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What is Macro environment? PESTEL in Macro environment. Advantages of PESTEL. Why PESTEL? How is PESTEL used?

Fast Food Industry. PESTEL frameworks and Fast Food Industry. y P-Political y E-Economic y S- Social y T- Technological y E- Environmental y L- Legal Limitations of SWOT.

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en i nment An ly i

What is The Macro Environment?


P-E-S-T-E-L

The MacroEn ironment.

Competitors

The organisation

The m t gene l l ye of the en i onment i often referred to as the macroen ironment. Diagram Reference : Gerry Johnson, Kevan Scholes, Richard WhittingtonExploring Corporate Strategy.

Macro en ironmental analysis is an importantelement of methodical strategic planning. PM Ginter, W Jack Duncan - Long Range Planning, 1990 - Elsevier

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The external factors like the olitical, social, economic, technological, environmental and legal that affects a com any s erformance and lanning are usually not within its control and are referred to as the macro environment factors. Ref: e Chartered Inst tute of Mar etin . http://www.cim.co.u /cim/ser/html/infQui Macro-Environmental forces rofoundly affect the fortunes of marketers which are the roundabout concerns of industry. Ref: Kotler and Keller Mar etin Management. 13th Edition

What are these forces? PESTEL Theory. Definition of PESTEL : The PEST analysis carries otential to understand the market develo ment or down turn, the osition and sustainability for a business. (Oxford University Press. 2007.) A PEST analysis is a business measurement tool.PESTEL assesses the otential and suitability of market, including com etitors, from the standpoint of a particular proposition or a business . (http://www.businessballs.com)

Advantages of PESTEL. A PESTEL analysis helps identify opportunities and outperform competitors. It is uncomplicated and provides a broader picture of the business environment. Its helps in strategic analysis, raise awareness of threats, helps future anticipation and helps in the preparation to overcome those threats. http://www.brighthub.com/office/projectmanagement/articles/51754.aspx#ixzz0lWueYxVW Why PESTEL? The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand. -- Sun Tzu It is important to understand the environment and to analyse the future trends as to how are changes going to impact the individual organisation in the future. It helps in evaluating and forming the strategies of spotting opportunities in the future out of past experiences. Gerry Johnson, Kevan Scholes, Richard Whittington Exploring Corporate Strategy.7th Edition. Firtly, with PESTEL analysis, it can be ensured that the steps taken is associated properly to tackle the prevailing forces of change that are affecting our Universe. Secondly, it helps in prevention from taking the action that is certain to failure. http://www.mindtools.com/pages/article/newTM _09.htm

How is PESTEL used? It should be decided as to how the appropriate sources for the information is to be gathered and a debated approach is much effective than an individual s view. After collecting the information, it can be strategic to use a format as the base of data evaluation. Through the formal analyse the data to spot issues and identify the alternative s to solve them. Formulate a report and circulate the findings.Take a decision as to what has to be monitored on a regular basis. hartered Institute of Personnel and Development. http://www.cipd.co.uk/subjects/corpstrtgy/general/pestle-analysis.htm http://www.mindtools.com/pages/article/newTM _09.htm

Fast Food Industry- United Kingdom. Players in the UK fast food industry are Greggs, Subway, Thurston s, McDonalds, Burger King, Pizza Hut, KFC,Fish and Chips, Indians or Chinese Takeaway s. The competition in the fast food market is extremely high and will remain high considering the fast life, time conveniences, cost of living, changing food habits, etc.This industry shares 8% of the nations GDP with employment opportunities to 3.8 million people, one of the recession proof industries quoted by Forbes with massive future prospects. www.fastfoodindustry.co.uk

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PESTEL Terminologies and frameworkwith FAST FOOD INDUSTRY. Political :The political environment refers to the external forces controlled by government term and change, policies, legislations, regulations,trading standards and the quality of the product, some of which are enforced by law. Implication: Companieswithin the industry have to reinvest and spend huge capital in Research and Development to scientifically test their products and ascertain the various dietary components of food, for healthier food. ReInvestment means spending disposable income.Disposable income is the income that comes after subtracting total personal income from personal current taxes. The quantity of ingredients for making food must be constant as per what was given for testing its calorie content. For Example: Food Standards Agency recommended a principlebased approach for the provision of voluntary FOP- Front OF Pack nutrition labelling to help consumers see at a glance the levels of fat, saturated fat, salt and sugars in foods sold through retail outlets and help them to make healthier choices. FSA 10 MARCH 2010 http://www.food.gov.uk/multimedia/pdfs/board/fsa100307.pdf http://news.bbc.co.uk/1/hi/health/4986960.stm 'Our fast food giants under pressure to calorie label as they do in America.' KFC and Pizza Hut maintain the nutritional information is currently available in UK stores and online. http://www.dailymail.co.uk/news/article-1067449/Our-fast-food-giantspressure-calorie-label-America.html#ixzz0ldSnYIgZ

