Indian Luxury Consumer Essay Example for Free

Indian Luxury Consumer Essay The Indian Luxury Consumer: Rapidly maturing and looking for more Any study of the luxury market needs to conclusively address core questions around the luxury customer Who, What and Where. To fully understand answers to these questions, we interviewed existing and prospective customers across various locations, income and age groups. We also interviewed industry leaders across all luxury categories on the Indian consumer and the changes that they have observed over the last few years. In this section, we shall provide answers to three basic questions: 1. What constitutes luxury in India? 2. Who is the luxury consumer? What has changed in the last 2-3 years? 3. How is the behavior of the luxury consumer changing? 4. What are their specific tastes and preferences? 5. Where do they make their purchase? Luxury in India – more aspirational luxury than ultimate luxury Industry leaders across categories believe that luxury is not only determined by price. Exclusivity is a far more important parameter for a product or service to be called luxury. As such customization, uniqueness, and even understatement is important. Design, use of exquisite materials, presentation and personalized service all contribute to luxury. Consumers also talk about exclusivity, uniqueness and appeal to personal taste. This is not as yet corroborated by increased sales of â€Å"ultimate and subtle† luxury products. The majority of the market is still far away from this definition and brand/logo/badge value drive luxury purchases very clearly. Size, flashiness, clearly visible logos, well known brand are the key considerations in the purchase. That said, traditional attributes such as high quality, heritage, longevity, the â€Å"stories† associated with brands are beginning to emerge as drivers of purchase. Bulk of the Indian market is still dominated by the more accessible and aspirational luxury products. Status – announcing your arrival into the elite segment of the society – is the biggest motivation still. The mindset is still that of an â€Å"aspirer† not that of a â€Å"connoisseur†. The Indian luxury consumer new insights The Indian luxury consumer has been studied a few times now. Various segments have been identiofied by earlier studies. The old money/new money/gold cuffs/.. (Luxury Brands) and Industrialist/Corporate/Professional/ (Economic Times – A. T. Kearney India Luxury Review 2007). The focus of our consumer research was to find out how the consumer has evolved in the last 3-4 years. The accepted wisdom is that industrialists and traditionally wealthy families is the largest segment, senior corporate executives are a smaller but emerging segment and young professionals are entering the market. Our research has shown that by and large the consumer segments that constitute the bulk of the market have not changed significantly, although finer sub-segments are now more apparent: Medium size enterprise owners: This is the largest segment in terms of number these are typically the medium enterprise owners – industrialists and traders who run businesses with revenues upwards of 50 cr. The source of their spending is the surpluses generated by the business. Many of these have grown as the economy grew rapidly in the last twenty years. Their wealth is their passport to the elite segment of the society and conspicuous consumption is their way of announcing it to the society. The children who tend to be second or third generation are the bigger spenders, having been educated abroad and hence familiar with brands and the luxury way of living. They are now educating and enticing their more conservative elder generation into spending. Interviews also reveal that those who generate cash need to necessarily spend it and luxury goods are a good avenue for spending. These are very frequent luxury consumers and consume the entire gamut of products and services and some assets like cars and real estate. These consumers shop around for deals and bargains, including international travel. Traditionally wealthy families / large industrialists: This group comprises two sub-segments – the first is the traditionally wealthy families – who have been consuming luxury for several decades and go for the finer things in life. The largest business houses in the country and historically wealthy Marwari, Gujarati, Parsi, Punjabi families epitomize this class. The other sub segment comprises the promoters of some very large businesses which have come up in the last two decades and have created disproportionate wealth very quickly. Builders, miners, diamond merchants, stock brokers, new age enterprise owners fall in this category. Many of them have migrated to the highest ladder of luxury consumption very quickly by acquiring yachts, jets, houses and really expensive cars. Corporate executives: Senior executives of corporate India who are paid in excess of Rs. 1 crore and bankers who earn big bonuses epitomize this category. These executives are well traveled and are aware of brands. Most of these are in their mid-late forties and represent some of the brightest minds in the country. Many of them though have come from middle class backgrounds and hence have a conservative approach on conspicuous spending. While they can well afford to spend, their propensity to spend is low. A gradual change is being seen as they see more and more of their compatriots spend. These consumers spend on some luxury products