Micro Environment-Competitor Analysis

Prior making entry decisions in foreign markets, it is vital for businesses to carefully
evaluate the international business environment of alternative host countries (Hill,
2013). One of the most fundamental factors to consider while undertaking foreign
entry decisions is a competitive rivalry. Dream Dinners is a US based meal
preparation organization that allows families to make food beforehand for cooking at
home or freezing (Dream Dinners, 2019). Initiated in 2002, the company now wishes
to expand its operations in international market as its home market is saturated.
Currently, Dream Dinners is considering two options for penetration i.e. UK and
Japan. The competitors identified in both the United States and Japan are food
retailing and companies, specifically famous for their fast food options. Although
Dream Dinners is not a fast food restaurant, it competes in the market of
prepared food. In essence, customers who wish to purchase pre-cooked food
would either choose to purchase the products of restaurants or frozen food
prepared by organizations such as Dream Dinners.

Competitors in the UK

There are several food retailing companies in both the UK and Japan including KFC,
Burger King, Nando’s, McDonald's, Subway, Pizza Hut and Dominos etc. (Bracken,
2018). As revealed in a report, the fast food and takeaway market of UK is growing at
a considerable rate as the sales growth was amounted to 20.6% in 2018, capturing a
total market share of 34.3% (Hospitality and Catering News, 2018). Furthermore, the
report also indicated that the average cost per transaction in fast food consumption has
decreased by 1.5% in the country, consequently providing a room for low-priced food
retailers to penetrate the market (Hospitality and Catering News, 2018). In 2017,
McDonald's generated the highest revenue among the top fast food chains in UK of
about 2.06 billion GBP, followed by the market leader of pizza industry i.e. Dominos
which achieved a revenue of 980 million GBP (Bracken, 2018). Moreover, KFC,
Nando’s and Subway generated revenue of 791 million, 772 million and 629 million
GBP respectively. However, Burger King and Pizza Hut achieved the revenue of 594
million and 536 million GBP only (Bracken, 2018). Overall, the revenue generated by
the competitors of Dream Dinners in the UK accounted for approximately 6.36 billion
GBP.

Competitors in Japan

On the other hand, the growth in the restaurant industry of Japan amounted to only
1.8% in 2017 (Otsuka, 2017), hence indicating an increased preference of Japanese
people towards eating at home. Nevertheless, the share of fast food companies is still
greater in the country due to tourists. For instance, McDonalds’ revenue in 2017 was
2.26 billion USD (Nikkei Asian Review, 2019) while KFC generated 1.1 billion USD
(Otsuka, 2017). Similarly, Dominos achieved 355 million USD as revenue whereas
Pizza Hut accounted for 216 million USD (Otsuka, 2017).

Convenient

KFC Nando’s
Pizza Hut

Burger King McDonald’s

Dominos Healthy
Unhealthy
Subway

Dream
Dinners

Time Consuming

Figure 1: Fast Food Industry Perceptual Map

The above figure reveals the positioning of top fast food brands in the perception of
both the UK and Japanese customers. Burger King, McDonald's, Dominos, Pizza Hut
and KFC fall into the unhealthy food category whereas Nando’s and Subway are
regarded as healthy food options. McDonald’s, Pizza Hut, Nando’s, KFC, Dominos
and Burger King are all very convenient in terms of time. All these brands fall into the
category of fast food i.e. food that can be prepared quickly. However, Subway and
Dream Dinners are both time-consuming options, as the customers have to get their
meal prepared at subway by giving instructions, while Dream Dinner’s products
require some time for re-heating. Hence, it can be deduced that Dream Dinners can be
a successful entrant in the food industry due to its healthier approach.

Also, as the above-mentioned statistics have illustrated that there are more fast food
companies in the UK as compared to Japan because fast food consumption is greater
in the former country, this provides an opportunity for Dream Dinners to capture the
Japanese market. Correspondingly, this is because Japanese people value eating at
home more than consuming fast food. A research conducted by Hapiken discovered
that 58.8% of women in Japan prefer cooking and eating at home whereas 29.9%
working women revealed that they bring home- cooked food for lunch with them at
the office. Therefore, Dream Dinners can cater to this demand of Japanese consumers
and consequently uplift their chances of achieving success in the international market.