Monday, January 27, 2020

The UK Fast Food Market

The UK Fast Food Market UK is the country which has the highest fast-food consumption in the world. The country is known for having different cultures and a different cultural taste has a large impact on the global success of the fast food industry at national level. The UK fast food market grew by 5.2% to reach a value of $2.2 billion in 2008 (Datamonitor August 2009) The main players in the fast food industry: Sandwiches: Greggs, Subway and Thurstens Burgers: McDonalds and Burger King Chicken: KFC Pizza: Pizza Hut Dominos Pizza Fish and Chips Indian and Chinese Takeaway The external environment of the fast food industry can be properly analysed by applying PESTEL. It is a tool which helps in analysing the Political, Economic, Social and Technological environment of an industry. PESTEL analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. (Kotler 1998) PESTEL Analysis of the UK fast food industry: (P)olitical: The labelling of GM (Genetically Modified) food became important since April 2004 as new rules relating to GM labelling came into force. The motive behind GM labelling is to inform the customers if any ingredients in the food are genetically modified as it is the customers right to take a decision whether or not to buy such a product. The UK government is bringing strict regulations for the food sellers to inform the customers if the food items contain genetically modified ingredients. The political surrounding can be strongly affected marketers decisions. There has been increased regulation of business in recent times. The fast-food market was highly affected by the introduction of (GST) Goods Service Tax which resulted in the changes of prices in fast food outlets while the prices of other food items remained unchanged. Therefore, the fast food industry gives more emphasis on service rather than product stating that the customer will not get such type of service in their homes to differentiate them. (E)conomic The cost for setting-up a fast food joint or an outlet is very low. Therefore it becomes comparatively easy to enter the market. Franchising is an added beneficial factor and helps in setting up a good brand image. The market is growing as ever and a growing market is very important for the fast food industry. At the time of recession, the fast food restaurants do better business than other expensive restaurants as the price factor becomes important at such times. People tend to cut-down their expenses as their disposable income is less. (S)ocial The fast food industry in the UK pays a close attention to the requirements of the UK society. The people in UK have busy lifestyles and the fact that fast food restaurants are known for a quick and convenient service, they have become a part of the fast paced UK lifestyle. The people are a becoming more health conscious and have started adopting healthy eating as obesity is a known problem in UK. The fast food restaurants are known for serving foods which are high on calories. (T)echnological The fast food industry is a growing industry and technology has played an important role for the ongoing success. They have to keep up with the fast pace of changing technology to keep themselves in competition. A recent example to this is McDonalds installing Electronic Funds Transfer at Point of Sale (EFTPOS) which is accepting debit or credit cards from customers at the time of their purchase. Online marketing for kids such as games, promotions of new products and offers on the website. Computerised order-taking and billing systems (till system). The recent improvements in technology especially in the fast food industry have been due to increased regulation. The increased regulation on health has resulted in the standards of safety to be stricter. This means that the customers have no doubt about the quality and service and they know that it is of the finest possible standard and so they can enjoy the product. (E)nvironmental Fast food outlets like KFC, McDonalds and Burger King are majorly known for the production and consumption of food derived from animals. Proper measures have to be taken to consider animal rights campaigns as there have been many campaigns relating to mistreatment of animals in slaughter houses. Prices of resources like oil and coal are on a rise and therefore the prices of fast food products are likely to increase as the cost of transportation increases. An environmentally friendly company has a good image in the minds of consumers. The packaging in McDonalds was changed to paper in 1991 from polystyrene boxes as the consumers demanded for a more environmentally friendly packaging. This has a good effect on the minds of the