such as watches, accessories, select apparel, fine dining, international and domestic travel and high end cars. They also tend to shop on their frequent international trips to get the best deals. Self employed professionals: These comprise of professionals such as lawyers, doctors and architects: A small but niche segment, comprising the top stars in their profession, who have made it big. While many of these come from middle class backgrounds, they use their new found wealth to live a good life. They shop for the entire range of products and services although are found less often at the absolute top end of the ladder. Young professionals: Working in service industries – these earn the least compared to the others, but since they don’t have family responsibilities, the disposable part of the income is high. They are in tune with the latest fashion trends, travel abroad once in a while and believe in spending on what they fancy. They tend to consume entry level products and are infrequent consumers. Other segments: Expatriates: Expatriates in the country are growing and they are staying for longer periods: These are on expatriate packages and are accustomed to luxury consumption in other parts of the world. However most of these fly back very frequently and stack up on their luxury products need on these trips. Luxury services and assets (mostly cars) are influenced in a small way by this segment. The segment is definitely driving the increasing awareness and need for luxury products Politicians and bureaucrats: Interviews reveal that politicians and bureaucrats are a large segment for all luxury products, but have a much more pronounced preference for jewellery, watches, cars and real estate. Contrary to the popular perception that is generated by the flashy lifestyles of film and television actors, they are not large spenders by themselves and collectively it is still not a large segment. Luxury consumption of film and TV stars is paid for by the producers. They alsoi shop abroad a lot. Many celebrities belong to rich business families and owe their luxury consumption to their family wealth or get a lot of luxury products as gifts. Citywise sub-segments: There are sub-segments in each city that drive most of the purchases: * Mumbai stock brokers, diamond merchants/exporters * Delhi – industrialists, traditionally wealthy, politicians, bureaucrats * Chennai – traditionally rich, industrialists * Bangalore – builders, IT top brass * Kolkata – traditionally wealthy Marwari businessmen, traders Age profile. The average consumer is still young – between 30-45. This is in line with the overall demographics and is expected to stay that way for some time. It is thus a young luxury market in contrast with some of the mature markets like Europe and the USA where the average consumer is much older (need some data here). Consumer Behavior We found that while the average Indian luxury customer values High Quality, Exclusivity and Social Appeal as key drivers of luxury purchase, they are also very Price Conscious and often straddled with a â€Å"middle-class mindset†. Corporate Professionals in particular tend to be more price sensitive than the Traditionally Wealthy and Business Owners. This is also due to the fact that the average â€Å"fashion consciousness† of Indian consumers is still quite low – most consumers prefer â€Å"well known† brands and make luxury purchases for â€Å"brand value† and not â€Å"fashion value†. The table below summarises the typical behavior patterns of the consumers in each of the segments | Medium Size Enterprise Owners| Traditionally Wealthy Families Large Industrialists| Corporate Executives| Self Employed Professionals| Young Professionals| Average Age| | | | | |. Awareness| Low| High| High| Medium| High| Fashion consciousness ( apparel and accessories)| Low| High| Low| Low| High| Price Consciousness| High| Low| High| Very High| Very High| Badge Consciousness| High| Medium-Low| High| High| Very High| Propensity to buy overseas| High| High| High| High| High| Greater awareness rapidly increasing and the entry of brands, development of malls and magazines has helped. Compared to three-four years ago, the number of people who can correctly pronounce Chanel and Gucci correctly has increased dramatically, although there is still a long way to go. What is interesting to note is that the Indian luxury customer is maturing rapidly and brand awareness has increased significantly over the past 3-5 years. Brands are beginning to see loyal customers who have their preferred set of brands. Among brands, the pedigree of a brand is very important. There is a heritage value with luxury brands – customer typically put more value on brands that have been around for many years. When it came to Indian brands, there is clearly a mixed perception. While most customers were willing to purchase luxury services from Indian players, the luxury products market still has a long way to go. Specifically in services, Indian service quality is considered to be at par with the best in the world. Within products, the categories that customer preferred have a high class value attached to it. Hence very select categories like jewellery and Indian designer apparel products are considered ‘luxury’. Fashion consciousness – changing very fast, dressing for a look increasing in the metros – still a long way to go – in the words of one of the luxury fashion CEOs Indians are â€Å"sartorially challenged†. The younger members of the rich families and the