Food Industry Analysis: Globalization, Competition, and Strategies

This assignment delves into the multifaceted impacts of globalization on the food industry, exploring the concepts of homogenization and heterogenization. It uses McDonald's as a case study to illustrate how global brands adapt to local cultures. The assignment examines the strategies for starting a food business, emphasizing the importance of competitive analysis, product testing, regulatory compliance, cash flow forecasting, and mentorship. It also provides insights into the dynamics of the food industry, highlighting the need for unique selling points, market research, and financial planning. The assignment concludes by emphasizing the significance of adapting to local preferences and the challenges of navigating the global food market.

Running head: FOOD INDUSTRY
FOOD INDUSTRY
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Compulsary question A:
Homogenization and heterogenization are two aspects of globalization which had also impacted
the food industry. A large number of researchers are of the opinion that rising homogenization is
mainly resulting in extinction of cultural diversity. In simple terms, homogenization on a global
scale may be explained as the choice of the consumers of specific products from all over the
globe which may or may not align with their own culture, traditions and preferences (Heimen
and Lowengart 2014). This can be exemplified with the help of a case scenario. The food
industry of McDonalds had gained appreciation since the time of its first outlet in the year 1955
under the governance of Ray Kroc in Des Plaines, Illinois (near Chicago) in United States. The
food menu provided by the organization to consumers was based on their food preferences of the
local people as well as the fast food culture of US. However, with gradual increase of years, the
quality and taste of the food products of McDonalds was liked by people not only of the Western
decent but was also liked by people all over the world. The eastern countries also became a fan
of the food products of McDonalds (Misra and Surico 2014). Here it should be seen that
although they have different food choices and different cultural traditions in preparing their food,
but yet their liking for the McDonalds food product resulted the organization to set up stores in
eastern countries. The brand dominated the fast food culture of many cultures like India, china
and many others where people allowed the domination for the change of taste that brought
innovation for their taste buds. The dominance of McDonalds on a global scale comes under the
concept of global homogeneity which thereby means that even although, local cultures of food
exists, however a dominant culture of food irrespective of religion, economic and social status
dominated globally providing consumers with international products (Balogh et al. 2016).
Process of globalization has also led to the development of concept of the cultural heterogeneity.

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It is usually developed through the increased emphasis on the elements of the local culture as
well as also dependent on the religion tradition food, role of family as well as shared history. It
has been seen that the customers who can afford food form the global organization belong to
elite classes as the price of such food products can be afforded by such people only. Local people
residing in a specific cultural society will obviously settle for their staple food as they have less
money to afford international market. Therefore although the dominant culture of a particular
food brand may dominant the entire world but locally or regionally, restaurants which sell staple
food products will obviously gain attention due to the much lesser money or may be due to
personal food choices of the local people. Hence providing a mixed state of taste with both
international and local food is a good option. In such a scenario, when a restaurant incorporates a
particular global culture within their preserved local or regional culture, it may lead to cultural
heterozenization (Yue, Zhao and Kuzma 2015). This can be explained by an example. Often as
Indians are lovers of spice and different sweet, sour and hot sauces in their food, McDonalds in
the Indian sector are introducing products like ‘Mc aloo tikki’, using pudina sauce in their
burgers and many others. Many western restaurants are also using Indian spices in their culinary
items so that they can attract the Indian citizens of the locality in that part of the western country.
This leads to cultural heterozenisation.
Question B 3:
While staring a food business, certain important considerations are to be kept in mind.
 The first point that should be taken into consideration is to make proper strategies to
properly fight the competition and come out victorious with the correct amount of
profitability. As there is large number of restaurants of various kinds in every locality of

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different nations, every new entrant should have unique selling points which will make it
stand out from the rest of the competitors resulting in higher success (Mullins 2013).
 The second requirement would be to test the products before releasing them to a large
scale. Every new entrant should start with the salebility of the product on a small scale to
the local community or the market before making major investments like signing a lease
or buying major equipments. The initial customers would mainly serve as the test markets
which will mainly act as the proof of connect during the business planning stage (Heinz
2013).
 The new entrants should make sure that as they are establishing a new food center, they
must comply with all regulations so that they did not get entangled in different legal
obligations. At first they should know that what specific regulation are applying on them
and following that they should take proper measurements. This is necessary so that no
obligations harm the reputation of the company before it been starts to see the face of
profit.
 Creating a proper as well as realistic cash flow forecast is extremely important for
starring with the food business. This is because in food business, it relatively takes a
longer time to generate revenue and therefore a person coming into the business requires
good amount of funds. Therefore, every individual should have a planned amount of
budget in hands before setting with the flow (Collis and Hussey 2013).
 A new entrant should try and find out a stalwart in the food industry as a guide. Often
valuable insight is very much necessary during starting and running of the business so
that they can potentially save form huge loss of money due to making of costly mistakes.
Even if the investors do not enter into a mentoring program, they can still take the help of

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advisors (Grimm, Hoffster and Sarkis 2014). These may include people within the same
industry or professionals like accountant or lawyer. Moreover, the new entrant may also
enter into the business after attending networking events which also help in meeting the
relevant contacts in the community.

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References:
Balogh, P., Békési, D., Gorton, M., Popp, J. and Lengyel, P., 2016. Consumer willingness to pay
for traditional food products. Food Policy, 61, pp.176-184.
Collis, J. and Hussey, R., 2013. Business research: A practical guide for undergraduate and
postgraduate students. Palgrave macmillan.
Grimm, J.H., Hofstetter, J.S. and Sarkis, J., 2014. Critical factors for sub-supplier management:
A sustainable food supply chains perspective. International Journal of Production
Economics, 152, pp.159-173.
Heiman, A. and Lowengart, O., 2014. Calorie information effects on consumers' food choices:
Sources of observed gender heterogeneity. Journal of Business Research, 67(5), pp.964-973.
Heinz, H.J., 2013. Principles and practices for the safe processing of foods. Elsevier.
Misra, K. and Surico, P., 2014. Consumption, income changes, and heterogeneity: Evidence
from two fiscal stimulus programs. American Economic Journal: Macroeconomics, 6(4), pp.84-
106.
Mullins, J., 2013. The New Business Road Test: What entrepreneurs and executives should do
before launching a lean start-up. Pearson UK.
Yue, C., Zhao, S. and Kuzma, J., 2015. Heterogeneous Consumer Preferences for
Nanotechnology and Genetic‐modification Technology in Food Products. Journal of
Agricultural Economics, 66(2), pp.308-328.

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