2013). The impact of political factors on states’ adoption of renewable portfolio standards. The Electricity Journal, 26(2), pp.79-94.
Grünig, R. and Kühn, R., (2015). Global Environmental Analysis. In The Strategy Planning Process, 44(3), pp. 89-96
Kreindler, R., Gilbert, P. and Zimbron, R., (2016). Impact of Brexit on UK Competition Litigation and Arbitration. Journal of International Arbitration, 33(4), pp.521-540.
Lee, W., Tyrrell, T. and Erdem, M., (2013). Exploring the behavioral aspects of adopting technology: Meeting planners' use of social network media and the impact of perceived critical mass. Journal of Hospitality and Tourism Technology, 4(1), pp.6-22.
Morgenstern, R.D., (2014). Economic analyses at EPA: assessing regulatory impact. London: Routledge.
Verbeke, A., (2013). International business strategy. Cambridge: Cambridge University Press.