young professionals are leading are leading the pack. Badge consciousness – continuing, no doubt. A logo is probably the most important thing about a product. It is easier to sell a pair of sunglasses or a polo shirt where the logo is clearly visible than a shirt where it is not so obvious. Price consciousness – here to stay. The entire industry acknowledges this and both the principals and the Indian parties strive hard to match prices to make it price neutral for the Indian consumer who would not mind taking a flight to Singapore or Dubai or ask someone to get it, if the difference is more than 3-5%. The economics is simple – its costs 15-20,000 for a return trip (economy of course! ) to Dubai or Singapore. On a product costing upwards of Rs. 200,000, this is less than 10% of the product price. That puts a limit on the amount of premium that anyone will be willing to pay for products that can be easily purchased overseas and carried back. The grey market will willingly carry products for a fraction of the cost of a return trip. The only exception is cars – where it is not possible to bring it in – either legitimately or smuggled. Propensity to buy overseas – reducing but still very significant. One interesting observation is that Indian luxury customers are not averse to buying from India, just that they feel there are better avenues abroad. One of the key challenges is to provide luxury shopping destinations that offer a variety of brands under one roof. While most of them purchased from boutiques in New York or Malls in Dubai, in India there are not many avenues for luxury purchase. While most consumers also make luxury purchases in India, shopping abroad is still by far the preferred option. Consumers have certain perceptions about luxury shopping in India, that have held them back making large scale and frequent purchases in the local market. Interviews with industry leaders reveals that the consumer wants the same package here – merchandise (range, freshness), convenience (location), price and experience (ambience, service) – with an extra expectation of service, given that this is India, where labor is cheap. The development of the Indian duty free has meant that Indians have an option of buying duty free products in India when they arrive rather than carting it all the way from popular shopping destinations overseas. Consumers still believe that the widest, most recent range is not available here and that prices are more expensive here, though at least two of these clearly are myths that need to be broken. In fashion, collections are designed for the whole world once, no one creates separate collections for India and old collections are not available. Width of range is a trade-off that has to be made depending on the depth of the market, so that is a possibility. Converting the overseas market is a big challenge for retailers. Propensity to buy from the grey market – by all accounts, this is reducing in established brands. Concerted efforts by players to bring in the latest merchandise, efforts by brands to supply products at lower prices to India and Indian retailers willing to work on thin margins has meant that the consumer now gets a good bargain. New brands which consumers want and are not available find their way through this channel. Driver of Luxury consumption: Number of HNIs, HNI Wealth or Household Income? It is generally accepted that luxury market size is positively correlated to household income (GDP/capita), the number of high networth individuals and/or their wealth. Discussions on luxury are never complete without a reference to these parameters. A correlation between the size of the luxury market, the GDP/capita, number of HNIs and HNI wealth over the years 2004-2009 shows that in terms of importance the number of high networth individuals is the most important driver, followed closely by GDP/capita and HNI wealth. Interviews with leading luxury brands in India points to the fact that family wealth is a very strong determinant of spending than household income. Consumer interviews with traditionally wealthy families indicates a very interesting pattern – they are habitual consumers of luxury and less price conscious. Some of the segments mentioned above would fall in the HNI category. However luxury consumption in India is not limited to only the HNIs. The masstige phenomenon can be observed very clearly in India. Luxury products in India are appealing to, and purchased by, middle-class consumers that do not fit the typical profile of an elite consumer segment. For these shoppers, luxury represents status and prestige, a place in society that they fit into as a result of their purchase of high-end products. This phenomenon is observed even in the large mature markets such as UK, where a large number of individual consumers buy very small volumes. Luxury goods companies develop products that re-enforce the â€Å"masstige† and drive volumes. As such it is very important to look at the other indicator of the market – the GDP/capita. In India given the fact that wealth is being created due to the rapid growth, growing household incomes are converting the middle class into emerging luxury consumers. As such there is a large segment (below the 1 cr income category) where while the wealth might be low, it is the incomes that are driving the consumption. Measured in PPP terms, 25 -100 lakhs in India is equal to $ XX-YY,000 of income in the US or EUR AA-BB,000 in Europe, which is definitely a luxury