consumers that the food they are eating does not affect the environment. (L)egal The fast food industry has to adopt proper Health and Safety guidelines as they are associated with food. Such political factors are of great importance to the fast food industry as it can affect the industry to a great extent. Food standard agency is an agency which is responsible for the health of public in relation to food in the UK. It is important for the fast food industry to follow the regulations imposed by the FSA (Food Standard Agency) in the interest of public health. Porters Five forces model is designed to analyse the structure of the industry. Porters 5 Forces Analysis of UK Fast Food Market Buyer Power The fact that not everyone enjoys fast food has resulted in the weakening of buyer power in fast food industry but it is highly popular with maximum UK consumers. Brakes and 3663 are the leading suppliers/distributers in the UK which has concentrated the food service supply market. The fast food companies offer different range of foods and keep them differentiated from others. Major companies invest heavily in brand building with the help of advertising and keeping a unique and uniform visual style of their restaurants. Hence, buyer power is weakened and consumer loyalty is strengthened. Consumer loyalty is increased by some companies by rewards programs, competition and giving free gifts for example McDonalds offer a free toy in Happy Meals. The buyer power is however strengthened to an extent by insignificant costs of switching and a quantity of price sensitivity. Therefore buyer power is not high or low, it is moderate. (Datamonitor August 2009) Supplier Power One important input in the fast food market is food. UK has a concentrated food supply market with Brakes and 3663 as the leading suppliers or distributors. The suppliers have decreased their dependence on the fast food companies as they have other kinds of profit foodservice and cost foodservice customers. It is important for the fast food companies to maintain their suppliers who offer marketable quality food which is at a low cost. Therefore, the supplier power is increased in the UK market. Labour plays an important part in the fast food business and the laws in UK like the minimum wage law strengthens the employees who are considered as the suppliers of labour. This indicates that the supplier power is high and strong. (Datamonitor August 2009) Threat of new entrants The rules and regulations in the UK have certain barriers to entry. There may be some limitations implied by the local authority on the number of restaurants of a particular type, but this type of barrier is limited to an extent. It is difficult for a new entrant in the industry to gain profits and do well in the initial stage as there is low consumer loyalty and some barriers to gain entry in the fast food industry. There may be problems on getting into prime locations and places which are busy like high streets. Some fast food chains get into a location by buying or signing leases just to prevent a rival getting into that location. The cost of setting up a new chain is relatively low and recent years have seen many new entrants in the market. The ease of entering a market and expanding has been demonstrated by chains like Subway. Thus this can prove to be a serious threat which is more serious to smaller chains that have the benefit of wide market support. Therefore, the likelihood of new entrants is high. (Datamonitor August 2009) Threat of substitutes The fast food substitutes include other forms of food service and retails like ready-to-eat meals, frozen foods etc for home cooking. As fast food is cheaper than any other form of food service, substitutes do not challenge the price of fast food and the main purpose of fast food does not comply with substitutes as the convenience factor in fast food goes missing. Fast food has faced many forms of criticism of being unhealthy while retail food promises to consumers of being healthy. Substitutes also offer a wide range of products. Therefore substitutes pose a moderate threat to the fast food industry. (Datamonitor August 2009) Rivalry of existing customers There is a huge competition in the fast food industry in which McDonalds in the leading fast food which serves more than 2.5 million customers on a daily basis company in the industry (McDonalds 2008). Other competitors in the market include Burger King, KFC and Subway. There are other small independent fish and chip outlets, burger shops and kebab corners which include in the competition. The dominant firms control a larger share of the fast food industry and they are able to hold this share due to the high amount of marketing