An evaluation of the strengths, weaknesses, opportunities, threats and trends in the business environment in which the business operates provides an avenue for the growth, and the development of the business in regard to decision making based on the SWOTT aspects affecting the business in one way or the other. According to Kessler (2013, p. 814) such an analysis is particularly “based on brainstorming activities by stakeholders such as customers, investors employees and other knowledgeable parties in an attempt to develop strategies for the future direction of the organization.” Daily Health is a fast food restaurant operating in the fast food business franchise which is dominated by the likes of McDonald’s Burger King, Taco Bell and Pizza Inn among others. In this market there are several advantages and disadvantages that the business Daily Health is presented with these are as discussed as under;
Strengths
The business’ main strength is that it is customer service oriented meaning that it is dedicated to the satisfaction of its customers. Generally, the business is built on the foundation of quality service delivery to customers. In this regard the staff at Daily Health are trained on customer service delivery skills which include meeting customers’ expectations. Moreover, the business has made investments in employee training to equip them with the skills necessary in ensuring that they are capable of addressing certain special needs of the customer to ensure that they are satisfied with the services at the Daily Health store outlets. For instance customers are treated to well when they enter the store which makes Daily Health stores hospitable compared to other fast food stores. Secondly, employees are directed to ensure that the customer is served in a timely fashion ensuring that their orders are not delayed. Similarly, customers are allowed to make complaints which can be addressed by the store manager at any time in an effort to ensure that they are satisfied with the services at the store.
The external environment of operation also presents a strength for the company this is because the legislation in place allows for the growth and expansion of fast food franchises such that they can reach out to more customers. The law allows food businesses to be operated on the move which enables a business such as Daily Health to operate moving vans that sell products to the convenience of customers wherever they are while on the move (Jekanowski , Binkley , & Eales , 2001, p. 58). The second strength in the environment is economical which applies to the higher prices that healthy fast foods fetch in the market. This is majorly because inherent addictiveness of people to fast foods coupled with the growing need to check against increasing rates of obesity has generated concerns among customers for their health (Richards & Patterson , 2007, p. 425). With effect, healthy fast foods are sold at higher prices than the addictive fast foods that are deemed unhealthy.
Another strength of the business with respect to the fast food business is based on ingenuity. There has been a lot of debate regarding the contribution of fast food to the increasing rate of obesity cases in the United States and abroad all over the world. McDonald’s came under fire at one time for increasing cases of obesity due to unhealthy diet (Lassar, 2009, p. 17). To address this the company Daily Health has developed a menu of healthy fast food options for its customers ensuring that customers have a healthy experience with regard to the nutrients that are contained in the food varieties provided. For instance, the company recognizes that certain foods do not appeal to certain groups of people and thus ensure that they tailor their products to meet the expectations of the societies they serve. To the Muslim community for instance pork is not a delicacy that delights. Daily Health ensures that its stores that serve predominantly Muslim communities do not have pork meat in their diet. Similarly, Daily Health recognizes that the Asian community is predominantly vegetarian, in this regard all store outlets that serve clients from the Asian community are made to provide diets that are free of meat especially beef and pork.
Weaknesses
The business being a startup business in the fast food business faces quite stiff competition from industry players who have dominated the fast food business such as McDonalds, Burger King, Taco Bell and Pizza Inn among others that have established themselves in the industry. Moreover, chain stores such as McDonald’s present quite stiff competition for Daily Health given that they have their own brand of healthy fast foods which are a favorite to many fast food lovers. McDonald’s specifically noted a challenge in the Indian market being predominantly vegetarian and hence decided to create a special menu for McDonald’s India which is composed majorly of a vegetarian diet (Lassar, 2009, p. 4).
Threats
The fast food business majorly employs workers on a contract basis where they are usually paid casually on minimum wage depending on the hours worked. Recently there have been provision in the law to move the minimum wage up from $4.25 to $5.05 (Card & Krueger, 1994, p. 772). This places pressure on the start u business in terms of operational costs hence for the development of the business it is necessary that costs of operation are kept low to ensure the profitability of the business. Nonetheless, the business can explore measures for saving costs such as hiring less staff to cut on overhead costs. Similarly, the Daily Health fast food restaurant as mentioned earlier is established in an environment where the fast food business is dominated by major long standing players and brands such as Burger King and McDonald’s which present quite stiff competition for the business.
Opportunities
There is a couple of avenues that serve advantageous to the development of the development of the business. For instance, market analysis reveals that fast foods are a favorite for many and, therefore, the market remains rife. The extensiveness of this market is backed by the variety of food products that different food chains present and that certain customers have developed loyalty for the fast food products (Richards & Patterson, 2007, p. 445). In this regard, the best option for a business to develop customer loyalty lies in its customer service commitment. In ensuring that customers receive quality services, a business can be able to develop a customer base of loyal customers differentiating it from other fast food restaurants on the basis of high quality services that they offer.
