AUSTRALIA FAST FOOD SITUATIONAL ANALYSIS Essay Example

  • Category:
    Marketing
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    2
  • Words:
    1425

Hungry Jack’s Situation Analysis

Lecturer:

Semester:

Table of Contents

1Introduction

Hungry Jack’s is a major player in the Australian fast food industry. The company holds the franchise for Burger King in Australia and also for KFC. This situation analysis will seek to shed more light on the company’s profile, fast food market situation, business environment factors in the industry as well as the competitive nature of the industry.

2Company analysis for Hungry Jack’s

Hungry Jack’s started its operations as a single store in Innaloo in 1971. The success of the first store led to the opening of another store in 1972 in Anzac Highway southern Australia. Since then the company has been on a growth trajectory especially after adopting Burger King Corporation franchising strategy in 1990 as competitive foods Australia. Today Hungry Jack’s has operations in every Australian state with its network of over 340 stores (Hungrv Jack’s, 2013)

. Semester:
Hungry Jack’s logo

The company’s mission statement is to ensure that its guests return for more by delivering great food through the highest standards of quality, service, and cleanliness every hour of the day, every day of the year (Hungrv Jack’s, 2013). Hungry Jack’s is a private company that is not required to release to the public its financial information; however in the year 2010, WA News reported the company had surpassed the $1 billion mark in sales (Sonti, 2010). That year alone, the sales revenue rose to $1.043 billion. Hungry Jack’s services 4% of the Australian fast-food market. The company holds the national franchise for us based Burger King (Market Line, 2012). The company relies on its own stores and third party franchising to expand its market share and generate revenue, 70% of the stores are franchised (Sonti, 2010). Their products include but not limited to; beef favorites such as Big Cheese, chicken favorites, drinks such as juice, coffee, iced tea, kid meals and breakfast meals (Hungrv Jack’s, 2013).

3Market analysis

The fast food market can be defined as the sale of food and drinks for immediate consumption on the point of sale premises or other designated food areas or for consumption elsewhere (Market Line, 2012). According to Market Line (2012) the market can be split into four segments: Quick Service Restaurants, Takeaways, Mobile & street Vendors and Leisure Locations. The common fast foods for sale are; meat/fish dishes such as hamburgers, chicken burgers and hot dogs, prepared meal such as meat pies, sausage rolls, pizza and pasties, beverages such as tea, coffee, fresh juice, energy drinks and carbonated drinks. Burgers are the most popular.The Australian fast food market was valued at $5,072.5 million growing at a rate of 4.2% since the year 2007. The market volume in the year 2011 was at 1,173.1 million transactions. The market was expected to grow at a compounded annual growth rate of 2.6% from 2011 to 2016 reaching a value of $6,289.3 million by the year 2016. At the same time the transaction volumes are expected to reach 1,135.6 million transactions which will be a reduced market share of about 1.3% compounded annual rate from 2011. The buyer independence is very high as well as very high possibility of low-cost switching this means the buyers are also very sensitive to price changes. An increase in price for common fast food items like burgers is likely to cause buyers to switch to another player provided the price is lower. On the same note, price elasticity of demand is quite high and increase in price may result in reduced demand since fast food is not necessarily an essential commodity to consumers (Market Line, 2012).

4Environmental analysis

4.1Political

Fast food businesses in Australia are not prone to get negatively affected by political uncertainties. The World Bank doing business report considers the commonwealth of Australia as a stable constitutional monarchy which is currently experiencing stable political climate conducive for business (World Bank, 2013).

4.2Economical

Australia’s economy is relatively stable with a GDP of $US 1,515,468 million according to the World Bank data of the year 2012 (World Bank, 2013). This means the economic aspect of the environment is quite conducive and the fast food market is poised to grow at a rate of 4.2% up to the year 2016 to $5,072.5 million (Market Line, 2012).

4.3Technological

Fast food companies just like other businesses that interact with customers directly need to adopt revolutionary technology like e-payment options and customer service machines such as drink dispensers. Smart vending machines can also be used to collect consumption data and send it to headquarters for analysis and formulation of strategy (Walker, 2007). These and other technological advancements are an important consideration considering the changing consumer behavior and development of competitors’ strategies.

4.4 Legal

The complicated nature of franchising contracts is more captured by the Mr Cowin, the Hungry jack’s owner’s effort to refine the franchising law in Australia in order to have stiffer penalties for contract breaches (Sonti, 2010). The legal aspect of business environment in regards to fast foods stores franchising is a complicated scene which can result in loss of millions of Dollars incase of breach of contract. This means that contracts are to be well understood before being signed.

4.5Environmental and social

As people become more aware of changes in the global climate, companies are coming under intense public pressure to use resources responsibly. This means the consumption of water by a whole chain of a fast food company should be as minimal as possible. Disposal of waste is also another challenge whereby authorities expect proper disposal of waste to protect the environment. It can also be turned into an opportunity through projects such as bio-digester systems to produce energy in form of gas to be used in the stores. Fast foods are also regarded as a source of lifestyle diseases such as obesity and diabetes. This means the fast food companies are faced with a growing opposition for their products by policy shapers and the public as well. As such they have to package their products as healthy and fight pressure from these groups. This is a key factor for consideration as far as social aspects of the business environment are concerned (Goyal & Sicgh, 2007).

5Competitive analysis

The biggest player in the Australia’s fast food industry is McDonalds with a market share of 26% in the total fast food sector. McDonalds is an international outfit with much presence in US and other strong economies. The company recorded $24,075 million for 2010 (Market Line, 2012). McDonald’s main products in Australia include; hamburgers and cheeseburgers, chicken sandwiches, French fries, chicken nuggets, and cookies (Market Line, 2012). MacDonalds operates over 32,000 restaurants in 117 countries around the world (Market Line, 2012). In Australia it has initiative such integration of McCafe in an effort to move away from the ‘junk food’ image .this is an important marketing strategy considering the changing consumer behavior towards more healthy food (Euromonitor International, 2012). Domino’s is also another big player with 411 stores in Australia. The company has an international presence in Canada, china, India and other countries. It leverages on franchising stores around the world making it the leading pizza delivery company (Market Line, 2012). Domino’s revenue for 2010 was $ 1,570 million (Market Line, 2012). There other competitors but these two pose the greatest rivalry to Hungry Jack’s considering their expanded operations in many countries that make them almost immune to economic depressions in certain regions of the world. They also have excellent product portfolio and strong brands that can easily attract hungry Jack’s consumers.

6Conclusion

This situation analysis shows the position of Hungry Jack’s in the Australian fast-food market. There exists a lot of competition in the industry as well as changing consumer perceptions regarding fast foods. All the same the market shows signs of high returns on investments if the forecasted growth in the market is to occur.

References

Euromonitor International. (2012). Consumer food Service: Euromonitor. Retrieved July 28, 2013, from Euromonitor Internertional Website: http://www.euromonitor.com/fast-food-in-australia/report

Goyal, A., & Sicgh, N. (2007). Consumer perception about fast food in India: an exploratory study. British Food Journal
, 109 (2), 182-195.

Hungrv Jack’s. (2013). About us. Retrieved July 28, 2013, from Hungry Jack’s Web site: http://www.HungryJack’s.com.au/about-us

Market Line. (2012). Fast Food Industry Profile Australia. Datamonitor Plc.

Sonti, C. (2010, December 13). The burgers sell better at Hungry Jack’s. WA News. Retreived from HYPERLINK «http://www.watoday.com.au/wa-news/the-burgers-sell-better-at-hungry-jacks-20101210-18sor.html» http://www.watoday.com.au/wa-news/the-burgers-sell-better-at-Hungry-Jack’s-20101210-18sor.html
[accessed 28 July 2013]

Walker, J. (2007). The Restaurant: From Concept to Operation. John Wiley and Sons.

World Bank. (2013). Data: World Bank. Retrieved July 28, 2013, from world Bank Website: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD

Save Your Time for
More Important Things
Let us write or edit the article on your topic