Porters Five Forces Analysis of Fast Food Industry
MACROENVIRONMENT
Demographic
* Increasing women workforce
* Nonunionized employees
* Young affluent population1
* Rising disposable income1
* Rising consumer awareness on health and safety concerns3,4
Socio-Cultural
* Filipinos love for food
* Fast paced life2
Political/Legal
* Present but not very significant government regulation
Technological
* Technological Advancement (e.g. creations of assembly lines, touch screen monitors,
etc.)
Global
* Western influence in the global fast food scene
Bargaining Power of Suppliers
Weakening
* Easy for the industry player to go to suppliers business
* Highly competitive supplier industry
* Greater share of customer base by the fast food industry for the suppliers
* Low suppliers switching costs
* Difficulty of supplier industry to circumvent fast food industry
* Cheap and nonunionized labor supply
* Present but not very significant government regulation
Strengthening
* Suppliers products
are important inputs but any supplier strength that may arise from this is low because of
the competitiveness of the industry.
Overall Finding:
Bargaining power of suppliers is WEAK.
Threat of New Entrants
Weakening
* Existing players high differentiation of products and brand identification with buyers
* Existing players cost advantage over prospective entrants not related to the size of the
company (contacts and expertise)
* Rising consumer awareness regarding health and safety concerns
Strengthening
* Economies of scale not existing among existing players
* Low capital requirements
* Buyers easy switching from one existing fast food to a new one
* Easy access to distribution channels (e.g. stalls and rent spaces in malls and other
establishments)
* Surging demand for fast food:
* Industrialization and growth among the number of women in the workforce
* Todays fast-paced lifestyle
* Young affluent population