done by them. Ready-prepared sandwich market is the most popular fast food which accounts of 1/3rd of the food market. It is followed by the burger which is dominated by McDonalds and Burger King. The fish and chip sector comes next which is made of independent shops and has a market share which is half to that of the burger. The location of the fast food restaurant acts as an important key in the rivalry of the food industry. Therefore, threat of existing customers is high in the fast food industry. (Datamonitor August 2009) Swot analysis is a tool for auditing and analysing the environment of a company. It stands for strengths, weakness, opportunity and threats. SWOT analysis of McDonalds (S)trengths McDonalds is been in business since 1955 and has built up huge brand equity. It is the number one fast food company in UK in terms of food service sales with 12% share of the total sector in 2008. (Euromonitor International 2008). It has 31000 restaurants across the world which serves fries and burgers in nearly 120 countries. It retains its customers through continuous innovation and product development. It also provides a clean environment for customers. Due to its wide reach across the world, it gives McDonalds to handle economic fluctuations which can arise in a country. It can operate effectively even at times of recessions as there a social need among the people to get comparatively cheap and good quality food. Their global restaurants are adapted to meet the requirements of different cultures. For example, lamb burgers are served in India and they have separate entrances for families and single women in the Middle East. Large scale investment has carried to support the franchise network of McDonalds. Approximately 85% of restaurants worldwide are owned and operated by franchisees. In 1997, it was named Entrepreneurs number one franchise. Food safety is taken very seriously in McDonalds and there are around 2000 checks performed on every stage of food preparation It has a loyal staff and a strong management team. It provides professional training for its employees. More than 250,000 employees graduate from the Hamburger university which is a McDonalds training facility. (W)eaknesses McDonalds could not compete with the fast food pizza chain as it failed to test market pizza as a substantial product. More money spent on training due to employee turnover. The customers are becoming more health conscious which has been reflected in the sales in McDonalds to an extent as burgers and fries are known to be high on calories. (O)pportunities In this health conscious society, a need for low calorie food has arisen. Introduction of low calorie foods like low calorie burger and fries cooked in low calorie oil can be a great opportunity. Some McDonalds outlets have a playground for kids which are an attraction for kids. More outlets should have such playgrounds to attract families with kids. A dining-out market is a recent hit among the young generation and the middle age group. This can be seen as an opportunity for McDonalds in attracting more young and middle aged group by having restaurants which have a dine-out section. With the upcoming Olympics in 2012 and the FIFA World Cup in South Africa is a great opportunity and is predicted to have a positive impact on McDonalds as it is a principle sponsor of both football and Olympics. Enter the coffee selling market and compete with coffee shops like Costa and Starbucks by opening McCafe which is especially dedicated in selling coffee and having Wi-Fi internet to attract coffee shop goers. Also, get into the sandwich making segment which McDonalds is left out of. Provide optional food for people with allergies like nut free and gluten free. Expanding more into the emerging markets of India and China. (T)hreats Consumers adopting healthier lifestyles and nutrition can prove as a threat as McDonalds is known for serving food which is high on calories. McDonalds has been criticized by parents for spoiling their children as young as one year olds by their marketing tactics which include happy meals with toys and popular movie tie-ups. Threats from local competitors like Burger King, KFC, Subway and other individual burger outlets. Recession may reduce the sales in McDonalds to an extent as the spending among people is reduced due to less disposable income. Threats from contamination of the food like e-coli which was recent in the UK. Sources (Hoovers (2008), http://www.hoovers.com/mcdonalds/-ID__10974-/freeuk-co-factsheet.xhtml [2] McDonalds Annual Report (2008) [3] http://www.dlea.com.au/?Community/Health_and_Nutrition/Health_and_Nutrition [4] Jobber, (2006), Principles and Practices of Marketing, 3rd Edition)

