Albert Lee

Robert Hupcher

Dee (Da) Ham

Nicholas Lawrence

Zhengning Li

The Fast Food Industry

Industry Overview

Segmentation

The U.S. Market

Major Competitors

Buyer Power

Supplier Power

Market Entry

Looking Ahead

Trends, Regulations & Public Opinion

Summary: Industry SWOT

Genesis

Industry Overview

• QSR, Takeaways, Leisure, Street Vendors & Mobile

Industry Segments

• 200 billion• Market value growth 3%• Forecasted to increase by 19% by 2014

2009 Market Value

• 208 billion transactions• Market volume growth of 4% Market Volume

Segmentation

• Do not provide table service• McDonalds, Burger King, etc.

Quick Service Restaurants (QSR)

• Off premise consumption• Domino’s, other takeout restaurants

Takeaways

• Chicken & Rice

Mobile & Street Vendors

• Movie theaters, stadiums etc.

Leisure

70.90%

12.10%

11.20%

5.80%QSR

Takeways

Mobile & Street Vendors

Leisure Locations

Global Fast Food Market, 2009

The U.S. Market

Accounts for 31% of global fast food market

$70 billion market with minimal growth (0.2%)

• Market Volume growth of 6.3%

Market Volume of 40 billion transactions

Majority of fast food market is QSR

Market value forecasted to increase by 8.5% by 2014

Major Competitors

Major Competitors

2005 2006 2007 2008 2009 -

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

Leading Firms' Respective Revenue

Burger King Corporation

Domino's Pizza Inc.

McDonald's Corporation

Yum! Brands, Inc.

(In Million)

Major Competitors

2005 2006 2007 2008 20090.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Leading Firms' Respective Profit Margin

Burger King Corporation Domino's Pizza Inc.McDonald's Corporation Yum! Brands, Inc.

Buyer Power

Strengthened Buyer Power due to• High rivalry competition in industry

• Leads to competitive pricing strategies to secure consumers

• Low switching costs• High price elasticity

Buyer Power decreases with• Brand Awareness• Consumer loyalty

Supplier Power

Strengthened Supplier Power due to• Concentrated food wholesales• Minimum wage legislation• Low dependence on fast food players

• Various alternatives in terms of food service customers

Supplier Power decreases with• Lack of alternatives

Market EntryBarriers• Retaliation by existing players, e.g., price wars• Established brand strength of major chains• Major market saturation• Differentiation issues

Low costs of setup

International growth

Looking Ahead

2009 2010 2011 2012 2013 20140.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

0

50

100

150

200

250

300

Forecasted Fast Food International Industry Growth

Billion $% Growth

Trends, Regulations & Public Opinion

Government regulations

Extremely responsive to consumer tastesMcDonald’s Internationally Complementary goods

RecessionRecession-flexible industry

Eating healthy

Summary: SWOT Analysis

Strength Weakness Opportunity Threat

• Low capital requirements

• Constant demand

• Recession-flexibility

• Localization

• Saturated markets

• Conscientious eaters

• Increasing competition

• Healthy eating trends

•Niche markets

• Substitutes

•Government regulations