2.

2 Porters Five Forces: (Industry Analysis) The companys operation is driven by the industry in which the company is getting involved. Fast food industry has grown rapidly in spite of the decline of economy. This leads to a wide open door for fast food sectors to grow more in the future. According to Porter, there are five forces, which influence the competition level of an industry, in which each company has to take these forces into account in order to catch up with or take over the competitors in the same industry. The five forces are rivalry among existing competitors, the threat of new entry, the power of supplier, the power of customers, and the threat of substitutes. (Porter, Michael E 1980)

Rivalry among existing competitors:

BBQ-Chicken is located in nine different locations in Singapore. One of the outlets is present in heartland mall Kovan where BBQ is located adjacent to the McDonalds, KFC and subway. The Rivalry among these existing competitors are very intense because they are the global leaders in fast food industry; McDonald that established in the late 70s in Singapore, while McDonalds leads with 113 restaurants, KFC is second with 75 (statistic of 2008). In addition, when there is consideration of junk food intake, Subway comes up with the new strategy; eat fresh, the company focuses more on customers health by providing healthy meals and a wide range of choices. (Seyhan Sipahi June 2010) Even though, BBQ also introduced its fresh and healthier menu by using only pure olive oil for cooking, the chance of taking over the fast food market share in Singapore is very difficult and it is a long-run plan. BBQ chicken has only nine outlets and most of its location is not well-known area in Singapore except some like Kovan heart mall and Tampines central. They need to add more value as well as concentrate on its competitive core to overcome these global big players. (About us BBQ-Chicken Singapore 2011) Threat of new entry:

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Threat of new entry is high but competing with huge investment is very low. Despite of the economic crisis, fast food industry seems to be a recession-proof because new retail chains are increasing all over the world especially in emerging markets. (Glimmers amid the gloom 2009)Therefore, possibility of new entries coming to the market is very high because of the bright potential of this industry to earn more profit and the barriers to the entries are also very low. The threat of new entries is one of the biggest forces, which influences the companys operation as well as the market share. With the state of art technology and the changing in customers tastes, new organizations can come up with new nutritious meals and different in ingredients to attract the market. Even though BBQ has a strong financial background they are very new to this market hence new competitors are really a big threat since they take over considerable amount of market share. (Food and beverage work group report 2002)

The power of suppliers:

The bargaining power of the supplier remains low in this

industry. There are no doubt suppliers plays a vital role in influencing the companys business. The shifting in cost or limiting the quality of the product has severe consequences of the operation of the company. However, the ingredient like Chicken, potato, Drinks, Egg, and breads etc for this industry has not changed and the company can switch on other suppliers, which do not cost them much because of the presence of large amount of field suppliers if they find the fall of quality of raw materials as well as delivery system any company can shift their suppliers. (Glimmers amid the gloom 2009). BBQ buys large quantity of raw material from the suppliers. Therefore, the suppliers power remains low regardless of fast food industry. (Cole Ehmke & Joan Fulton 2009) The bargaining power of the customer is less in this industry. Buyers rarely have the power over the food price because the cost for this market is fixed and there is hardly low cost shifting. The customers can choose substitutes or other restaurants when they cannot afford or are not satisfied with the cost. Especially in Singapore Since it is a mass market for fast food Industry individual customer cannot bargain for the prices. (Glimmers amid the gloom 2009) The power of buyers:

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According to Cole Ehmke & Joan Fulton the bargaining power of the customers will increase only when they purchase large quantity out of the total sale and this is not the case in BBQChicken. They also argued that if the demand for the product is more then, the power for the buyers will automatically reduce and as all know the Singapore has the very fast pace environment where the demand food fast is very high which is a very favorable condition for BBQ-Chicken. Another important factor which influences the bargaining power of the buyer is loyalty. The loyal customers usually bargain the suppliers, since they provide constant business to them. But in this industry the loyal customers are very less and hence the demanding power also less. (Cole Ehmke & Joan Fulton 2009) Threat of substitutes is always high in food industry. The concerns of health problem, which somehow means avoid consuming fatty and high cholesterol food, may switch the customers to the substitutes. The presence of substitutes is obvious and always, and it varies from cooking at home, convenience stores, casual dining outlet and so on. Furthermore, customers can find the same kind of products from the food courts or vendor shops with cheap prices, which is very popular in Singapore. (Glenn Smith 2008) The increasing in growing individual health consciousness, as well as the atmosphere is more important to the customers than the food only itself. Providing reasonable priced food, good ambiance, and professional in services lower the threat of substitutes. BBQ chicken is facing many obstacles from the industry outlook point of views. However, since the slowdown of global economy, consumers have considered price and convenience food, and with fast food they have many options of the availability of lower priced food, plus the younger generation easy to follow new trends of food consuming, there are many opportunities for BBQ Chicken to expand its business by understanding its customers need as well as its competitors. The threat of substitutes:

