INTRODUCTION

Fast food is the term given to food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with preheated or precooked ingredients, and served to the customer in a packaged form for take-out/take-away. The term "fast food" was recognized in a dictionary by MerriamWebster in 1951. Outlets may be stands or kiosks, which may provide no shelter or seating, or fast food restaurants (also known as quick service restaurants). Franchise operations which are part of restaurant chains have standardized foodstuffs shipped to each restaurant from central locations. "Over the last three decades, fast food has infiltrated every nook and cranny of American society. An industry that began with a handful of modest hot dog and hamburger stands in southern California has spread to every corner of the nation, selling a broad range of foods wherever paying customers may be found. Fast food is now served at restaurants and drive-thru's, at stadiums, airports, zoos, high schools, elementary schools, and universities, on cruise ships, trains, and airplanes, at K- Marts, Wal-Marts, gas stations, and even at hospital cafeterias. In 1970, Americans spent about $6 billion on fast food; in 2000, they spent more than $110 billion. Americans now spend more money on fast food than on higher education, personal computers, computer software, or new cars. They spend more on fast food than on movies, books, magazines, newspapers, videos, and recorded music -- combined." (Fast Food Nation) If there was an industry with demand and plenty of options to enter the market, the fast food industry is an optimal choice as we will show in this report.

History and Economic features of industry This industry is nothing new to our economy. The fast food phenomenon evolved from drive-in restaurants built in southern California in the early 1940s. With the rising popularity of cars, entrepreneurs designed restaurants that let people order and eat without leaving their vehicles. "Then, in 1948, they decided to try something new: they simplified the menu so that there was nothing that required a knife, spoon or fork; they replaced all the crockery and glassware with disposable cups, plates and bags; they dispensed with waitresses, bus boys and carhops, leaving

customers to come to the counter to order and collect their food; and, most importantly (so far as the concept of fast food is concerned), they divided the food preparation tasks into a production line." In the post-World War II period in the United States, McDonald's and other fast food restaurant chains rapidly gained a reputation for their cleanliness, fast service, and a kid friendly atmosphere where families on the go could grab a quick meal and avoid hassle of cooking. "Prior to the rise of the fast food chain restaurant, people generally had a choice between greasy spoon diners where the quality of the food was often questionable and service lacking, or high-end restaurants that were expensive and impractical for families with children." Fast food restaurants rapidly became the eatery "everyone could agree on", with many featuring child-size menu combos, play areas, and whimsical branding campaigns, like the iconic KFC, designed to appeal to younger customers. The fast food industry gave parents a chance to enjoy some time alone while the kids played with their toys or in the play areas provided in the restaurants.

The fast food industry has witnessed tremendous growth over the last few decades. The US fast food industry now employs two million workers in the United States, and is considered to be a major asset to the US economy. In 1970, Americans spent $6 billion on fast food - and this amount increased to $110 billion by 2000. If the estimated figures for the last 10 years are added, the future of this industry becomes even more promising. According to the fast food industry statistics, "this industry experienced an overall growth of 4.8 percent in 2006 alone." US fast food industry has reported remarkable growth despite being severely affected by the economic turmoil. "In the US, consumers consume more than half of their food in restaurants. Fast food is an important segment of the restaurant industry and the growth of this segment is outpacing the growth of overall restaurant industry", says US Fast Food Market Outlook 2010. The fast food market is forecast to maintain its current growth expectations, which means it is expected to drive the market to a value of $57.6 billion by the end of 2010, an increase of 12.1% since 2005. "Drivers of growth include increasing numbers of Americans in the workplace, which reduces the amount of time spent on preparing meals at home. In 2010, the United States fast food market is forecast to have a volume of 37 billion transactions. This represents an increase of 5.3% since 2005." The key players in the global fast

food industry are McDonalds, Burger King, Yum! Brand, Wendy's, and Subway. Each is briefly listed below with comparable revenues in industry in Exhibit A:

1. McDonalds : Located in 126 countries and on 6 continents, the largest in the industry, and operates over 31,000 restaurants worldwide consisting 60% of sales overseas. In 2010, they had a revenue increase of 5.86%. Part of this increase is from the 541 new restaurants opened in 2010, and 5% global comparable sales growth in 2010 marks the 8th straight year of such increases.

2. Burger King : Has more than 11,100 restaurants in more than 70 countries and is the second largest fast food hamburger restaurant chain in the world. The company generated $2.5 billion in revenue in 2009. 38% of operating income is in international sales.

