Analysis of Al Baik's Fast Food Industry using Porter's Five Forces

This report provides an industry analysis of Al Baik, a prominent fast-food restaurant in Saudi Arabia, using Porter's Five Forces framework. The analysis examines the threat of new entrants, the threat of substitutes, industry rivalry, the bargaining power of buyers, and the bargaining power of suppliers. The report highlights the competitive nature of the fast-food industry and the challenges Al Baik faces, including competition from other fast-food chains, the availability of substitutes like bakeries and restaurants, and the bargaining power of both buyers and suppliers. The conclusion summarizes the key findings and emphasizes the importance of understanding these forces for Al Baik's strategic decision-making. The report references relevant sources to support the analysis.

Running head: INDUSTRY ANALYSIS
Industry Analysis
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INDUSTRY ANALYSIS
Table of Contents
Introduction......................................................................................................................................3
Industry analysis using Porter’s five forces.....................................................................................3
Conclusion.......................................................................................................................................5
References........................................................................................................................................7

INDUSTRY ANALYSIS
Introduction
Al Baik is one of the biggest fast food restaurants in Saudi Arabia. It specializes in selling
of broasted chicken and shrimps with different types of sauces. The headquarter of Albaik is in
Jeddah where it has more than 40 branches. The company is further expanding itself in the
central region of Saudi Arabia. The founder of the company is Shakkour AbuGhazalah. The
company belongs to the fast food industry. Porter five forces will be appropriate for doing an
industry analysis for the organization (Albaik, 2017).
Industry analysis using Porter’s five forces
The five forces of porter help in understanding the industry and the various factors
affecting the organizations that fall in that particular industry. Porter five forces will be perfect
for studying the fast food industry and how does it affect Al Baik.

INDUSTRY ANALYSIS
Porter’s five forces: E. Dobbs, 2014
Threat of new entrants- Fast food industry is one such industry where new entrants
keep entering the market. New entrants increase the competition in the market. In case of fast
food industry the impact of new entrants very much, the consumers of the fast food industry like
to experiment in terms of the food they try. Hence, whenever a new fast food company enters the
market if their promotional activities are good, there is very high chance that it will attract many
customers, later if their service is better than the existing companies they can easily become a
market leader (Arline, 2015).
Threat of substitutes- The substitutes of Al baik are the bakeries, coffee shops,
restaurants that provide meals like lunch and dinner and other food processed food products. The

INDUSTRY ANALYSIS
substitutes of fast food industry attract many customers, it depends upon the taste, preference and
mood of the customers what they prefer to eat. This affects the business of Al baik. Some of the
substitutes of Al baik are, Saadeddin pastry, Lusin, Al Orjoun and Nozomi often affect the
business of Albaik, these companies though are not operating in the fast fast industry but it
affects the business.
Industry Rivalry- There are a number of companies that operate in the fast food
industry, these companies give a very tough competition to Albaik. Competitors come with
many new strategies so that they survive in the competition. The main competitors of Al baik
are Burger King, Hamdan 2, Elevation Burger, Pizza Inn are some of the competitors Al baik
fast food restaurant (ALFaris et al., 2015).
Bargaining power of buyers- Bargaining power of the buyers compels the companies to
provide discounts and various offers, this affects the business of Al baik because the fast food
restaurant in order to remain in the business needs to give certain discounts to make their
customers happy, they need to do this activities for promotion.
Bargaining power of suppliers- The suppliers who provide raw food materials for food
production often exercise their power of bargaining and offers materials at a higher price. They
use Halal chiken for preparing their broasted chicken. The Chickens is available from local
poultry farmers and are prepared at AQUAT Food Industries and then they are brought to Al
Baik (E.Dobbs, 2014).
Conclusion
Porters five forces framework can be used to do the industry analysis of the Al Baik, it
belongs to fast food industry which is a highly competitive industry as there are many

INDUSTRY ANALYSIS
competitors and close substitute of the product. The bargaining power of the customers often
puts the company at loss, since they have to gather the resources from various suppliers even the
suppliers bargain and provide food materials at their price which is in most case higher.

INDUSTRY ANALYSIS
References
ALBAIK. (2017). Albaik.com. Retrieved 26 September 2017, from http://www.albaik.com/en
ALFaris, N. A., Al-Tamimi, J. Z., Al-Jobair, M. O., & Al-Shwaiyat, N. M. (2015). Trends of fast
food consumption among adolescent and young adult Saudi girls living in Riyadh. Food
& nutrition research, 59(1), 26488.
Arline, K. (2015). Porter’s Five Forces: Analyzing the Competition. Retrieved October, 16,
2015.
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.