INDUSTRY ANALYSIS

FULL SERVICE RESTAURANTS

BY TEAM PARADIGM PIRATES

WHAT WE WILL COVER

• Quick Overview of Industry

• Summary of Forces Affecting the Industry

• What Works

• Industry Attractiveness

INDUSTRY OVERVIEW• Over 200,000 individual establishments across the nation

• Generating about $190 Billion in Annual Revenue

• Segmented Industry

• Mom & Pop or Multi-National Conglomerate

• Mature Growth Stage

• Highly competitive

• No clear dominance in the industry

• Top 4 companies make up just 8% of market share

INTERNAL FORCES AFFECTING THE INDUSTRY• High Threat of Substitutes

• Competitive Rivalry is Intense

• Threat of New Entrants

• Buyers Have the Power

• Macro-Environment

• Low Power of Suppliers

• Political

• Economical

• Influences of Fluctuating Economy• Socio-Cultural

• Health Conscious Consumers• Technological

• Legal

• Licensing, Health Regulations• Environmental

EXTERNAL FORCES AFFECTING THE INDUSTRY

WHAT WORKS• Economies of Scale

• Cost Management

• Differentiation

• Are we really selling just food?

HOW DO YOU FAIL?• Zone of Competitive Battle Rests in the Garden of Eden

• Hard to control costs• With a saturated market,

differentiation is

extremely difficult

Zone ofCompetitiveBattle

Danger Zone

DeathValley

Relative Differentiation

LOW HIGH

HIGH

Relative Cost

INDUSTRY ATTRACTIVENESS: PROS•Low Barriers to Entry

•No Dominant Firm

•Low Cost of Capital

•Expected Future Growth

INDUSTRY ATTRACTIVENESS: CONS •Highly Competitive

•Market Saturation

•Mature Stage of Life-Cycle

•Slim Profit Margins

•Difficult to Manage Costs

DO WE WANT TO PLAY THIS GAME?