The fast-food industry is changing everyday. There are new products being introduced in the market and new slogans being created. The companies in the fast-food industry will do their best to make the greater burger, and to make bigger and better fries.
Founded in 1953, Sonic has become the largest drive-in chain in the nation. Sonic was founded by Troy Smith, Jr. in Shawnee, Oklahoma. His dream was to own his own business. Sonic Drive-In keeps the 1950s alive through its chain of drive-in restaurants, each complete with speaker-based ordering systems and carhop servers - some on roller skates. Sonics top competitors are McDonald’s, Burger King, and Wendy’s. McDonald’s is the leading competitor in the fast-food industry. McDonald’s has the most restaurants with 12,380 locations and has over 364,000 employees. Burger King has 11,350 outlets in 57 countries and territories worldwide. About 75% is located in the United States. Wendy’s is the third largest quick-service hamburger restaurant chain in the world, with more than 6,600 restaurants in North America and international markets.
In Exhibit 1, this states the Porters Five Forces Model of Competition of The Restaurant Industry. Threat of new entrants: Because the profit margins are so small, cost is low and anyone can enter into the quick-service restaurant business. Bargaining Power of Buyers: The National Restaurant Association showed that three out of ten customers agreed that food that was prepared at a restaurant or a fast-food restaurant were an important factor in their everyday lives. The survey also stated that “three out of five customers plan to eat on the premises of quick-service restaurants and seven out of ten said that plan to eat takeout or delivery. (Hitt, Ireland, & Hoskisson, pg. 367)
Customers buy when they feel it is necessary giving them the upper hand on the industry. Bargaining power of suppliers: In the quick- service restaurant, the suppliers vary. They really do not rely distributors as large restaurants do. Threat of new substitutes: The restaurant industry is segmented into many parts: full service restaurants ($120 billion); quick- service restaurants ($110 billion); away-from-home managed institutions, examples: food services for schools and hospitals ($21 billion); and other food industries ($106 billion). (Marshall Jones, 1999). Rivalry among competi...
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...que product differentiation but find ways to reduce cost to stay ahead. There is not a perfect solution in the industry. No one can predict the economic because it is always changing. Sonics specialty menu has allowed the chain to differentiate. Through its increased marketing efforts, Sonic will gain brand recognition and increase its customer base.
Works Cited
• Hitt, Michael A; Hokisson, Robert E.; Ireland, RD. Strategic Management. 6th Ed., Masson, Ohio: Souht. Wester 2005.
• “Burger King.” Burger King Corporation. http://www.bk.com/
• “Answer.Com.” Burger King Corporation. http://www.answers .com/burger%20
• “McDonald’s.” McDonald’s Corporation. http://www.McDonalds.com/
• “Answer.Com.”McDonald's Corporation. http://www.answers.com/topic/mcdonalds-s
• “Marshall Jones& Co.” Restaurants. http://marshalljones.com/new_page_30.htm
• “Restaurant Business.” Sonic Says Payment Stalls Boosted Gains. http://www.restaurantbiz.com/restaurantbusiness/headlines/articles_display.jsp?vnu_content_id=1000853253
• “Wendy’s Restaurant.” Wendy’s International. http://www.wendy’s.com/
• “Yahoo!” Yahoo. Yahoo! Finance. http://finance.yahoo.com/?u
The fast food restaurant industry, which includes quick-service and fast-casual restaurants, is highly segmented with the top 50 companies accounting for only 25% of the industry’s sales. The $120 billion industry includes over 200,000 restaurants with 50% of those specializing in hamburger entrees. (hoovers.com 2008) The major competitors in the industry include McDonald’s, Burger King, Taco Bell, Subway, and KFC – Chick-fil-A’s major competitor in chicken sales. Chick-fil-A’s unique position in the market, specializing in chicken-based entrées, has lead to a competitive advantage which the company has been able to capitalize on. Recently, many competitors have added chicken entrees in order to compete in the market segment. Through marketing strategies and company initiatives, Chick-fil-A has tried to stay distant from competitors, offering a fresh alternative to the ordinary fast food restaurant.
Wheelen, Thomas L. and J. David Hunger. Strategic Management and Business Policy, 13th Ed. Upper Saddle River, NJ: Pearson Education, Inc., 2012. Print.
Pearce II, J. A., & Robinson, R. B. (2011). Strategic Management 12th Ed. New York: McGraw-Hill/Irwin.
