Sample Essay on Competitive Rivalry in Fast Food Industry

Competitive Rivalry in Fast Food Industry

The food industry has grown to become the best source of income and revenue. It has played great roles in the economic development on a global platform.  Fast-food or quick service restaurants have become the in-thing for many people and this has projected the growth of the industry. There are several fast food giants that have been holding up very well more than any other in the restaurant sector. These companies include McDonalds, Burger King, Taco Bell, Subway, Wendy’s international and Dairy Queen among others. The biggest challenge in the fast food industry has been immense competition.

Many entrepreneurs who have tried their luck in the industry have experienced a lot of challenges that have pushed many to withdraw their focus. Competitive rivalry has been one of the key challenges in the fast food industry as there are many companies competing for the same dollar and profits in the industry. Every fast food company wants to make fast money by selling large amounts of food at lower rates. Majority of these companies compare the profit margins although it is not as a high as many new investors in the industry may anticipate. Notoriety when it comes to paying wages is the other issues affecting the industry and most of the large companies capitalize on this issue.

For any entrepreneur trying his or her lack in the fast food industry conducting rivalry analysis has been one of the most effective strategies to count on. The Porter’s 5 forces has been the de facto context for analyzing the fast food sector. Competitive rivalry in the fast food sector has affected even the giant restaurants that have dominated the industry for many years. Rivalry among the existing companies has been heightened by increased service and products improvement, increased innovation in the sector, better advertising and tumbling pressure on prices.

Competition in the fast food industry as not only hit the restaurants styles, but also their widespread target markets. Every giant or green restaurant has been working hard to grasp a bigger market share. There are a number of factors that have intensified competitive rivalry in the industry and they include;

  • There is increased competition for same customers and product resources due to the large number of firms anticipating to dominate the market.
  • The industry has reached maturity stage and this has slowed it growth. many of the companies have been competing to gain a better market share and gain more profits.
  • High storage cost have pushed competition has every giant fast food provider want to gain more profits and spend less.
  • There has been high exits barriers and this has increased rivalry has most of the companies want to dominate the market for long.

Fast food companies need to work together and especially with franchises that are on new initiatives. They also have to adapt to new changes in the market and satisfy clients’ needs without any qualms. If they keep in mind that competitive rivalry results to pressure on prices and margins, they will be able to easily help the industry to overcome other rapidly developing and profitable industries.

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