3. Yum! Brand : Collects 50% of sales from overseas and also owns A&W, KFC, Long John Silver's, and Taco Bell and Pizza Hut. The worlds largest restaurant company in terms of units with approximately 33,000 restaurants in more than 100 countries and territories.

4. Wendy's : Has 6,576 restaurants, of which 1,394 were owned and operated by the company and others are franchised and located in 21 countries. $2.4 billion in sales in 2010, with a 0.6% decrease in North American same store sales. They are also looking to expand its presence in the international space. The company seems to be behind its competitors with only 814 international units total.

5. Subway : One of the fastest growing franchises in the world with approximately 34,447 restaurants in 97 countries as of 2011 and earns $15.2 billion in revenues each year.

Exhibit A Company McDonald's (MCD) Starbucks (SBUX) Revenues (M) Net Income (M) Net Margin Restaurants Franchised% $22,745 $4,551 $1,083 $391 $372 $79 20.0% 10.0% 4.0% 5.2% 2.2% 0.1% 7.9% 5.3% 3.4% 5.7% 6.4% 32,478 37,000 16,635 1,773 1,689 6,451 11,925 2,212 3,141 9,339 1,380 47% 0% 40% 80% 88% 46% 71% 91% 58% 81%

Yum! Brands (YUM) $10,836 $9,775

Darden Restaurants (DRI) $7,218 Brinker International (EAT) $3,621

Wendy's International (WEN) $3,581 $4 Burger King Holdings (BKC) $2,537 $200 Jack in the Box (JACK) $2,471 CKE Restaurants (CKR) $1,419 Domino's Pizza (DPZ) $1,404 Panera Bread Company $1,353 $131 $48 $80 $87

Data from company FY 2009 annual reports (CKE data from FY annual, ended January 31, 2010

2. PESTLE

PEST is macro environmental scanning tool which is very helpful to scan environment. But the model has been recently extended furthermore now it calls PESTLE analysis which provides more efficiency towards scan the environment for future strategic planning. PESTLE stands for Political, Economical, Socio-cultural, Technological, Legal, and Environmental, and it is very useful tool for develop new planning.

The following framework provides an analysis of the external international marketing environment, relating to the fast-food industry: Political Global fast-food firms must comply with country-specific political requirements, such as national minimum wage regulations, affecting costs. Hygiene and quality regulations vary significantly between nations and may influence the quality of products provided by fast-food outlets (FDA, 2012). Different countries set varying regulations regarding labeling and packaging. For instance the UK government pressured firms to promote healthy eating, and several fast-food companies have voluntarily included calorie information on their products BBC, 2011). Economic Despite the 2008 recession and the resulting decrease in consumer confidence across the globe, average consumer fast-food spending has increased (The Economist, 2010) due to convenience and low-cost. Consumers are still looking for the convenience of eating out, but are drawn to the low prices of fast-food over table-service restaurants (Financial Times, 2009). Many fast-food chains have capitalized upon the recession by introducing new deals in addition to their already low-priced menus. Between 2005 and 2010, Latin America, Asia Pacific, Eastern Europe and Russia accounted for 89% of global growth in the fast-food industry (Passport, 2012).

Social Increasing consumer awareness about healthy life styles has pressured many fast-food players to offer healthier selections within their menus (BBC, 2011). This includes offering low-calorie options and salads alongside burgers, and prominently displaying nutritional content. The fast-food industry has also been heavily criticised for targeting young children by including toys within childrens meals (New York Times, 2003). Recently in the UK, the broadcasting of junk food adverts during commercial breaks in childrens programmes has been banned (BBC , 2007), following increasing childhood obesity.

Technological As consumer familiarity with new technology increases, fast-food firms are using channels such as social media websites to engage with their customers. For example, McDonalds is the 9th most liked brand on Facebook (CNBC, 2012) . Additionally, digital displays allow outlets to change their menus efficiently, to suit the time of day (NRA, 2012) and self-service ordering points have increased service speed and reduced labour costs.

Environmental Environmental lobbyists and governments are pressuring the fast-food firms to become more green (Greenpeace, 2012). Rainforests are being destroyed to increase the area of land for beef production to meet the demand for beef-burgers (Kline, 2007). Recycling is prominent global issue and in response, McDonald's adopted recyclable packaging . Increased environmental awareness among consumers provides firms with a significant opportunity to position themselves as greento garner customer loyalty (National Pollution Prevention Centre for Higher Education, 1995).