Fast Food Industry Consultancy

Fast Food Industry Consultancy - Fast Food Industry Fast...

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Fast Food Industry Fast Food Chains Abstract The purpose of the study is to analyze the application of concepts and theories of managerial economics in relation to the actual data and information from the fast food industry and related companies. Two fast food chains have been studied and analyzed throughout the project. MacDonald’s and Burger King have been chosen as part of Fast Food industry because both companies are the biggest and closest competitors of each other; they both provide an insight of the frame of the industry, advantages and disadvantages of franchise system and production techniques, demand and supply chains, keys of success and weaknesses that could bust or hinder growth in short- and long-term. The study concentrates on demand and supply structure in the industry, market forms in which the industry can operate optimally, scope of production, production techniques, cost structures, prevailing market conditions and their impact on the firm, and financial analysis of the companies. To collect the relevant data, the companies’ annual reports were critically analyzed and evaluated for exact position to be sorted, the current market conditions to be measured and their possible future effects on the firms working environment to be evaluated. Companies’ Overview McDonald’s is located in 117 countries and on 6 continents and operates over 32,000 restaurants worldwide. McDonald’s is the clear market leader in the fast food industry. For 2010 the company recorded $24 billion in sales, the highest in the industry, with continues increase year over year (“McDonald's Corporation”, 2010). Burger King has more than 12,100 restaurants in 76 countries. As with McDonald’s, approximately 90 percent of restaurants are owned and operated by independent franchisees. The company has the second highest sales in the industry with generated sales of $2.5 billion (“Burger King Holdings, Inc”, 2010). Product Identification: McDonald’s and Burger King concentrate on burgers in their menus. However, while McDonald's has diversified into salads, paninis and cappuccinos, the Burger King menu remains firmly rooted in burgers, fries and fizzy drinks (Clark, 2010). Furthermore,
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McDonald’s has recognized the emerging trends of customers’ demand for healthy food and focused its efforts toward it. Those reflect the trends in growths and sales of both companies – positive for McDonald’s and negative for Burger King. Industry Overview The fast food industry is highly fragmented with the top 50 companies holding about 25% of the industry sales. The restaurant industry is highly competitive in terms of price, service, location, and food quality and is often affected by changes in consumer trends, economic conditions, demographics, traffic patterns, and concerns about the nutritional content of quick service foods (“US Fast Food Franchise Industry Report”, 2010). Fast food industry or Quick Service Restaurant (QSR) is characterized by its fast food cuisine
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Fast Food Industry Consultancy - Fast Food Industry Fast...

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