The law in regard to the unrestrictive ties on the movement of food gives the Daily Health fast food business an edge in terms of avenues to venture into. The business can explore differentiation from established fast food stores who have concentrated on the establishment of fast food outlets in different populated areas. The Daily Health business can thus employ the use of caravans to reach out to customers at their convenient locations while going about their businesses. Hence, Daily Health can be able to tap the untapped market which is mostly based of customers who are reluctant to visit fast food stores or simply lack the time to do so (Jekanowski, Binkley, & Eales, 2001, p. 58).
Trend
The developments in the fast food industry are as well a force to be reckoned with in the Daily Health business activities. For instance, there have been calls among health care givers and nutritionists on the worrying trend of increased incidences of obesity in the country. These concerns have been directed towards the fast food industry which has been blamed for playing a central role in the development of increased cases of obesity in the country (Lassar, 2009, p. 59). With effect, this places pressure on the entire industry at large in regard to ensuring that fast food products provided are of healthier standards to meet the expectations of customers with respect to the concerns raised by healthcare givers and nutritionists on the matter.
Secondly, there are a myriad of promotional modes that fast food franchises are employing to gain and maintain their customer base in the ever competitive fast food business. Some modes of promotion have been criticized for increasing the prevalence rate of obesity as they serve to encourage consumption of fast food products (Chou, Grossman, & Rahad, 2006, p. 3). Nonetheless, the industry continues to be competitive and hence the necessity for the development of promotional activities that serve to improve the sales of the products in the institution is paramount if a business is to remain competitive. Therefore, the Daily Health business cognizant of this need to develop a competitive edge through promotion of its products will develop strategies such as point of sale promotions to boost the volume of sales. Examples of the approaches used in the sales promotions bid include; samples, gifts and one for half price offers. In the end, Daily Health will ensure its competitiveness in the industry in line with the developments in product promotion activities.
Summary of SWOTT Analysis
An overview of the strengths weaknesses, opportunities, threats and trends in the fast food industry reveals numerous advantages and disadvantages that the company Daily Health has to contend with. The company’s strengths lie in its customer service delivery ensuring customer satisfaction that differentiates the company from the competition. Moreover, the company is committed to meeting the customers’ needs that have led it to explore ways of providing niche dietary solutions to provide meal options for specialized categories of populations. However, the business also faces stiff competition in the industry owing to the crowded nature of the fast food business.
There are also concerns about the health problems related to obesity that fast food products have been blamed to propagate. These among other advantages and disadvantages as presented provide a comprehensive SWOT analysis of the business environment in a fast food industry which Daily Health operates in. This analysis presents the management with an overview of the viability of the business enterprise in regard to decisions made on investments and expenditure on the operations of the business in regard to its profitability and competitiveness.
References
Card, D., & Krueger , A. B. (1994). Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jearsey and Pensylvania. The Economic Review, 84(4), 772 - 793. Retrieved 6 25, 2014, from http://davidcard.berkeley.edu/papers/njmin-aer.pdf
Chou, S.-Y., Grossman , M., & Rahad , I. (2006). Fast-Food Restauraunt Advertising on Television and Its Influence on Childhood Obesity. National Buereau of Economic Research. Retrieved 6 25, 2014, from http://www.aeaweb.org/annual_mtg_papers/2007/0106_1015_2004.pdf
Jekanowski , M. D., Binkley , J. K., & Eales , J. (2001). Convenience, Accessibility, and the Demand for Fast Food. Journal of Agricultural and Resource Economics, 26(1), 58 - 74. Retrieved 6 25, 2014, from http://ageconsearch.umn.edu/bitstream/31162/1/26010058.pdf
Kessler, E. H. (2013, May 8). Encyclopedia of Management Theory: SWOT Analysis Framework. SAGE Publications . Retrieved 6 25, 2014, from http://www.sagepub.com/gray3e/study/chapter3/Encyclopaedia%20entries/SWOT_Analysis_Framework.pdf
Lassar, W. (2009). McDonald's Ongoing Marketing Challenge: Social Perception in India. Online Journal of International Case Analysis, 1(2), 1 - 19. Retrieved 6 25, 2014, from http://ojica.fiu.edu/index.php/ojica_journal/article/viewFile/19/18
Richards , T. J., & Patterson , P. M. (2007). Fast Food Addiction and Market Power. Journal of Agriculture and Resource Economics, 32(3), 425 - 447. Retrieved 6 25, 2014, from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCEQFjAA&url=http%3A%2F%2Fwww.researchgate.net%2Fpublication%2F23942659_Fast_Food_Addiction_and_Market_Power%2Ffile%2F5046351e58ce64aefc.pdf&ei=l9KqU8ufCKKw7Abpn4GIAg&usg=
