Factors Affecting the Growth of the Fast Food Industry
The fast food industry has been the backbone of the American economy for many years, and it is projected to remain so in the years to come. These factors include the technological change in restaurant services and governmental regulations allowing greater marketing privileges than other industries. The growth of the food industry may also lead to an increase in food production jobs which will help employ numerous workers..
The United States government has always encouraged fast food companies to create a boost in the economy. To understand why, one must analyze the economy’s growth and consider the deregulation of natural monopolies, which has been a cause for an increase in business competition. To correctly explain why fast food companies are so profitable, one must analyze the industry and its role in today’s market. This article will discuss factors that affect the success of a fast-food restaurant.
1. Avoiding Stiff Competition
The restaurant business is highly competitive. It is expected that within the next five years, several other major players will emerge in the industry. This would put an additional burden on successful fast-food companies because they must meet the demand of their consumers while at the same time keeping up with competitors. If you run a restaurant that specializes in greek food, be sure to come up with a strategy that sets you apart from your competitors, and offer greek food that appeals to most people.
According to Jordan Sudberg, the CEO and Medical Director of Spine and Sports Rehabilitation Center, published in Fast Food Nation, “diners are losing ground to fast food establishments…” This statement indicates that the industry is hot and new players will emerge. It also means that competition has increased within the market because of profit potential.
2. Marketing And Name Branding
In the fast food industry, a restaurant’s name generates most of its profits. The name of a restaurant is advertised, and this media goes out to the public. Many other factors go into the popularity of a fast food restaurant; however, name-branding has always been a factor in the success of fast food companies. In addition to its success as an outlet for marketing names and the industry’s expansion, it has also been used as a retreat from government regulations. Because of this, many fast food chains are unregulated compared to other sectors. This is because an extensive range of consumers can purchase their food from a restaurant. Consequently, there is more growth in the industry because of the lack of regulation.
3. Government Deregulation
The government has always played a significant role in the success or failure of fast-food companies. First and foremost, they have influenced the industry by creating an environment that encourages competition and, at the same time, allows for easy progress in other areas. Over time, several initiatives have been deregulated. Some industries where the government has promoted deregulation include restaurants, schools, and landscaping. This has affected fast-food companies by allowing them to promote their products more creatively and effectively. As a result of deregulation, an increase in competition is expected in the industry. The government has also influenced boardroom decision-making by providing incentives that allow fast-food companies to profit from their marketing strategies. These include tax breaks, trade regulations, and other forms of encouragement to enable deregulation within the industry. Jordan Sudberg states that the fast-food industry is becoming as big as the automobile industry once was. The government’s response to this development has been to deregulate the industry by removing some of the regulations on competition. This can be seen as a reason for the fast-food industry’s growth because it promotes competition.