fast-foodrestaurantindustryanalysis.ppt

Fast-Food Restaurant Industry Analysis Management 182 Lindsey Hicks Joshua Price Eva Ho Suren Divanyan May 16, 2002 Fast-Food Restaurant Industry Dominant Economic Characteristics Competition Analysis Driving Forces Competitive Position of Major Companies Competitor Analysis Key Success Factors Industry Prospects and Overall Attractiveness Dominant Economic Characteristics Dominant Economic Characteristics Market Size (2002) Projected Sales ($Billion ) 407.8 Sales increase of 3.9 % Locations: 858,000 industry employs 11.6 million people Revenues ($billion) 131.7 Dominant Economic Characteristics Scope of Competitive rivalry International : Most companies of the industry operate stores in many countries and compete with each other in specific country markets. Dominant Economic Characteristics Market Growth Rate McDonalds: Revenue 2.1 %, Earnings Per Share $1.47, Operating Income 4% Burger King: Revenue (1)%, Earnings Per Share N/A Operating Income N/A Taco Bell: Revenue 6%, Earnings Per Share 41%, Operating Income 25% Dominant Economic Characteristics Stage in life cycle: Mature Growth opportunity still exists in new countries and markets Diversification into related businesses attractive for sustained growth Introduction of new line of products and services to differentiate from rivals is practiced Dominant Economic Characteristics Companies in Industry There are 8 main companies that captures 89% of fast-food Market McDonalds 34.7 % Burger King 15.8% Taco Bell 9.6% Wendys International 9.5% Subway 5.9% Hardees 4.6% Arbys 3.9% Dairy Queen 3.8% Other 11.7% Dominant Economic Characteristics Ease of Entry Globally: Relatively hard to enter, because of strong competition and high capital requirements: In order to franchise the entrepreneur should be at least $1 million worth Efficient operations is the key to faster product delivery and lower costs Requires diverse supply materials, which complicates entry Customers are price sensitive and promot