Australia Fast Food Industry Analysis (Hungry Jack)

IBIS has reported that the fast food industry of Australia will grow at a rate of 3.7% per annum for next few years while there is a possibility dwindling spending capacity of consumers caused by economic recession might decrease the projected growth rate (IBIS World, 2012). Low entry of barrier is an important characteristic of Australian fast food industry. IBIS (2012) has reported that new entrants need to invest capital in the range of $90,000 up to $300,000 to set up fast food outlet in Australia. The analysis will try to determine the dynamics of the industry in terms of external environment, industry forces, competitor analysis and critical success factors. Major aim of the study is to analyze the Australian fast-food industry in terms of both internal and external environment. Major findings of the study can be explained in the following manner. Entry barrier for fast food industry in Australia is low. Companies need to launch low calorie fast foods to keep pace with changing consumer preference. Major recommendation for companies planning to enter fast food business in Australia are 1- use market development strategy in order to increase penetration and 2- use focus strategy to decrease risk factors. First section of the study will discuss brief introduction of fast foods industry in Australia, second portion of the study will analyze the fast-food industry in Australia in terms of PESTLE analysis, porter five force analyses contingency theory and critical success factors. Third section of the study will provide suitable recommendation to companies planning to enter in fast food business in Australia. B. Industry Analysis A snapshot of the fast food industry of Australian can be used in order to understand the underlying opportunities in the business environment of the country. Market Value Market Value Forecast Market Volume Market Volume Forecast Category Segmentation Market Competition Total market value of fast food industry in the country is more than $5,000 million. The market value will increase at growth rate of 2.5% and it will touch the mark $6,000 million within 2016. Total transaction recorded for the industry is recorded as $1,160.1 million for the year 2012. Market volume will decrease at a rate of 3% and it will touch the mark $1,130.1 million transactions within 2016. Restaurant business contributes 66% of total market value of the industry. 45% of market share is dominated by four big players such as Domino’s Pizza, McDonald’s, Hungry Jacks and Yum! Brands. (Source: Market Line, 2011) Market volume of Australian fast food industry has decreased by significant level in last two years. Compound Annual Growth Rate (CAGR) of the industry has decreased by 4.2% in last five years. PESTLE Analysis Henry (2008) has stated that PESTLE analysis is an important tool to analyse the macro environment of any country. Political Australian government has implemented carbon tax on companies operating in the country. High carbon tax rate imposed by government can increase the operating cost of fast food companies. Australian government also increased restriction on advertising for children hence fast-food companies need to be careful while designing advertisement for