consumer. The above two factors combine to make the consumer spectrum in India very broad. Our research shows that sporadic/ infrequent luxury consumption for products and services begins when annual household income goes upwards of Rs. 20 lakhs, becomes frequent when annual household income crosses the Rs. 1 crore mark and becomes habitual when the wealth crosses the HNI milestone ($1 mn in liquid assets). For luxury assets, the markers are understandably much higher and even within assets, the ladder become quite steep as one goes higher. For example, consumer for private jets would be the top 200-400 richest families in the country – the billionaires, super rich families (the HNIs) – anywhere around 200-400 families – such as the private jets, yachts and the largest houses – earning anywhere upwards of 50 cr per annum or with family wealth in excess of 100 cr. The spectrum thus begins at rupee millionaires and goes all the way to real billionaires. While the small traditionally super wealthy families who know what absolute or real exclusive luxury means, and can be called connoisseurs, bulk of the incremental wealth generation in India has been the the handiwork of new age businessmen/industrialists who were not so wealthy a couple of generations ago. As the â€Å"new money† matures, one can expect that the tastes and preferences will also evolve. | | Rupee Millionaires| Near Millionaires| Real Millionaires| Category| Household Income| 10-25 lakhs| 25 lakhs – 1 cr| 1-5 cr| 5 cr+| | Networth/Wealth| | | | |. Estimated number of households| 2,373,000| 1,292,000| 141,000| Typical Occupations| Service Industry professionals| Corporate Executives, Self Employed Professionals| Medium Enterprise OwnersTraditionally wealthyCompany CEOs, top bankers| Large IndustrialistsTraditionally wealthy| Luxury products| Low ticket value items such as leather accessories ties, cuff-links,Wines and spirits, personal care| Watches, some apparel, accessories| All| All| Luxury Services| Spas, Infrequent fine dining| Travel, frequent fine dining, hotels, spas| All| Luxury Assets| | | Cars, YachtsReal estate, Paintings| Private jets|. Geographical distribution of consumers Luxury consumption in the country has so far been concentrated in Delhi and Mumbai with Bangalore being a distant third. Brands have been thinking of expanding their footprint beyond these cities and have been wondering about where their next store should be opened. We now believe that the distribution of the rupee millionaires is a good indicator of the luxury consumer distribution in the country. We also believe that for luxury consumption to take off a minimum critical mass is needed in a city. While Delhi and Mumbai continue to be the mainstay markets for luxury consumption, there are several other cities with a large base of potential luxury consumers. A look at the figure below suggests that while Mumbai, Delhi and Bangalore are the top three cities, other cities also have significant potential for luxury consumption. Show a chart between the number of families (X-axis) and the growth 2006-2009 (Y-axis) and number of such households as the bubble size. Use the data below. Year| 2006-07| 2009-10| | Income Category| Annual income Rs. 10,00,000/-| CAGR| Top 20 Cities ranked on the basis of Annual Market Size| Number of Households| Number of Households| | Delhi| 132,258 | 348,000| 38%| Mumbai| 98,164 | 347,000| 52%| Bangalore| 101,550 | 126,000| 7%| Thane| 69,658 | 137,000| 25%| Pune| 57,130 | 106,000| 23%| Chennai| 28,025 | 109,000| 57%| Ahmadabad| 45,224 | 91,000| 26%| Hyderabad| 26,670 | 69,000| 37%| Surat| 34,457 | 60,000| 20%| Coimbatore| 18,076 | 37,000| 27%| Salt Lake (Urban Areas in North 24 Parganas district)| 14,373 | 65,000| 65%| Kolkata| 15,790 | 94,000| 81%| Thiruvallur| 17,837 | 22,000| 7%| Lucknow| 20,654 | 29,000| 12%|. Jaipur| 27,011 | 21,000| -8%| Vadodara| 22,911 | 53,000| 32%| Nagpur| 23,637 | 46,000| 25%| Kancheepuram| 13,920 | 24,000| 20%| | 767,345 | 1,784,000 | 32%| Source: Indicus Analytics| | | | Extrapolating the growth rates seen in these cities, over the next 3 years implies that several new cities will become potential centres of luxury consumption. Kolkata, Chennai, Hyderabad, Pune, Vadodara are high potential destinations to watch out for. A quick comparison with China shows that there are atleast 20 cities/towns where luxury brands are present. Comparison between luxury stores in India and China. | LV| Burberry| Chanel| Hugo Boss| Beijing| 3| 2| 2| 9| Shanghai| 3| 2| 5| 5| Other Tier I| 6| 6| 0| 8| Tier II| 12| 10| 1| 22| Others| 11| 13| 0| 43| | LV| Burberry| Chanel| Hugo Boss| Mumbai| 2| 1| -| 1| Delhi| 2| 1| 1| 1| Bangalore| 1| 1| -| 1| Others| -| 1| -| -| We believe in the next 5-7 years, atleast 5-7 new towns will get added on the luxury map of India. We also believe that the potential in Delhi and Mumbai has not been fully exploited and that there exist a few more micro markets within these cities that need to be tapped. Pockets of wealth and good infrastructure could be the next big destinations. In Mumbai, South Mumbai, Central Mumbai, Bandra/Juhu, Powai and Thane are micro markets which are far enough from each other, have concentration of wealthy families and decent infrastructure. In Delhi, similar micro markets could be South Delhi, Gurgaon, Saket, †¦.. In summary, while the Indian luxury market is evolving, so is the luxury customer. Understanding the nuances of the customer is extremely critical to succeed in this dynamic industry.

