Business Strategies of Fast Food Venture

Impact of Environmental Factors

Political Impact

According to Verbeke (2013), the degree of effect that comes upon any industry when any company gets opportunities or pressures from governmental policies and political institutions are the political factors related to the growth of any industry. The factors are mostly government policies, terms, initiatives, wars terrorism, political trends, elections, etc. Political factors work in different levels affecting the fast food industry. According to Grünig, and Kühn(2015, p.89-96), During election polls, most people avoid outings to keep themselves safe from getting involved in any sort of negative incidents. The more people are worried about negativity or afraid of going out, the fewer outings affect the fast food industry. Legal challenges affect the fast food companies by making changes in laws of hospitality, etc. The political environment is responsible for the growth or destruction of the fast food industry since the people directly affected by political turmoil and the fast food companies who want to make a profit in a specific country would face problems in making business (Fowler and Breen, 2013, p.79). For instance, in Pakistan during the early 21st century the scandal surfaced that US Securities made changes on the compliance of the corporate sector. Another example is that of Sri Lanka, which went through civil war and hostility in Syria and Egypt: all these disruptions make it difficult for the international fast food industries to do business, achieve goals, and fulfil the mission that has badly affected the growth of fast food industries in these countries. Immigrants come from different countries in search of work and livelihood: a study in 2009 revealed that half of the workers in the National Milk Producers Federation are immigrants. In the fast food industry, the workers are comprised mainly of immigrants (Kreindler, Gilbert, and Zimbron, 2016, p.525-540) When any government improvises or changes the policies on immigrants the workers get affected thereby affecting the food industry. Brexit has recently affected the fast food industry. Brexit refers to the referendum that sped on the 23rd of 2016 that revealed the support of 51.9% of British people in separating the UK from the EU, thus the UK left the European Union. The impact of Brexit is significant, as it has opened a recruitment push as in McDonald's where around 5000 new jobs were created because of Brexit. Reports say that in Britain fast food chains will be having above 110,000 new workers thereafter.

Technological Impact

Lee et al. (2013, p.6) stated that technological aspects like innovation, incentives, development of competitor technology, information and communication control all industries including the fast food industry. How these elements work on a particular company or brand is highly crucial for industrial growth. With the constant change in technology the fast food industry is bound to make improvisations and keep the company updated to tackle competitor issues. Akay, Constant, and Giulietti, (2014, p.72-92) stated that Technology works on three levels in fast food industries:

• First in the field of production- by allotting updated machines, using new techniques that are time saving and workforce-saving at the same time.
• Second is in the ways workers are working, the more, workers feel safe while doing the work they feel happy with their work life and that makes the working environment healthier.
• Third is marketing- marketing strategies do not remain the same, and improved measures and procedures are used in the field of marketing.

Nowadays media or rather social media is a significant tool in marketing which is a product of technology. Morgenstern (2014) opined that firms now do promotions using different technologies. Nowadays companies develop various apps that consumers use to get their food. Since most workers in the fast food industry are immigrants as mentioned earlier, technological improvement often makes it difficult for old workers to carry on with the work. Most of the immigrant workers are unskilled and constant change confuses them; this gives scope to the young talent which is a plus point. On the other hand, technological improvisation attracts immigrants too. For instance, in 2003 and 2005 the arrival of computers in Beaudry, Greene respectively attracted the labor market. According to Dhingra, Ottaviano, Sampson, and Van Reenen, (2016, p.24), Immigrants do not possess any fixed shelter and are mostly dependent on fast foods because fast foods can reach any corner. Brexit resulted in the fall of the pound globally created a crisis and hindered fast food companies from improving their technological aspects of the company. Small scale industry is going through this sort of problem that is leading to a poor or comparatively less developed.

Economical Impact

Like in any other business, in the fast food industry also economic factors are one of the most crucial factors determining the stability of the industry. The important economic factors are- inflation, taxation, economic trends, seasonality issues, the local economy, and the like. Economic failure brings about the failure of the economic system in the fast food industry. Again, the poor economy of the country will consequently lead to low sales. The “Economist” magazine reveals that customers with not-so-flexible budgets and poor economies opt for low-priced fast food. The magazine adds that if the customer opts for eating homemade food instead of fast food; this will lead to reduced business activity exposing the chains of fast food to loss. Another economic aspect of the fast food industry that is just the opposite is that, during an economic downpour, customers go for fast food that is cheaper than expensive restaurant food. Immigrants shift from one place to another whenever an economic crisis occurs in a country especially the immigrant workers in search of livelihood flow to other places. Like, immediately after the Brexit phenomenon the value of the pound went down; the next day the value fell to $1.3228, and the value was 15% lower than the dollar and 10% lower than the euro. Due to this fast food industries are in the UK and McDonald's planned to open more outlets which is a positive side. Profit within the country is an added advantage undoubtedly.

Conclusion

With the modern fast lifestyle, people are more dependent on fast food. Therefore, as an industry, it is always in progress with new technologies, investments, market share and the like. Fast food industries are rapidly growing and spreading internationally. Developing countries like India are also pacing in the fast food industry. Since food is the fuel to live the scope fast food industry is obvious. The political issues that emerge from time to time distract the flow of the industry but the grip it has for decades cannot fade away. New measures like home delivery that Dominos was the first to invent to meet the growing demands of the customer. The technological invention gives exposure to the wide growth of the fast food industry. Marketing of fast food heavily attracts children. They are one of the crucial parts as customers who get attracted easily by the colourful look and tasty flavour. Fast foods go through criticism for not being healthy, but that hardly affects the fast food industry. For, decades fast foods have related to consumers aesthetically. To grow and make a profit fast food industries are picking up new menus, and marketing the foods using media with new tools. Fast food industries had great economic growth in past and have future scope further.

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Reference

• Akay, A., Constant, A. and Giulietti, C., (2014). The impact of immigration on the well-being of natives. Journal of Economic Behavior & Organization, 103, pp.72-92.
• Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J., (2016). The impact of Brexit on foreign investment in the UK. BREXIT 2016, 5(4), p.24.
• Fowler, L. and Breen, J., (2013). The impact of political factors on states’ adoption of renewable portfolio standards. The Electricity Journal, 26(2), pp.79-94.
• Grünig, R. and Kühn, R., (2015). Global Environmental Analysis. In The Strategy Planning Process, 44(3), pp. 89-96
• Kreindler, R., Gilbert, P. and Zimbron, R., (2016). Impact of Brexit on UK Competition Litigation and Arbitration. Journal of International Arbitration, 33(4), pp.521-540.
• Lee, W., Tyrrell, T. and Erdem, M., (2013). Exploring the behavioural aspects of adopting the technology: Meeting planners' use of social network media and the impact of perceived critical mass. Journal of Hospitality and Tourism Technology, 4(1), pp.6-22.
• Morgenstern, R.D., (2014). Economic analyses at EPA: assessing regulatory impact. London: Routledge.
• Verbeke, A., (2013). International business strategy. Cambridge: Cambridge University Press.

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