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The fast food industry, otherwise known as Quick Service Restaurants (QSR), is a specific
type of restaurant characterized both by its fast food cuisine and by minimal table service.
Fast food industry consists of both multinational corporations such as McDonald’s and
small home-based restaurants. What are the threats and opportunities McDonald’s is facing
in this industry? We will first discuss the environment of the industry using the PEST
model and then applying the Porter’s Five Competitive Forces to analyze the
competitiveness within the industry.
1. PEST Environmental analysis
1.1 Political Factors:
The multinational fast-food corporations are influenced by the policies in different
countries concerning health, safety, worker protection and environment. For example, in
2010, the Congress passed the America’s health reform bill which requires restaurant
chains with 20 or more outlets to put the calorie-content of items they serve on the menu.
While the industry is growing worldwide, the restaurants have to watch out such political
issues and adapt to the local environment.
1.2 Economic Factors:
To guarantee the success of their performance, companies should watch out for economic
factors such as cost of set-up, raw materials and exchange rates. In determining which
countries or areas to expand, companies need to value the economy in these destinations in
order to see the purchasing power of the customers.
1.3 Socio-Cultural Factors:
The changing lifestyles of people can affect the operation procedures of fast food industry.
Generally, people are getting busier and having a faster pace of life, thus the time and
efficiency is important in fast-food industry. Moreover, people are getting more conscious
