Business Studies Assignment on Competition among Fast Food Companies

Competition among Fast Food Companies

Fast food restaurants are characterized by their fast food and minimized table service. The restaurants always try to have a unique value propositions that helps them win an edge over their competitors. The list of most closely and competing fast food restaurants are; Starbucks, McDonalds and Dunkin’ Donuts. These three fast food restaurants compete among each other for common customers using different value prepositions. Starbucks is well known for its excellent customer service, friendly environment, high quality products and free internet services. This allows customers interact well as they take their coffee in the stores (Carrigan, & De Pelsmacker, 2009).This has helped it compete effectively in the industry. Starbucks stores are company owned hence maintaining consistency in its operations all over the world (Chiang, & Chathoth, 2013).

McDonald’s restaurants offer a wide range of products which is contrary to Starbucks. This helps it diversify risks in case of one product or service fails, due to economic forces that cannot be countered. The restraints also offers coffee at a low price compared to high priced Starbucks. This enables it to win a high number of customers. Through franchising, the company is in a position to establish new target host countries at a low cost. Franchising also helps the company managements and shareholders share the risks and rewards (Thompson, Strickland, Gamble, & Zeng’an, 2008). McDonalds invests highly in advertising for its products which is contrary to its competitor Starbucks. Dunkin’ Donuts like McDonalds wins in competition due to its low priced products. It is known to serve high number of low income earners. It serves markets in rural areas which are not cost advantageous necessary for Starbucks to penetrate into. Dunkin’ Donuts also diversifies its products hence minimizing product failure risks.

 

References

Carrigan, M., & De Pelsmacker, P. (2009). Will ethical consumers sustain their values in the global credit crunch?. International Marketing Review26(6), 674-687.

Chiang, J., & Chathoth, P. K. (2013). International Expansion Strategy of Foodservice Firms: An Exploratory Study. Journal of Hospitality Marketing & Management22(2), 204-228.

Thompson, A. A., Strickland, A. J., Gamble, J. E., & Zeng’an Gao. (2008).Crafting and executing strategy: The quest for competitive advantage: Concepts and cases. McGraw-Hill/Irwin.