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2.3 SWOT analysis SWOT-analysis is the key method which illustrates the internal and external environment needs to be analyzed carefully for the company in order to develop the existing strengths and to eliminate the weakness as well as to take the opportunities from out of the company and reduce the risk from the industry. Strength:

Having fifteen-year experience, BBQ Chicken is holding a very strong reputation for its wellknow chicken restaurant brand in Asia and worldwide. There are 4,000 international stores in the world with strong financial support from their parent company BBQ Korea. In addition, the company has created its own ingredients, especially; it is the first company in the world to use 100% pure olive oil is only for cooking, which concern more about customers health since they have awareness of health problems by consuming more fast food. Beside the fried menu, BBQ Chicken offers the varieties of meal choice. BBQ possess one of the best Logistics departments and it is playing a major role in reducing the expenses of BBQ. There are many researches which are taken by BBQ Chicken food specialists at Chicken University. (About us BBQ-Chicken Singapore 2011)

Weakness:

BBQ Chicken is using Korean receipts which cannot be taken by some customers because of its spicy and different tastes. In fast food industry, the brand image of BBQ Chicken still stands very low in comparative with other major fast food players such as KFC, Mac Donald or Subway. There are very few outlets (Nine outlets) in Singapore and they are not located in the main shopping districts or business hubs. Even though, there is a range of meal choice, the food items are very limited and the company does not install online delivery system. Plus, no social activities (CSR) have been taken by the company so far, which can enhance its brand recognition. (Svetlana Rodgers 2008)

Opportunity:

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Fast food industry does not depend so much on the economic situation. Busy life creates a great chance for this industry to develop because this offers ready-to-eat food in a wide range of food kinds and food price. Low royal customers are one of the fast food industry character; they can easily shift towards other fast food brands. The new trends of eating habit by taking more healthy food is also an opportunity for the company to stick with its providing better nutritious food. Moreover, Singapore has inaugurated resort world and other new shopping centers along with some more upcoming buildings and resident areas, which draw more tourists to come. That means the market for BBQ Chicken is very huge.

Threat: Mac Donald, KFC, Burger King and Subway are still holding the main strong players in Singapore fast food market since their strong brand recognition and the innovation in creating new menu. Furthermore, Chicken restaurant brands have been introduced such as Nandos, Wendy and some other brands in Singapore. Not only those companies threatening the BBQ Chicken market share but also other substitutes like home-made food and local foods where customers shifts easily. (GlennSmith 2008) Understanding and having close eyes on the industry competition help the company organize and implement the marketing strategy in the effective way. Swot analysis leads the way for the company to evaluate its potentials inside the organization and its external factors, risk and chance, which result in companys operation and objectives. To make use of its strengths and opportunities to lower its weakness as well as threats for the company to achieve goals and for BBQ chicken to keep up with the vision as becoming number one corporation in the world. 2.4 Porters Generic Competitive Strategy Successful business, is not about understanding the internal as well as external environment, it is more about which strategy the company should come up with through its present circumstance and the existing industry situation. (Porter, Michael E 1980)

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According to Michael Porters Generic Strategies, there are two main focusing fields each company should keep up with: Low cost Product uniqueness

Fast food industry, with the saturation condition in Singapore and its different characteristics, the company should concentrate more on low cost leadership strategy so that it can go beyond its competitors. From the Analysis and study of the BBQ Chickens strengths and its opportunities situation, the company is looking for the right efficient strategies to expand the market share and profit.