Economic :GNP trends, economy trends, disposable income, interest rates, taxation specific to product/services, business cycles, distribution trends and market routes,employment, inflation, interest and exchange rates, etc. which will affect the formation of competition prevalent in the market and capital are certain macroeconomic forces that creates impact on business operation. Employment has been one of the major factors discussed widely. Employment is any paid occupation. At the peak of recession from 2007-09, when most of the industries showed economic decline, the fast food industry was the only one which had a positive impact having an upward trend in the financial graphs as consumers preferred to eat fast food and take away as an alternative to spending in expensive restaurants to cut down on personal expenses. Implication: There is a terrific increase in employment within the fast food industry proving Britain as the fast food nation. For Example: Fast food chain KFC plans to defy the high street gloom by creating 9,000 jobs as consumers try to eat out for less. http://www.telegraph.co.uk/finance/4633950/KFC-creating-9000-jobs-in-newoutlets.html http://www.guardian.co.uk/business/2009/feb/16/fooddrinks-recession The pizza delivery service Domino's recently announced that its sales for last year had increased by 10 per cent. http://www.independent.co.uk/news/business/news/domino-effect-anotherfastfood-boost-1624128.html http://www.euromonitor.com/Still_expanding_UK_pizza_market_offers_profi t_serious_insights_for_global_operators

Social :The sociocultural environment is of particular concern to marketers as it directly implies on their costumer behaviour which is the driving force.It has to do with the demographic structure of marketsand the way in which attitudes and opinions are being formed. Lifestyle trends in the UK (rising incomes, longer working hours, more working mothers, time-poor/cash-rich parents) tend to support a 'convenience food culture' and the increased consumption of Fast Food. This enormous consumption of junk food has lead to major concerns for parents on obesity of children. Obesity is when a person is carrying too much body fat for their height and sex. A person is considered obese if they have a body mass index (BMI) of 30 or greater. National Health Services http://www.nhs.uk/Conditions/Obesity/Pages/Introduction.aspx Most parents believe that the rules of attractiveness targeting advertising to children telecasted on television need to be changed.There was very less support for outright ban, butresulting to protests and public articles by NGO s and social workers creating awareness of health hazards,the UK parliament had to take a firm step on issuing a bill to the FSA- Food Standards Agency with the purpose of implementing stern measures on fast food companies. United Kingdom Parliament: http://www.publications.parliament.uk/pa Implications: A major change had to be made in an advertising strategy that has to consistently focus on taste, value, and convenience, which incurs additional investment for branding in marketing strategies.

For Example: McDonalds television commercials in Britain highlight the health benefits of items such as fruit bags and pasta salad. McDonalds and Frito-Lay have implementedstrategic moves to remove heavy and reduce saturated fats in french fries, chips, and other products. Health Affairs : http://content.healthaffairs.org/cgi/content/full/22/6/207 The new healthier eating campaign has had quite an effect on the fast food market as a whole.

Technological :Technology has always played an important role in the development and enhancement of products and services which further enables industry prosperity. Technological factors include government spending on research, government and industry focus on technological effort, new discoveries, speed of technology transfer, rates of obsolescence. New discoveries in technology like SAP(Business Information Systems) have lead faster bill processing, faster delivery of food and global tracking systems that has enabled convenience and would soon allow the top management to pull out hourly sales and turnover information in just one click . Cash less payments at drive thru and online buying improve business operations run in a much more efficient and reliable method. Implications: Technology enables to reduce the average complaint response time identifying the issues before they become a problem.

For example: The introduction of QUALITYnet, an internet based system, that gathers and assimilates quality assurance data which also includes complaints from the field operators and directly uploads information to the systems web host. This information is directly accessible by Subways Independent purchasing Cooperative (IPC) who can immediately act of issues related to quality. https://www.ipcoop.com/en-us/1/Page.aspx?p=14 http://www.qsrmagazine.com/issue/91/Applied_Technology-1.phtml http://ipca.biz/qualitynet.php

Conclusion: The UK has a massive potential fast food business prospects considering the current and past industry trends. It has been proven to be a recession proof industry and worth investing in, considering the acceptably affecting factors that are outlined in the PESTEL analysis.

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