Sunday, January 19, 2020

‘Popular’ Music

‘Popular music' is the broadest and as the name would suggest most popular genre of music today. The term ‘Popular Music' was first used in the 19th century but it is the twentieth century that has seen the most developments in popular music. , the technology it uses and the media it is conveyed in The start of ‘Pop Music' is generally thought to have been in the 1950's with the advent of Rock ‘n' Roll. This is when music was first really brought to a mass audience watching on television. By the end of the 1950's over half the population owned a television. Millions more than at the start of the decade. Popular bands were made ‘popular' because they were being brought to the masses. The 1960's saw a broadening in ‘popular music' with TV shows such as ‘Top of The Pops' showing a selection of hits from the top 40 of the singles chart. This use of the media brought most styles of music that were popular to a mass audience. Later in the 1970's and 80's pop magazines were introduced. Some such as ‘Smash Hits! were aimed at the younger early teen end of the market while others such as ‘NME' or ‘New Musical Express' were aimed at older more refined music fans to popular music. The late 1980's saw a flurry of new popular music magazines, many of which are still popular today, rock magazine ‘Kerrang! ‘ being a leading example. I believe that the 1990's has seen a ‘dumbing-down' of some magazines such as ‘Smash Hits! à ¢â‚¬Ëœ. Now aimed at an even younger possibly pre-teen audience it is little more than a promotional vehicle for the groups and artists represented in it's pages. The featured groups in these magazines are often from a new sub-genre that has developed from the 1980's to now and is known as the manufactured band. In recent years the idea of manufactured bands or artists has been embraced into the reality TV format with shows such as ‘Pop Idol' showing the development of a band or artist live on TV. I believe this innovation has been bad for music in general as the top 40 chart is now flooded with either reality TV winners, reality TV losers or artists who have gone through a similar process but have not been televised in doing so. In recent years music television has risen to the fore as a major part of an artist's success. When MTV was launched in the early 80's who could have thought that the music video would become the phenomenon it now is. Artists spend millions of pounds and hundreds of hours making sure their video is just right. In the early 21st century there are now over 20 music channels showing every thing from rock to rap, from classical to teen pop. However nowadays all artist's videos are so good that the music video seems to have gone full circle and now the music is more important again. In the pop music industry there have been thousands of innovations over the years but no genre has surpassed the sub genre of rap for innovative ideas. Originating from street corners where young black males would ‘battle' against each other using lyrics rap is now a multi-billion pound industry with the leading players earning vast fortunes. Rap has certainly come a long way since it's humble beginnings. The 1980's were a massive decade of innovation for rap, a genre that had begun in the 70's. the start of the 80's rappers were still using manual mixers to combine beats and mix tracks in the way that has become a hallmark of rap. By 1990 rappers were using digital mixers to blend beats more harmoniously. The result a more clear-cut sound that has perhaps made rap the music of the 90's. Pop music has come a long way since it begun in the 1950's. Technology and the media have perhaps had as larger part in pop music's success than the music itself. However I believe the media ha s become too involved nowadays by creating stars themselves while not playing other artist's music. After all ‘popular music' should be about the music not making things popular. However there is one dark cloud that looms over the organisations that run the music industry such as record labels and the media. The Internet. Technology has now come so far that music files can now be swapped over the Internet through such software such as ‘Napster' or ‘Kazaa'. Now when a teenager hears a song he or she likes on the radio they don't rush to the record store. They rush to their computer. It is not just teenagers either. Millions of adults indulge in this type of music piracy every day. Even though they are ripping off the very artists they love. I believe however that the problem is not with the designers of ‘Kazaa' or with the people who are downloading it. After all millions of people use these services, law abiding ordinary people. The reason for this I believe is because people see record companies as big faceless corporations who don't really care about music or people, just making money. I think it is the music companies responsibility to stop people using these ways of obtaining music by making ‘popular music' mor about music and less about money.

