Industry Market Prediction
- Global fast food market was valued at USD 477.1 billion in 2013 and is expected growth at a CAGR of 4%, reaching USD 617.1 billion in 2019. 45
Partly due to an increase in demand for healthy and convenient fast food
More companies are expected to invest heavily in introducing healthier menu items
- The fast casual market offering better quality food is expected to grow further after a growth 9.2% from 2015-2019. 46
Chewing away at market share from fast food chains.
- Mobile technology use will see an increase with mobile payments expected to reach $9bn by the end of 201547
Fast food chains will invest heavily in technology
- Global demand for Asian fast food will continue to grow sharply in 201548
Fast food chains will implement Asian tastes in their menus around the world
- Generation Z is getting older - Younger teenagers are now making their own decisions on where they go to eat. Over the next few years fast food chains will move their attention from the Millennial to Generation Z49
High tech services, change in music played in restaurants and strong internet marketing
- Product development: Increase quality and range of salads and fruit based products in the menu at low prices to counter unhealthy food image. This can be executed via organic development.
- Product development: Introduce Noodle based menu. This can be done via organic development or joint ventures with other Chinese food chains such as Ting Hsin. Already have a rice based menu to complement this.
- Market penetration: Re-acquisition of Chipotle. Executed via organic development.
- Product development: Include porridge based products in the breakfast menu to take advantage of the unsaturated breakfast sector – Organic development.
- Product development: Introduce online delivery service. This can be done by a joint venture with JustEat.com and employing delivery teams.
- Market penetration: Open 1000 more Mc Cafe restaurants; this can be done via organic development and by offering franchise options.
- Product development: Focus on improving the dessert menu to take advantage of the increasing consumption of desserts. This can be done by agreeing a joint venture with Haagan Dazs.
- Do nothing - carrying on with current strategies
Financial: Little investment from the $4.9bn free cash flow (FCF) required as MCD currently already has access to required commodities; for example from the world’s largest supplier of cut vegetables and salads, Taylor Farms.
Currently R&D costs are low due to strong product development facilities around the world; this strategy will make use of this. The strategy will generate profits in the long term. It will also increase its brand image opening doors to partnerships (Eg. Disney, who dissolved partnership after obesity claims)
Resources already meet quality standards required. Extensive advertising (S,CC) will be required to increase demand for products. Detailed product development (CC) will be needed to generate appetising tastes with the healthy meals. Staff may also need to be trained to prepare the food/products.