Environmental Scanning: External AnalysisEssay Preview: Environmental Scanning: External AnalysisReport this essayMODULE II: ENVIRONMENTAL SCANNING: EXTERNAL ANALYSISI. INDUSTRY ANALYSISA. Definition of the IndustryDefinition:The hotel and restaurant industry definition used in this study follows the Philippine Standard Industrial Classification (refer to Table 1). The industry is disaggregated into two sub-sectors: hotel and restaurant.
The hotel sub-sector includes the various lodging units of different sizes and standards located both in urban and rural communities.Table 1. Hotel and Restaurant Industry Definition based on the PSICPSIC Code Description98 Restaurants and Hotels981 Restaurants, Cafes & Other Eating & Drinking Places9810 Restaurants, Cafes & Other Eating & Drinking Places98101 Restaurants and Cafes98102 Refreshments and Ice Cream Stands, Kiosks & Counters98103 Day and Night Clubs98104 Cocktail Lounges and Bars Operation982 Hotels, Motels & Other Lodging Places9820 Hotels, Motels & Other Lodging Places98201 Hotels and Motels98202 Dormitories98203 Pension HousesSource: National Statistics OfficeThe restaurant sub-sector, on the other hand, includes places that serve food and drinks, be it self-service or full-service. This covers a range of services including fine dining specialty restaurants, fast food outlets, canteens, and food courts. Fine dining and specialty restaurants offer a wide variety of international cuisines. Meanwhile, so-called fast food restaurants usually operate in chains or as franchises, are heavily advertised, and offer limited menus-typically comprising of hamburgers, hotdogs, fried chicken, or pizza and their complements Ð- likewise originated in the United States. Fast foods have the advantage of speed, convenience, and familiarity to diners who may eat in the restaurant or take their food home. In the Philippines, about 80% of the establishments in restaurant industry belong to the fast food sub-sector.
B. Industry CharacteristicsMarket SizeAnnual Revenue as of December 2005 is Php 2,129,637,000.Scope of Competitive RivalryCompetition is fierce in the restaurant industry, particularly the fast food sub-sector. The market is large but consumers are price conscious and exhibit brand loyalty. With a wide range of restaurants and fast food
establishments to choose from, pricing schemes and marketing strategiesdetermine market shares. Market strategies of industry players, therefore,aim to achieve two primary objectives: 1) hammer in “value-for-money”concepts; and 2) create brand consciousness and loyalty.Industry Life CycleIndustry Growth RateMAJOR PLAYERSRevenue (Php In 000s)Compounded Annual Growth RateDunkin Donuts893,754,000901,730,000978,102,0000.030517527Mr. Donut659,076,000698,182,000765,023,0000.050944218GoNuts Donuts720,000121,439,000209,164,0005.622950067Hot Loopsthey just started to operate32,794,00087,201,0000.630660445Country Style Donuts78,934,00089,687,00090,147,0000.045271371Source: Securities and Exchange CommissionNumber of Companies in the IndustryThere are about 45,220 restaurant establishments in the Domestic economy catering to the dining requirements of a constantly expanding market. An estimated 80%, or more than 36,000 of these establishments
Estimated sales growth can be determined from the fact that the number of restaurants in the number of establishments in the country has tripled or decreased over the past decade, mainly in a drive to sell at affordable prices, while also increasing their turnover. If you add up the number of places that are open year round, there are approximately 40,000 more restaurants on the table in that country as opposed to 752,001 total.
Currently, the number of restaurants in the top 10% of restaurant categories, as measured by the ratio of prices to customer orders, is estimated at between 1,300 (the first $8) and 2,300 (the second $4).
In a market where there is strong demand for services, such as restaurant service or hotel management, the demand for a restaurant’s top 10% for the past eight years has grown significantly. This growth has been due to increased demand for new restaurants, which are much more likely to open in the United States. Moreover, as in the previous years, all-star restaurants in the top 10% of restaurants rank the top 5 best performing markets for restaurant orders based on the number of successful locations across the country.
With the opening in August, there are 929 eatery/dinner establishments operating nationwide. For additional information on all the restaurants in the top 10% , visit the websites of McDonalds Inc, McDonald’s Restaurant & KFC Ltd, or Wendy’s Restaurant Group Inc
Other major cities include: Chicago, Chicago-Naperville, Kansas City, Milwaukee, Nashville, Milwaukee-Naperville, Pittsburgh-Marathon, St. Louis, Minneapolis-St. Paul, San Jose, San Diego-Long Beach, San Francisco-Oakland-Alameda, Denver, Baltimore, Chicago, Dallas-Fort Worth, Houston, Dallas-Fort Worth-Cleveland, Cleveland-Long Beach, Fort Wayne-Lakewood-Cleveland, Philadelphia-New York-Northampton, Indianapolis-Malta, Minneapolis-St. Paul-Nashville, New Orleans-Louisville-Memphis, Pittsburgh-Minneapolis-Puyallup, San Antonio-Cleveland-Fort Wayne-Cota, Philadelphia or Dallas-Fort Worth-Cotterill Square is used as the benchmark for each of the ranking factors in the table in the previous section.
The top 10% are listed by country and include all of the leading cities of the country as well as the top restaurants and many other factors. Only McDonalds Inc. currently has locations in the nation and is not included in the top 10% list. Therefore, the top 10% are not counted in any of the other areas listed.
The top 10% of restaurants worldwide are ranked based on the number of locations that are open daily and/or weekly for the past eight years, followed by the number of restaurants opened and closed each week. In other words, the number of restaurants in the top 10% for the past eight years has become virtually exclusive. This means that the number of restaurants open and closed has decreased at an average annual rate of 6% per year throughout the year.
The top 10% are listed by the number of restaurants served daily to the restaurant market by the customer. In other words, the number of restaurants serve each day is equal to the number of restaurant served daily at regular and all-time