Five Forces Analysis on Happy Meals Franchise

Happy Meals Franchise

Adjustments are needed and must be based into economic studies. The product of a business should sustain the market needs but it is hard when the environmental aspect intercepted the market performance. This kind of hindrance can block the profitability and the strategy that was formerly made will be useless.

The only thing that the business is to seek another business strategy that is appropriate to the diminishing market problem. And the development should be continuous as long as the firm operates. The business should identify the problem for which according to the Porter’s Five Force Analysis. The rivalry can trigger to the problem that might occur and can come into different characteristics.

The slow market growth can be originated from the large number of competing firms because they share the same customers and resources. The high cost upon the purchase of the product can result to a fight in market share and tends to sell the output in a higher price.

The perishable product is sensitive which a minimum date will only last for a day. It got even worse when a calamity strikes the business and the competitor that needs the same goods tends to intensify the rivalry over it. The customers have the freedom to choose and switch into different decisions because there are many available substitutes. It can also make an impact in product differentiation and cannot avoid comparison.

The business competition becomes intense and somehow reached different aspect of market environment. The firms can establish, as well as touching the consumer’s cultures, histories, and philosophies aside from identifying the taste and preferences throughout the market demand.

Targeting for the potential market position can attract potential profits. And when the target place is too crowded by the firms that had a same product line, it can only reveal for a downfall of one or two weak business. Another thing that might happen is to saturate the market because of the excess suppliers.

It is impossible to survive in this kind of market rival and competition. The business should find a place where there is no close competition or at least less rivals and market stability.

Porter’s Five Forces Analysis

The businesses have force that surrounds the business activities that can eventually be the factors of intense rivalry. The supplier power is the one aspect that concentrates on the volume that they are supplying the firms. The industry that needs their service seeks for the presence of the substitute inputs if the original one is not yet available.

The market entry has many barriers that blocked the access of the inputs. There are government policies, regulations, and requirements that can be appropriate recognized the identity. The firm should determine the scale of economical advantage before releasing a decision.

The consumer also contributed by their power upon the bargaining level and volume of their needs. They are also sensitive in terms of the firm’s price. The buyers are smart enough to learn the threats, like price manipulation or product hoarding.

The threat also arises from the substitutes available which is the last resort of every desperate buyer who seeks for a product which have a slight difference from the original product.

Suggestions

To cast away or lessen the impact of business problem, a good research is a start of the business strategy approach. At first, the firms should place a strong hold on the market. The firm should understand the consumer relation and get concentrated from it. If there are only few buyers in a certain place, then the business should concentrate in maintaining their business domain. The firm should give an appropriate portion of output and distribute it well.

The suppliers can be effective if they integrated and the firm had a chance to switch for other suppliers. A firm that has a broad choice can make stretch possibility to gain the competitive advantage.

In terms of the entry barriers, the firm must recognize the availability of technology and remote resources. A good access to different distribution channels is another advantage.

Main Source:

Porter’s Five Force Analysis [Online] Available at: http://www.quickmba.com/strategy/porter.shtml [Accessed 02 October 2009].