Case Analysis for Yum! Brands
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1. What are the primary driving forces in the U.S fast food industry in 2004
The primary driving forces in the U.S. fast food industry for 2004 are as follows:
There is a major increase in globalization, no matter where you travel to in this time period you are guaranteed to either see a McDonalds or a Pizza Hut.
The fast food industry has diversified it product line by offering semi healthy choices, such as chicken, salads, fajitas or pizza. To this end, consumers want choices.
Consumers are more likely to be a repeat buyer at a certain fast food chain; if they find something they like, they stick to it. To this end, competition efforts have to more aggressive than ever.
The market is reaching its maturity stage so again, competition has to be very aggressive. It is harder to gain market share now because the market is so established.
Locations for fast food restaurants do not have to be as traditional anymore; it is common to see a McDonalds in the middle of Wal-mart or at the mall.
Consumers are also more educated and will not support companies that are not ethically responsible. For example, KFE receive a lot of bad press from PETA because of its unnatural way its treats and grows its chickens. To this end, KFC has not been able to meet it growth objectives.
2. Using the Porter's Five Forces Model, assess the strengths of each competitive force in the fast food industry.
Porter's Five Forces Model includes the following: in the center is competition, on the left are suppliers, on the right are customers, on the top is substitute products and finally on the bottom is entry barriers.
I will begin from the middle and discuss competition:
First movers have gained significantly in the competition segment and it mainly is because of brand recognition and loyalty. There are so many fast food chains, often located in the same plaza so competition is very fierce. To this end, fast food chains are constantly offering promotions,
1. What are the primary driving forces in the U.S fast food industry in 2004
The primary driving forces in the U.S. fast food industry for 2004 are as follows:
There is a major increase in globalization, no matter where you travel to in this time period you are guaranteed to either see a McDonalds or a Pizza Hut.
The fast food industry has diversified it product line by offering semi healthy choices, such as chicken, salads, fajitas or pizza. To this end, consumers want choices.
Consumers are more likely to be a repeat buyer at a certain fast food chain; if they find something they like, they stick to it. To this end, competition efforts have to more aggressive than ever.
The market is reaching its maturity stage so again, competition has to be very aggressive. It is harder to gain market share now because the market is so established.
Locations for fast food restaurants do not have to be as traditional anymore; it is common to see a McDonalds in the middle of Wal-mart or at the mall.
Consumers are also more educated and will not support companies that are not ethically responsible. For example, KFE receive a lot of bad press from PETA because of its unnatural way its treats and grows its chickens. To this end, KFC has not been able to meet it growth objectives.
2. Using the Porter's Five Forces Model, assess the strengths of each competitive force in the fast food industry.
Porter's Five Forces Model includes the following: in the center is competition, on the left are suppliers, on the right are customers, on the top is substitute products and finally on the bottom is entry barriers.
I will begin from the middle and discuss competition:
First movers have gained significantly in the competition segment and it mainly is because of brand recognition and loyalty. There are so many fast food chains, often located in the same plaza so competition is very fierce. To this end, fast food chains are constantly offering promotions,