Saturday, January 11, 2020

The Rivalry Among Existing Firms: Strong

The Rivalry among existing firms: strong The office supply industry has a large number of players with a high diversity of rivals. Competition is very furies between them because the office supply industry is so divers in product and services they provide; they include high volume office supply, warehouse clubs, online retailers, copy and print businesses, discount retailers and local and regional contract stationers. The large number of competitors in this industry, along with a lack of product differences, with low switching coast for buyers and the ability of the buyers to shop around the internet for the best price.Had made this industry growth to become very slow. source http://360. datamonitor. com/Product? pid=4CA55D31-18F9-44E1-BB86-D1E5E5306887 Rivalry Figure 9: Drivers of degree of rivalry in the office services & supplies market in the United States, 2010 Players range in size and product diversity; they include high-volume office supply providers (e. g. Staples), warehous e clubs (e. g. Costco), copy and print businesses (e. g. FedEx Office), online retailers (e. g. Amazon. com), ink cartridge specialty stores, discount retailers, as well as several local and regional contract stationers. Related article: Evaluate External Corporate CommunicationsThe large number of players, along with low-cost switching for buyers, low product differentiation, easy expansion by utilizing the internet, and poor market growth in recent years, intensifies rivalry amongst incumbents. This is ameliorated somewhat by the diversity displayed in the product portfolio of some players, such as online retailers and discount retailers, who operate in other markets and are therefore not solely reliant on the revenues generated from the office services and supplies market.Relatively low storage costs and the non-specificity of players’ assets lowers barriers to exit and eases rivalry. Overall, rivalry is strong. FIVE FORCES ANALYSIS The office services & supplies market will be analyzed taking retailers of paper, storage, stationary, and office services, such as photocopying, printing and binding as players. The key buyers will be taken as businesses, and manufacturers of paper, storage, st ationary, and equipment for photocopying, printing and binding as the key suppliers. SummaryFigure 4: Forces driving competition in the office services & supplies market in the United States, 2010 The market is highly fragmented with players ranging from multinational high-volume office supply providers to local stationers. The abundance and diversity of buyers weakens buyer power, whilst low-cost switching, low product differentiation, and high price sensitivity strengthen it. Such factors, along with low brand loyalty and easy access to suppliers and distribution, also contribute to the high likelihood of new entrants.Suppliers are numerous, and low differentiation, along with some backwards integration by players who sell their own branded goods, weakens supplier power. The large number of players, along with low-cost switching for buyers, low product differentiation, easy expansion by utilizing the internet, and poor market growth in recent years, intensifies rivalry amongst inc umbents. Buyer power Figure 5: Drivers of buyer power in the office services & supplies market in the United States, 2010 Buyers are numerous and diverse.This, along with the importance of the products and services provided by players to buyers, weakens buyer power. Buyers can range in size from sole proprietors to multinational corporations and buyer power is boosted by larger buyers with greater financial muscle. Large businesses put office services and supplies out to tender bids while smaller businesses can negotiate discounts through trade associations. However, buyer power is sustained by low customer loyalty, low switching costs, low level product differentiation and high price sensitivity, giving customers a wide choice of retailers.The internet has made cost comparison easier, raising price transparency and increasing competition. Overall, buyer power is moderate. Supplier power Figure 6: Drivers of supplier power in the office services & supplies market in the United State s, 2010 Suppliers are numerous and diverse with a large array of goods. This scale of competition from low cost economies in the Asia-Pacific places restraints on other suppliers. Players tend to have several suppliers, and this, along with low switching costs, weakens supplier power, particularly in instances where larger players have greater negotiating power.On the other hand, suppliers can offer their products to a wide range of customers, and this serves to increase their supplier power. There are elements of integration within the industry as global players sell their own branded goods. For example, Staples own branded goods represented about 23% of their sales in 2009. The lower pricing of such activities undercuts the power of other suppliers. Overall, supplier power is moderate. New entrants Figure 7: Factors influencing the likelihood of new entrants in the office services & supplies market in the United States, 2010Most office supplies are commoditized products, which hav e little brand loyalty. This, along with low enduser switching costs, little government regulation, and easy access to suppliers and distribution channels, is conducive to the entry of new players into the market. Larger players benefit from scale economies that allow them to compete with high-volume office supply providers that lead the market. Larger players with greater financial muscle would be able to negotiate better contracts with suppliers and therefore achieve better profit margins.Entry can be achieved on a smaller scale by focusing on a specific product range (e. g. an ink cartridge specialty store) or by developing an online retail shop. Poor growth in recent years, with stagnant growth forecast for the 2010-2015 period, decreases the threat of new entrants into the market somewhat. Overall, the threat of new entrants is strong. Substitutes Figure 8: Factors influencing the threat of substitutes in the office services & supplies market in the United States, 2010Many mode rn companies are taking strategies to minimize costs and the environmental impact of their operations by moving towards a paperless office format: switching costs are not excessive, as most companies have already invested in appropriate ICT systems. This, therefore, constitutes a serious challenge to those operating primarily with paper-based office products. Storage and stationary may also be influenced by switching to a paperless office format. Office services such as photocopying, printing and binding may be substituted by electronic forms of communications.Overall, the threat of substitutes is moderate. Same source Office Depot, Inc. Table 10: Office Depot, Inc. : key facts Head