Reference no: EM131921514

Question 1:

The first step in the life circle of the business is the emergence stage, the stage where the new companies introduce the new products to the world. If we try to think how the fast food industry were look like in its emergence stage we can think about three main characteristics that includes: lots of research and development, uncertainty about the market, and many small competition. In the first steps of the fast food industry it had to do a lot of research about the food it want to produce, the costumers that it will have and try and develop a big variety of food to see what the consumers will like more. Other think that unique to this stage, is the fact that it is hard to predict how the market will react to the new product, that is mean that at the first steps of the fast food industry in was not clear if the consumers will or will not like the new style of food.

Lastly, at the emergence stage there are a lot of new entrance that try to win a good position in the market and be better then others. The competition in this point is very high, the companies try very hard to be better and chipper then others to survive this period.

The next stage in the business life circle is the growth stage, the business is already going, you have customers and market demand, and business is taking off. In this stage, the fast food industry had low prices, growing sales and product appeal to the wider market. Companies tried to keep their prices as low as they can to attract the consumers and to win the price competition among the competitors. Also in the growth stage when the consumer are all ready familiar with the new product the companies had sales grow, and started to be more profitable then in the emergence stage. Other thing that exclusive to the growth stage, is that the fast food companies tried to became bigger and introduce themselves to the wider market. Big companies like McDonald's tried to enter into other markets around the world and became global. Lastly, going global is not the only way how the companies tried to appeal to the wider market, also companies tried to develop more variety of food, like healthy food to suits to the changing needs of the costumers.

Question 2:

In our days it is clear that the fast food industry is in the maturity stage: the competition is high, the sales volumes have already peaked, industry market shares are decreasing overall and, in some regards, the profits are starting to decrease. As we can see from the case giant global companies like McDonald's spend a lot of many on advertising what make it harder to small business to enter and success in the industry. As well as the wars on the place in the market, they also have price wars and the competition intensifies. Each company try to make improvements in their products and in the same time charge less price then other companies. Other thing that the fast food companies do to win the competition is by making "high-price specialty items" to take the consumers and to distance them from the other companies. The companies try to increase their profitability by encourage the consumers to buy more items, like drinks. In addition, companies try to produce new healthy food to fit in to the chancing consumers needs, and to stay one step ahead of the competitors. For this reasons it is clear to understand that the fast food industry are in the maturity stage.