Fast food sector Essay Example | Topics and Well Written Essays - 3500 words

Fast food sector - Essay Example Having taken advantage of the economic growth, the organization has expanded phenomenally and has presence in virtually every country in the world (Orji, 2005). Their business model too is unique as their restaurants are owned and operated by local people in the country of presence. In mature and developed markets, however, they have company-owned restaurants. The key to McDonald's success is the use of franchising. McDonald's however, has reached the saturation point in their home market – the US – and hence started looking for overseas opportunities. The growth in the US has been slow but in the other markets it is leading. There still exists high potential in the developing countries but they need to realign their strategies. McDonald's wanted to create a multi brand corporation and hence invested in other brands such as Piles Cafe, Boston Market, Pret a Manager (Orji, 2005). They also had a majority stake in had a majority stake in Chiptole Mexican Grill and owned D onatos Pizza for several years. Their idea was to offer healthier options and compete with the fast casual sector. McDonald's has been reeling under difficult times as the global economy worsens. Consumer lifestyles, preferences and tastes have changed along with the changed business environment. It experienced declining sales as consumers and investors moved away from the brand. Globalization appears to have impacted the standards and operations at McDonald's (Cuneen, 2008). These require a change in the marketing strategy of McDonald's in the UK. An environmental analysis would help evaluate the right marketing strategy under the circumstances that should be applied in the UK. 1.2 Environmental analysis 1.2.1 PESTLE analysis This helps scan the external environment and is the acronym for Political/Economic/ Social/Technological/Legal/Environmental – all of which are external to the organization. Political Currently the UK is facing a period of instability as there is no sig nificant popular support (Social Equality Party, 2010). The country is more divided than ever before. Economic According to Keynote the fast food sector was valued at ?9.3bn in 2007 which shows the market has increased during recession (Riley, 2010). Economic factors such as prices and income have an impact on consumer behavior. As the food prices rise the purchasing power declines and the price changes affect the composition of the food basket in the UK (Knowledge Scotland, 2009). Socio-cultural factors More than half the adults are heavier than recommended and this is particularly rising among the young adults (EMIS & PIP 2005). Tasty food in the UK can be found at any location at any time of the day or night. Most foods are high in calories and dense in energy. Food portion sizes have increased and there is a tendency to eat more. Physical activity levels have gone down and are considered as the major cause of obesity in the recent years. However, there have been growing concerns of obesity in the UK and consumers have become health conscious. The UK has a high number of immigrants and good habits differ across cultures. Each culture and society has its own set patterns of behavior and food preferences and cultures are not pervasive. Globalization has been unable to penetrate these set patterns and converge the food habits. Technological factors Fast food brands are using technology to target kids via games, videos and cartoons on their websites. They thus exploit the legal