office: 6600 North Military Trail, Boca Raton, Florida 33496, USA Telephone: 1 561 438 4800 Fax: 1 800 685 5010 Website: www. officedepot. com Financial year-end: January Ticker: ODP Stock exchange: New York Source: company website D A T A M O N I T O R Office Depot is engaged in the supply of office pro ducts and services. The company offers national branded and private labeled office products which includes business machines, computers and office furniture.Some of the private brands are Office Depot, Niceday, Foray, Ativa, Break Escapes, Worklife and Christopher Lowell. The company conducts its business through three business divisions: North American retail, North American business solutions and international. The North American retail division sells a range of branded and private branded merchandise including office supplies, business machines and computers, computer software, office furniture and other business related products and services. These products are sold through the company's chain of office supply stores in the US and Canada.The stores operated by the division also contain a copy, print and ship center which offers graphic designing, printing, reproduction, mailing, shipping, and other services. In 2008, Office Depot started PC support and network installation servi ces to provide in-home, in-office and in-store support for the technology needs of the customers. By the end of 2008, the company operated nearly 1,267 office supply stores in the US and Canada. Store replenishment is handled through cross dock facilities and the bulk merchandise is sorted and shipped within a day. By the end of 2008, the company operated 12 cross dock facilities.The North American business solutions division sells nationally branded and private brand office supplies, technology products, furniture and services through various channels: dedicated sales force; catalogs and internet sites. The division's direct business is tailored to service small and medium sized customers. These customers can order products from the catalogs through phone or through the company's websites. The North American business solutions division employs a dedicated sales force for the contract business which serves predominantly, medium sized to fortune 100 companies.The sales force LEADING COMPANIES United States – Office Services ; Supplies 0072 – 2115 – 2010 Â © Datamonitor. This profile is a licensed product and is not to be photocopied Page 29 offer customers allied services of providing information, business-tools and problem solving. In addition, the division undertakes government contracts through a multi-state contract available to local and state government agencies, school districts, higher education and non-profit organizations across the US.The division operated 20 distribution centers at the end of 2008 and it fills in the contract and direct business orders through inventory maintained in these distribution centers. The international division offers office products and services in 48 countries throughout North America, Europe, Asia and Central America. Office Depot offers its products through wholly-owned and majorityowned entities or other ventures in 38 countries. This division sells its products and services through direct mail c atalogs, contract sales forces, internet sites and retail stores. Office Depot operated 162 retail stores in France, Japan,Hungary, Israel, Sweden and South Korea, as of January 2009. In addition, the company operated 98 stores under licensing and merchandise arrangements in South Korea and Thailand. Office Depot participates in the joint venture Office Depot de Mexico which operates 186 stores in Mexico, Costa Rica, El Salvador, Guatemala, Honduras and Panama. This division established regional headquarters for Europe/ Middle East and Asia to support its operations in these geographies. The company offers its products in the international market through more than 35 websites which cater to various geographical locations.It offers products through catalogs in 14 countries. Office Depot operated 43 wholly owned and majority owned distribution centers by the end of 2008 for providing inventory to fill in the orders of its international division. Source http://www. community. officedep ot. com/envpolicyqa. asp Clarifying Q ; A | Who are Office Depot's Stakeholders? | | Office Depot is committed to working with its stakeholders – our suppliers, employees, customers, shareholders and the conservation science community – to promote and advance environmental stewardship.This said, Office Depot will maintain an open communication channel with other organizations that wish to contribute to our process of continual improvement – a communications channel and process in which contributions are considered within the framework of conservation science, so that we may continue to strengthen our environmental performance by internalizing appropriate, scientifically based improvements to our environmental policies and programs.Office Depot's work with the conservation science community reflects our desire for a collaborative, scientific approach to identifying and addressing the issues of environmental stewardship. | | | Why Does Office Depot engage its Stak eholders and what is Office Depot's approach to stakeholder involvement? | | Office Depot's approach is one of inclusion and consultation for the mutual benefit of the environment and our stakeholders.Office Depot actively promotes the responsible use of our natural resources by working with these stakeholders in the ongoing pursuit of improvements and innovation that promote and advance the principles of environmental stewardship in ways that: * Produce solutions with integrity and purpose; * Are responsible, transparent, accountable, realistic and actionable; * Produce results that are tangible, measurable and reportable; and, * Reward innovation and leadership. |

Friday, January 3, 2020

A Complete Financial Analysis Of Amazon.com - 1302 Words

A Complete Financial Analysis of Amazon.com: Amazon Analysis Introduction Amazon.com is an online retail company formed in 1996 by Jeffrey Bezos. The company sells a multitude of products ranging from electronics to subscription services for premium members. Amazon encompasses millions of items sold through outside companies. Additionally, Amazon offers services which allow business people, such as filmmakers and singers, the rights to sell and publish their works (Amazon.com Inc Company Profile). Amazon’s return on assets has increased between 2012 and 2013. However, from 2013 to 2014 the return on assets has decreased greatly (Growth, Profitability, and Financial Ratios for Amazon). Currently the company’s return on assets is -0.51. The company’s Current Ratio is 1.12. Its quick ratio is 0.82 and its cash ratio is 0.62 (Amazon.com Inc MarketWatch). Amazon.com is in the Internet industry. 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