BUSINESS STRATEGY THE CATERING SECTOR INTERNATIONAL HOSPITALITY MANAGEMENT Group 3. 30 th November 2001 BECKY DEADMAN, KATY EAGLE, LISA GALLAGHER, LAURA WALTON
Format of Presentation • General Catering Sector - specifically looking at Fast Food • What is Fast Food? • An analysis of the market and competition with analytical tools • Discuss external factors that affect the fast food sector • Consider stakeholders • Look into the future and forecast of the fast food market • Conclusion
FAST FOOD OTHER CATERING HOTEL CATERING THE CATERING SECTOR INDEPENDENT & CHAIN RESTAURANTS ROAD SIDE CATERING IN-STORE RESTAURNATS PUB CATERIING
6% 26% 17% 2% 5% 22%
General Eating Out Trends • The eating out sector has increased 32% between 1996 - 2001 • Higher Disposable Income • Demand for Value For Money
FAST FOOD • Food which is prepared and served quickly to customers on order • Food may be takeaway or eat on premises • In general Fast Food is collected from a counter, not table service • Relatively cheap food • Convenient
Fast Food Includes……. • Burger Bars e. g, Mc. Donalds and Burger King • Pizza Restaurants, Takeaway and Home Delivery Outlets • Pasta Chains e. g, Bella Pasta • Chicken Chains e. g, KFC • Fish and Chip Shops • Ethnic Takeaway • Other Fast Food e. g, Jacket Potatoes, Sausages, Vegetarian Specialists and filled croissants
Pizzas Burgers Fried Chicken Key Pasta Markets Sandwiches Ethnic Takeaway Jacket Potatoes Traditional Juice Bars Organic Specialities New emerging markets
Growth of Fast Food Market • Domination of eating out sector • Consumer spending doubled over the last 10 years
Market Structure • Large Scale • Characteristics • Key Features
Market Environment • Ease of Entry to Market • High Failure Rate • Competitive
Fast Food Customer Trends • Core Market - Young, Social & Affluent • Elderly & Cash Constrained • Family Market Regional Differences • Similar throughout the UK • North/ South divide • Reasons for differences
BOSTON CONSULTANCY GROUP MATRIX MARKET SHARE Low High Ethnic takeaways Sandwich shops Yo! Sushi GROWTH Mc. Donalds Burger King Low KFC Pizza Hut Wendys Wimpy Harry Ramsdens
PORTERS FIVE FORCES MODEL - FAST FOOD Potential entrants Ease of entry into market. Suppliers As a new company suppliers have the bargaining power over the companies. However if there ample suppliers then the companies are able to choose. Competition/ Rivalry New FF restaurants Existing FF restaurants serving different types of fast food. Substitutes Increased ‘pub’ restaurants which are good value for money. Retail food e. g. . Marks & Spencer's Buyers- Customers Have so much choice that they can now demand value for money and have bargaining power.
Factors Affecting the Catering Sector Political • The Governments reaction to Food Scares • The encouragement of healthy eating • Government encouragement for families to sit round the table • Government legislation on employment
Economical • High property and operating costs • Increase in taxation
Social • Increase in the young eating out • Lifestyle changes • Smaller fast food outlets have a reputation for poor hygiene
Technological • Drive through • Advertising and ordering on the internet • Improved cooking techniques and facilities
Environmental • Decrease in inbound tourism • Foot and Mouth disease • BSE crisis • September 11 th 2001 – Terrorist attacks
Stakeholders • Customers • Community • Competitors • Employees • Suppliers • Government • Owners & share holders • Financial lenders
The Future Forecast of the Eating out market 2001 - 2005 Source: Mintel Report - Eating Out Review. 18/06/2001
The Future • Fierce Competition • Keep prices down • Consumers demand better quality of food & service and value for money
The Future • Personal Disposable Income (PDI) • The socio-economic status of the population • The structure of the UK population • Families will still remain a very attractive market to target
The Future • New sales opportunities through the internet • A “gap” in the children’s vegetarian market • The concept of healthy fast food
Forecast • Pizza restaurants - key area: delivery • Chicken & Burger bars - the market appears to be saturated • Ethnic takeaway - Chinese & Indian remain popular but new competition from other ethnic cultures • Fish & Chips - remain an old favourite but new fish bars may start to compete
Conclusion • Easy to enter but hard to succeed • Highly competitive, diverse and large market • Growth markets are new ethnic takeaways • Move towards healthy eating such as sandwich shops • Positive outlook for the future
Thank-you for listening. Any Questions?
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