Cost leadership strategy In the profit and market share point of view, cost reduction is very important and necessary. (Cliff Bowman 2008) This strategy requires to facilitate efficiently accompany by controlling and reducing cost, which drives the company to re-engineer and re-structured its organization and how to use its cost advantage while its operation still gains acceptable profit. (Blocher, Stout, Cokins, Chen 2008) Low cost leadership sustains the competitive advantages regarding the fast food industry characteristics. Logistic is one of the main terms on cutting cost. Sales, marketing research can be centralized but the material and supply chain can be decentralized depending on each operation regions or countries in order to minimize the cost of producing products and cost of operating. (Porter, Michael E 1980) According to Porter, Michael E (1980), most of the companys which are successful with Cost Leadership Strategy are because of their internal strength are strong financial back ground with full access to its financial asset for the investment in production, many companies fails because of lack of financial background. They employ latest technology and skilled employees to support the efficient and cost effective production of their core product. They are expertise in the manufacturing of the product. They hold excellent logistic supports to reduce maximum expenses.

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From the SWOT Analysis of BBQ-Chicken it is evitable that they pass all the criteria which are mentioned by Porter. BBQ Chicken has run its business only fifteen years. However, with the support of advance technology and earning experiences from its competitors, BBQ Chicken understands the situation by offering healthier food with affordable price to draw more and more customers with the help of cost reduction in supply chain since customers consider the price because of the global economic slowdown. (Svetlana Rodgers 2008)

Risk of cost leadership strategy There is every possibility that other companies are able to duplicate and implement the lower costs and they also can cost control. Sometimes customers may refuse to take the food because of low cost means low quality mind set which leads to the risk of losing customers.

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3. Conclusion: From the analysis of Porters five forces, the strong rivalry for BBQ-Chicken restaurant are McDonalds, KFC, and Subway and the threat of new entrant is very high since food industry is a potential market in Singapore. The bargaining power of the supplier is very low because BBQchicken Company has the ability to order more quantity to a single supplier and also has many suppliers in the market to switch. The bargaining power of the buyer is less since there are no loyal customers in fast food industry and the demand for fast food is high in Singapore. Threat of Substitutes is found to be very high because food industry is a mass market and Singapore has wide range of cuisine available in Market. From the SWOT analysis the major strength of the BBQ-Chicken is their brand reputation of Chicken food in Asian Market, strong financial background, certified as healthy food. The prime Weakness of BBQ is all their cuisines are Korean style sometimes it may affect the new market and they are still new to Singapore market. From the analysis BBQ Chicken has plenty of opportunity in Singapore since it is identified as a potential market for fast food industry because of the life style. Biggest threat for them is their competitors since they are global players. With the help of Porters generic strategy and from the result of the Porters five forces and the SWOT analysis of the BBQ, Cost leadership strategy is evaluated and found that apart from the risk mentioned BBQ has to reduce their price to stay competitive in this saturated market to gain comfortable market share.

4. Reference:

1. Seyhan Sipahi (June 2010), Expanding Operations in Fast-Food Industry under

Uncertain Market Conditions, International Journal of Trade, Economics and Finance, Vol. 1, No. 1, 2010-023X

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2. GlennSmith (2008), Changing consumer tastes are creating new challenges for brands
in the city-states crowded food market, Fast food battles to retain its slice of Singapore, Analysis 5

3. Glimmers amid the gloom (2009),The outlook for the retail and consumer products
sector in emerging markets, PricewaterhouseCoopers

4. Food and beverage work group report (2002), Economic review committee subcommittee on domestic Enterprise

5. Svetlana Rodgers (2008), Technological innovation supporting different food production

phiosophies in the food serivice sector, International Journal of Contemporary Hospitality Management Vol. 20 No. 1, 2008 pp. 19-34.

6. Russell Davision (2006), Enterprise resource planning (ERP) 7. Cliff Bowman (2008), Generic strategies: a substitute for thinking? The Ashridge Journal.

8. Porter, Michael E (1980), Competitive Strategy: Techniques for Analyzing Industries and
Competitors.

9. Blocher, Stout, Cokins, Chen (2008), Chapter 1: Cost management and Strategy, Cost
Management.

10.

About us BBQ-Chicken Singapore (2011), Website Content [online] available

from<http://www.bbq-chicken.com.sg/abt.php>

11.

Philip Kotler (1975) Marketing Management, Analysis, Planning, and Control,

Prentice Hall, (3rd edition)

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