Macro Environment Analysis of Mr. Empanada's Fast Food Industry

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Business

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Discussion
Macro environment analysis includes a number of factors in its ambit such as Demographic,
Economic, Socio-Cultural, Technological, Ecological, and Political. All these elements in terms
of Mr. Empanada are defined below.
Political factors
As per the recent 2018 data published by the Centers for Disease Control and Prevention, almost
48 million people in the U.S. get sick, 128,000 are hospitalized, and 3000 deaths occurred each
year because of the diseases occurred from food (FDA). In terms of dealing with this issue, the
Food Safety Modernization Act (FSMA) is used to transform the food safety system of the
country by imposing a number of obligations on the organizations engaged in the fast food
industry. Following are the regulations which are introduced by the FSMA in terms of ensuring
the health and safety of the people of the U.S. All of these regulations impose extra burden on
Mr. Empanada-
 Accredited Third-Party Certification- FSMA introduced this rule in November 2015, and
though this a voluntary program it is established for the accreditation of third-party
certification bodies which are also known as third-party auditors in terms of conducting
the food safety audits (FDA).
 Risk based preventive controls- Usually, facilities related to domestic and foreign food
need to be registered with section 415 of the Food, Drug, & Cosmetic Act. This section
imposes obligations on the organization to comply with the requirements related to the
risk-based preventive controls. All these controls are mandated by the FSMA and
modernized Current Good Manufacturing Practices (CGMPs) (FDA).

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Some other regulations are laws related to wages, quality of food, packaging of food, etc..
Packaging regulations related to the food are other factors which impose extra burdens on Mr.
Empanada and this regulation is introduced by the FDA in Food, Drug, and Cosmetic Act 1958.
This act introduces the basic regulations related to the food contact materials and other relevant
acts.
Economic factors
There are number of economic factors which directly affect this industry such as inflation rates,
unemployment rates, wages, prices, spending, etc.. Tampa experienced the average inflation of
2.44% each year, and this rate of change reflects the significant inflation. In other words, $20 in
Tampa (year 2000) would cost $30.13 in the year 2017 in terms of equal purchase. In
comparison of the overall inflation rate of the U.S. that is 2.10% during the similar period, it can
be said that inflation in Tampa was higher. Because of this high inflation, price of the ingredients
increased and this automatically enhances the price of the food products and leads to a decrease
in their margin of profit (Florida Inflation 2017).
Another economic factor which affects the business of this industry is the unemployment rates,
as people do not have as much money to spend on the restaurants. The unemployment rate in
Tampa was 3.7% in the year 2016-17 and 2.9% in the year 2017-18. Because of this, individuals
preferred ready-to-cook meals and packed foods in comparison to the food offered by restaurants
(BLS).
Another economic factor is tax rate, which directly affects the operations of Mr. Empanada.
Recently, bill has been passed which reduced the corporate tax rates from 35% to 21%, and this
affects the fast food industry in a similar manner like any other industries in the U.S. This bill is