The Socio-cultural Aspects of Nutrition - Assignment Example

The Socio‐Cultural Aspects of Nutrition Political Obesity has become a foreseeable issue in future for National Health Service and costs of NHS are rising because of the changing eating patterns of people. The fast food companies are facing pressures from consumers, financial markets and courts as it is evident from the warning of JP Morgan to investors that shares of big companies could make them vulnerable to the wave of legislation. Therefore, Kraft reduced its portion sizes and fats levels to reduce such concerns against the company (Reeves, 2003). Economic Low set up cost Increasing population with an average age of 39 (National Statistics Bureau) Developed economy and out of recession (Allen & Elliot, 2010) Availability of franchising facilities set up Social The consumption of fast food in UK is increasing because of changing life style trends such as increasing income level, more working mothers and long working hours. The ready made meals consumed in UK are double than in France and six times than in Spain and the demand of ready meals have increased by 44 percent in Britain between 1990 and 2002 (Ofcom). The less authoritarian parents, decline in the number of combined family meals, snacking culture and demand of convenience food have increased the demand of fast food in UK. Legal UK regulatory organisations keep a strict check on activities of fast food companies for example; Committee on Advertising Practice (CAP) code prohibits these companies from advertising fast food to kids. Technological Fast food companies in UK are highly focusing on internet technology to promote their products, however, in 2007; New Advertising Standards Association Rules prohibited these companies from advertising their products both online and offline to kids (BBC, 2007). The companies who had been targeting kids through video games, cartoons over their websites suffered a lot. Environmental Environmental protection team keeps on receiving the complaints regarding the odour and food from the consumers and it keeps a check on activities of fast food chains (South Gloucestershire Council, 2010). To comply with environment protection laws, the fast food chains have to follow odour/nuisance control, drainage and pest control advices. Question 2: Porter’s Five Forces Threat of New Entrants Threat of new entrants is high in the UK food industry because of various reasons. First, the set up cost is not very much high which makes most of the businesses capable to enter into this industry. Secondly, product differentiation is also high which also increases the threats of new entrants. Threats of Substitutes Threat of Substitutes is pretty high in the UK food industry because of the nature of the product and services. The availability of various brands and convenience shops increase competition. Second, the presence of a variety of mid-range restaurants in the UK also increases the options for the consumers. Third, pre-cooked food is the major substitute of fast food. Furthermore, the increasing concern of the people about unhealthy diet makes healthy food shops such as Subways, as major substitutes of fast food. Power of Buyers Bargaining power of buyers is high in UK fast food industry because of three major reasons. First, the switching cost to rival brands is low which increases the power of the customers to switch brands more frequently. Second, endless range of products is available to customers which increase options for them, thereby, increasing their power to bargain. Third, the brand loyalty of customers is also less in this industry which also contributes to increase bargaining power of buyers. Power of Suppliers The bargaining power of suppliers is low in UK fast food industry. The major suppliers in this industry are the producers of food, suppliers of raw materials and packaging manufacturers. It means that the market of suppliers is fragmented in this industry. Because of the availability of various suppliers from all fragments the power of suppliers is low. The switching costs from one supplier to another are also which poses great risks for the suppliers. All these factors put pressures on the suppliers to reduce their margins, thereby, reducing their bargaining power. Competitive Rivalry The UK fast food market structure is highly competitive and well diversified. Most of the companies operating in this industry in the UK have huge range of resources at their disposal however, various smaller retailers offering their products in regional areas such as Northern England are also making reasonable profits. Because of the higher competition in this industry, the price wars are very normal among the companies. Moreover, since the new entrants are more likely to enter because of the low set up costs and the overall demand of fast food is increasing therefore, the fast food industry in UK is highly competitive. Question 3: UK builds strong relationships through its diplomatic foreign policy implemented by UK’s Foreign and Commonwealth Office. During the early 19th and 20th centuries, UK had a significant influence on other economies and until 1950 it emerged as a superpower nevertheless, decolonisation and the first and second World Wars reduced the influence of UK over other economies (Wikipedia). Presently, UK is considered as a leading player in cultural world because of its historical collections, and long term relations with international organisations which also increase relations of UK with other economies, thereby, increasing the participation of UK’s economy in the process of internationalisation of businesses (Bound et al, 2007). Moreover, the interests of UK for developing relations with other economies vary over time and the ways through which interest has been protected and promoted usually include informal conversations and formal diplomatic exchanges (Ministry of Justice, 2008). McDonalds is a US based company and its successful operations in the UK market are the result of international relations between UK and US. Royle argues that politicians in the UK have been emphasising on the need of special relations between UK and US, which were at its peak during Second World War. The Thatcher administration’s government policy of 1980s and 1990s pursued more strongly on US economic model and less strongly on Europe however, American’s policy since 1940s has been encouraging Britain to become more involved in Europe. Since most of the European economies including UK are pursuing flexible economic structures as influenced by US therefore, the companies like McDonalds are finding no problems whilst operating in the UK. For example, the labour market law which is being followed in the US food industry is the 1999 Employment Act and it is interesting to note that the design and origins of this law are quite similar to US industrial relations system. In addition, the geography of UK allows the US food outlets to expand their operations further in other European countries. Like McDonalds, most of other US based fast food chains are operating successfully in UK. The health and safety concerns are very similar in both of the countries therefore, McDonalds does not face much political risks. Like the US economy, UK’s economy is well developed and the working environment is also very similar. The legal structure is also similar which allows the US companies to mould their policies according to UK’s legal environment. Moreover, the availability of innovative and advanced technology and the similar environmental protection laws further facilitates US based fast food companies to smoothly continue their operations in the UK. Recommendations Based on the analysis of part I and II, it is recommended to the companies which are planning to enter into UK market that UK fast food industry is a very appealing and attractive industry however; it is facing the problems because of unhealthy food concerns. Moreover, entry into market is easier, bargaining power of buyers is high and that of suppliers is low and the regulatory structure is not very strict, therefore, this is the right time to enter into UK market. However, to avoid price war and to ensure survival in highly competitive industry, fast food companies should come up with healthy food products. 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