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As a company, McDonald’s was first introduced in Des Plaines, Illinois in 1955. This was the very first McDonald’s restaurant, which all started in San Bernardino, California in 1954 when Ray Kroc approached the McDonald brothers with a business proposition to start a new company. In 1965 McDonald’s went public and was later, in 1985 added to the Dow Jones Industrial Average. (www.mcdonalds.com) The company has gone through quite a few changes with its changing CEO’s over the years, but the company seems to be on track with CEO Jim Skinner, named in 2004. Skinner was named the new CEO just in time to clean up after McDonald’s first ever quarterly loss. He succeeded by showing that McDonald’s revenue had climbed 11% during 2006 and net profits had climbed 36%. (Dess, Case 40 Pg. 1)
The fast food industry was introduced to America in 1921, when White Castle was founded. They reinvented the burger, and made cheap, convenient food, which caught the attention of Americans. Thirty years later, McDonald’s was introduced and many more fast food chains followed. The industry has been booming ever since. There are over 200,000 fast food restaurant locations in the United States. “According to the National Restaurant Association, American sales of fast food totaled $163.5 billion in 2005” (Wilson). The fast food industry’s total earnings are moving at a fast rate. Statistics show that the earnings are drastically increasing each year. According to Statista.com, “By 2018, this figure [industry earnings] was forecasted to exceed 210 billion” ("Topic: Fast Food Industry").
People today are busier than they have ever been; household adults have at least one job just to make ends meet. The overall dynamic of the house has changed immensely since the 1920’s when fast food was first introduced to the American society, and even though the United States is still in a down economy, one thing remains the same, fast food restaurants. Even though most people know that fast food contributes to health problems, it still remains a part of the American life. There are more options than ever before, and while the big name restaurants are slowing down and sometimes fading out, fast food restaurants keep their doors open and even open new ones. The fast food industry is steadily growing through their affordability, convenience, and most of all their food.
Burger King is an American fast food chain that was founded in nineteen fifty-three as instaBurger King. It was originally founded by Keith J. Kramer and Matthew Burns. After running into some financial problems along the way InstaBurger was no more. In nineteen Fifty-Four David Edgerton and James McLamore purchased the company and renamed it “Burger King”. Over the next couple of years ownerships were changed a couple of times to make sure the company was running at its absolute best. Its headquarters are currently located at 5505 Blue Lagoon Drive, Miami-Dade county, Florida, United States. The nineteen seventies were considered the best time for Burger Kings advertising, using short commercials displaying their food that just looked to eat
When society thinks about the local McDonald’s, they probably do not think “innovation’. That is because everyone has become accustomed to the many novelties that McDonald’s has introduced over the years. Some people do not even know that McDonalds was the leader in innovation being the first major international fast food restaurant, with the first drive-through window. What many people do not realize is that McDonald’s continues to drive innovation in fast food. Some times the innovation is well advertised, but other times they are designed so that customers will never even notice (Ritzer, 2004).
...rget market Sonic could devote its energy into is the "health freaks" niche. There are those who pursue healthy lifestyles yet have a hard time finding fast food when they are in a hurry. Since Sonic has a reputation for serving unique items, they would have an easier time selling more healthy food products. McDonald's and Burger King have had a difficult time focusing on their niche since they have had a history of being a "greasy burger and fries" joint. This could give Sonic a competitive advantage to take on those industry giants. Sonic is a significant competitor in its core markets, and it beats national chains on service measures such as customer satisfaction and loyalty. With these strategic implementations, Sonic has the potential to put down competitors such as McDonald's because the market is always changing and one company cannot remain number one forever.
· another segment of the fast-food industry is comprised of a non-hamburger restaurants, growing trend is moving customers to non-burger sandwiches
Witcher, B., and Chau, S. V., 2010. Strategic Management: Principles and Practice. Cengage Learning EMEA.
McDonald’s restaurant was founded by two brothers, Richard and Maurice (Dick and Mac) McDonald, in 1940. They initially opened the restaurant under the name McDonald’s Barbeque which was located in San Bernardino, California. The McDonald brothers had a vision of a drive-in restaurant that focused on quality food and good service. They served a simple menu consisting of 20-25, mainly barbeque, items. In 1948 after eight years of operations the McDonald 's brothers discovered that the majority of their revenue was coming from hamburgers. With this in mind, they decided to change the menu and set their focus mainly on hamburgers. They also changed the name of the restaurant to simply “McDonald’s” and adopted an assembly line approach in the production process. After continued
Fierce and growing competition – big fast food companies like Burger King and Kentucky Fried Chicken are constantly competing with McDonalds for customers and trying to take the spot as the top fast food chain.
The restaurant industry has become quite competitive in recent times. In an effort to cut costs restaurants are taking serious measures to improve their performance in relation to their competitors. Two of the most important steps that restaurants have undertaken in recent years are: