A & W Drive-Ins Limited Strategic Analysis
flexibility for local tastes. For example, in the northeastern Canadian locations the menus include a local favorite of fried clams, something not offered at other chain restaurants.
The primary driving force behind the fast food industry is the mobility of society. The fast pace of life in industrialized centers makes it very difficult for people to work all day without having a break. Taking lunch becomes complicated in a large workforce as foods generally require refrigeration or heating and there is not enough storage space in the work place for storing lunches from home. Furthermore, the food is not safe from being mistaken or stolen by other people. The unique needs of the workforce has made the fast food industry with its speed, low costs and convenience the popular alternative to bring lunch from home.
Forces of Competition:
Bargaining power: The bargaining power of the customers is that there are so many choices of fast food restaurants. The bigger the chain the lower the costs of the production and the cheaper the food to the customer. With a broad range of prices between the fast food the customer decides what his or her budget will allow. It is in the interests of the chains to keep the costs to the customer as low as possible and the quality of the food as high as possible in order to keep the customer returning.
The bargaining power of the suppliers is that they are offering a variety of foods at a variety of prices for the customers. They have an understanding that people get bored and want a variety of foods and options. People do not want the same thing every day and therefore it is not necessarily a bad thing to have competitors in close proximity.
Substitutes: The substitute for fast food is either taking more time for lunch to go home or eat at a slower-paced restaurant, or to bring food from home, which has already been explained as problematic. For many people there are no viable alternatives to fast food lunches.
Threat of entry: The entry of new restaurants is not a serious threat to existing fast food because of the changes in society. The more people enter the workplace, the less time they have to cook and prepare lunches at home. it is easier and more convenient to eat out. It is also a social time because many people socialize with co-workers by eating out. Furthermore, as more people work and the demands on time become greater, more restaurants means more people will be able to eat at the same time. There is currently more demand than supply.