An Analysis of the Competitive Landscape in the Fast Food Industry

This report provides a competitive analysis of the fast food sector, specifically focusing on the United Kingdom. It begins with an introduction to the industry and highlights the high level of competition, emphasizing tactics like discounting and creative distribution. The report applies Porter's Five Forces to analyze the industry, examining competition among competitors, bargaining power of buyers and suppliers, threats of new entrants, and availability of substitutes. It then defines the fast food sector and discusses its growth in the UK, noting the increasing number of outlets and the challenges posed by the trend towards healthy eating. The report also provides a market size and structure analysis, including the rapid increase in takeaway shops, revenue figures, employment opportunities, and the oligopolistic market structure dominated by major brands. Finally, the report references key sources like Chandon and Wansink (2011) and Kraak et al. (2011) to support its findings.

COMPETITIVE ANALYSIS OF FAST FOOD SECTOR
Fast Food refers to the eatables which can be prepared
and served in a rapid manner. The economy of United
Kingdom has experienced a sudden inclination in the
last 20 to 30 years. The incorporation of tools and
measures have ensured that the revenue generated by
this sector is tremendous. The United Kingdom is
termed as a largest consumer of fast food products. In
context of consumer market segment it covers
approximately 32% of the total. The growth in fast food
sector can be ascertained through changes in social and
hospitality sector of a nation. The major challenges
which are ascertained by this sector is the latest trend of
eating healthy food has carried an impact on the sales
revenue of this industry (Kraak and et. al., 2011).
However still there is no signs of it slowing down as
there are signs of significant inclination in number of
food outlets in the country.
The porter's theory identifies five factors which influences
the functioning of an industry (Rothaermel, 2015). Every
business operating in the fast food sectors aims to utilise
these factors in their own manner to achieve a superior
business position in the market.
 Competition among the competitors
 Bargaining power of buyers
 Bargaining power of suppliers
 Threats of new entrants
 Availability of substitutes
The level of competition in fast food sector is
relatively high. Therefore there are frequent
employment of tactics and discounting
measures to improve level of scale in this
business sector. The efforts on separating the
products from its rivals is continuous along
with employing creative distribution network.
Bargaining power of buyers: the bargaining
powers of consumers is very strong in the fast
food sector. Due to presence of variety of
caters consumers now demand better quality
products and experience at similar prices.
INTRODUCTION PORTER'S THEORY COMPETITORS

COMPETITIVE ANALYSIS OF FAST FOOD SECTOR
SUPPLIERS
The suppliers for the fast food sector are butchers, farmers
and packaging companies who influences price of
commodity in the direct manner. The presence of large
number of industries influences will automatically increases
bargaining power of suppliers in this business sector.
Threats of new entrants: The free and open nature of
economy of United Kingdom ensures that existing business
remain under the threat of new entrants. It is easier to install
a restaurant and fast food chain in the country when
compared with any other businesses.
Availability of substitutes: this context refers to the
products which exist outside the industry. The availability of
organic fruits and vegetables are the major substitutes which
can hinder the growth of this sector (Chandon and Wansink,
2011).
MARKET SIZE AND STRUCTURE
Market Size:
There is a rapid increase in takeaway shops in UK of around 4,000 stores in past three years. According
to the figures provided by Cambridge University, there are approx 56,638 fast food shops operating in
the country. The revenue for the last year recorded at $19 billion and attaining annual growth of 2.9%.
This sector provides employment opportunities to 369,191 people. The major brands in fast food sector
are Mcdonald's, Burger King, KFC and greggs.
Market structure:
The market structure of the fast food business sector is oligopolistic in nature. Which means there are
fewer number of organisation which determine the manner in which industry operates. The competition
is between large firms and smaller organisation does not get the same opportunities as bigger ones. They
possess the ability to exploit the information which is offered by customers. This market structure
ensures that they take home maximum profits and smaller food outlets struggle to sustain in the market.
REFERENCES
Chandon, P. and Wansink, B., 2011. Is food marketing
making us fat? A multi-disciplinary review.
Foundations and Trends® in Marketing. 5(3). pp.113-
196.
Kraak, V. I. and et. al., 2011. Industry progress to market a
healthful diet to American children and adolescents.
American journal of preventive medicine. 41(3). pp.322-