External Environment and Organizational Response - Fast Food Industry - Essay Example

The fast-food industry has demonstrated significant growth and market opportunities which are characterized by the increase in disposable income among New Zealanders as attributed to the increased income and living standards. The trends of the New Zealand economy reveal an increase in monthly wages, benefits, and bonuses among consumers. In addition, the busy lifestyles of consumers within the working class and institutions of learning have resulted in increased consumption of fast food. This is due to the cost-effectiveness and convenience which characterize the fast-food industry. It is in line with the market trends and business opportunities within the New Zealand food industry that Quick Meal Restaurant endeavors to invest in this market.

Porter’s Five Forces Analysis

Supplier power is one of the most important forces within the market which defines the competitiveness of a company (Pathak, 2012). The fast-food production industry within New Zealand depends largely on the ability of effective supply of raw materials for the production of high-quality food products at the right time and quantity so that the needs of the consumers are met. The concentration of suppliers of food products within the New Zealand fast food industry is relatively high (Chand, Eyles & Ni Mhurchu, 2012). This reflects that fast food industries that require investing in this market have desirable market opportunities that they would invest in for competitive advantage. However, there are substitute food products within the New Zealand food industry that are likely to threaten the supply of fast food products.

Porter’s analysis of market forces also demonstrates that the power of the buyer is one of the most significant forces within the market which determines the ability of a company to meet its business objectives (Pathak, 2012).  The New Zealand fast-food consumer is very sensitive to price and quality. This illustrates that the consumer factors must be incorporated into company values for the quality and price of fast food products for the attainment of a competitive edge within this market. The threat of product or service substitutes is another external force within a market that influences the strategic competitive strategy of a company. For example, food substitutes within large retailers and restaurants are likely to be a major business threat for a company that requires investing in the fast-food market within this industry.

The threat of new entrants into a specific market is described by Porter as a strong market force that determines the success of a brand within the market (Roy, 2009).  New businesses within the New Zealand fast food market are more likely to cause a business threat for fast food companies. This is related to the fact that new entrants into the market lead to a reduced share of the market and as a result, a reduction in the return on revenue. The switching costs within the New Zealand fast food market are said to be very low which makes the threat of new entrants into this market very significant in defining the competitive advantage of a company (Chand, Eyles & Ni Mhurchu, 2012). The degree of business rivalry within a specific market shapes business strategies for competitiveness and in this regard determines the success of a company within the market (Roy, 2009). The growth of the fast-food industry within New Zealand has led to increased rivalry or competitiveness, which a new company within this market should be aware of as a basis for effective competitive strategies and decisions (Chand, Eyles & Ni Mhurchu, 2012).

Quick Meal Restaurant’s Coping Strategies

Quick Meal Restaurant must employ a competitive business strategy so that it would be able to overcome forces and challenges within the New Zealand fast-food market. A competitive market strategy allows a company to focus on strategies and objectives or goals that will allow it to attain market leadership and as a result overcome the rivalry within the market (Kim, Jeon, Jung, Lu & Jones, 2012). Quick Meal Restaurant should also employ effective leadership and management of its operations within New Zealand as a way through which it would overcome the threat of substitutes and new entrants into the market. Effective leadership or management of a company leads to the application of proper strategies such as proper human resource management through compensation-based motivation which leads to high-quality products and service delivery to the consumers (Darling & Heller, 2011). In return, a company is able to overcome business forces in the external environment. This can also be achieved through differentiated products which would be used to win the loyalty of customers and overcome substitute products or services within the market.

Adoption and implementation of technology within Quick Meal Restaurant are some of the most effective ways through which it could overcome consumer-related challenges. For example, technology would enhance business processes such as billing and as a result, lead to the attraction of customers to the restaurant for efficient services. Technology will also enable the company to interact or communicate with its consumers effectively so that their needs that are reflected by the power of the buyer are understood and met (Kim, Jeon, Jung, Lu & Jones, 2012). This will enhance the competitiveness of the company within the fast-food industry. Effective marketing communication through proper product promotion activities is another appropriate approach that the company would employ to overcome the rivalry within the fast-food market (Kumar & Patra, 2012).