Perceptions of the 18th Century Novel in Ian Watt’s Book, The Rise of T

Perceptions of the 18th Century Novel in Ian Watt’s Book, The Rise of The Novel The eighteenth century novel was one that changed the way novels were written in many different ways. In reading Ian Watt's book, "The Rise of The Novel," quite a few things were brought to my attention concerning the eighteenth century novel; not only in how it was written and what went into it, but how readers perceived it. This essay will look into Ian Watt's perceptions on the eighteenth century novel and how it changed from previous literature. Coming out of the Renaissance and Jacobean ages, the novel was characterized by "realism", with the term "novel" not really being used until the end of the eighteenth century. This realism was not defined like we would define realism today (defined by Webster as an interest or concern for the actual or real), but instead is grounded in the position that "truth can be discovered by the individual through his senses." (12) Instead of conforming to traditional practice (such as the classical and renaissance epic based on history and fables), the novel focused more on the individual where "the pursuit of truth is conceived of as a wholly individual matter, logically independent of the tradition of past thought." (13) By rejecting traditional plots the novel distinguished itself out from any other previous form of literature, making individual experience the replacement for collective tradition. Many other things apart from plot were changed for the novel to fully show this new take on reality. Now the plot was acted out by "particular people in particular circumstances" (15) rather than, as in the past, by general people against a pre-determined background by appropriate literary convention. The nove... ...hough much of the literature was religious oriented, there was a great surge towards secular reading by the public of which the booksellers became largely responsible as they sought to increase their pay. The eighteenth century was definitely a time of massive change for literature. Not only had the way of writing been drastically altered, but the amount of reading done by the public altered as well, bringing about a resurgence of reading, not only in the upper classes, but also in the all the classes. Though lacking in some areas, plot not being least, the novel revolutionized the eighteenth century and brought about a new way of thinking. By today's standards, it might not seem like much was done, but in the history of things, the eighteenth century novel is probably one of the biggest things to ever happen to the progression of literature throughout the years. Perceptions of the 18th Century Novel in Ian Watt’s Book, The Rise of T Perceptions of the 18th Century Novel in Ian Watt’s Book, The Rise of The Novel The eighteenth century novel was one that changed the way novels were written in many different ways. In reading Ian Watt's book, "The Rise of The Novel," quite a few things were brought to my attention concerning the eighteenth century novel; not only in how it was written and what went into it, but how readers perceived it. This essay will look into Ian Watt's perceptions on the eighteenth century novel and how it changed from previous literature. Coming out of the Renaissance and Jacobean ages, the novel was characterized by "realism", with the term "novel" not really being used until the end of the eighteenth century. This realism was not defined like we would define realism today (defined by Webster as an interest or concern for the actual or real), but instead is grounded in the position that "truth can be discovered by the individual through his senses." (12) Instead of conforming to traditional practice (such as the classical and renaissance epic based on history and fables), the novel focused more on the individual where "the pursuit of truth is conceived of as a wholly individual matter, logically independent of the tradition of past thought." (13) By rejecting traditional plots the novel distinguished itself out from any other previous form of literature, making individual experience the replacement for collective tradition. Many other things apart from plot were changed for the novel to fully show this new take on reality. Now the plot was acted out by "particular people in particular circumstances" (15) rather than, as in the past, by general people against a pre-determined background by appropriate literary convention. The nove... ...hough much of the literature was religious oriented, there was a great surge towards secular reading by the public of which the booksellers became largely responsible as they sought to increase their pay. The eighteenth century was definitely a time of massive change for literature. Not only had the way of writing been drastically altered, but the amount of reading done by the public altered as well, bringing about a resurgence of reading, not only in the upper classes, but also in the all the classes. Though lacking in some areas, plot not being least, the novel revolutionized the eighteenth century and brought about a new way of thinking. By today's standards, it might not seem like much was done, but in the history of things, the eighteenth century novel is probably one of the biggest things to ever happen to the progression of literature throughout the years.

Strategic Analysis of the Uk Fast Food Industry

Business and Management Strategy BAM6012 A Strategic and Competitive Analysis of the UK’s Fast Food Industry Executive Summary The food industry in the UK is a multi-billion pound industry that is mainly dominated by a few competitors such as McDonalds, Burger King, KFC and Subway. Most of the food sold in these fast food restaurants is unhealthy, which is becoming a huge concern as there are many people dying of obesity and other health related problems. This is one of the key social factors facing the fast food market at the moment.The fast food industry is a ‘red ocean’ as it is already well defined where rivalry is intense. It is also a perfectly competitive industry as the barriers to entry are low and there are many rivals each with similar products. Information about any of the competitors is freely available. The industry does have a few characteristics of an oligopolistic industry too as there is a couple of companies that have the main market share and h ave power over the buyers and suppliers.The main features that influence a firm’s ability to compete and gain profitability depend on who their main competition is. For example there are different strategic groups in the industry such as McDonalds and Burger King who compete at the top of the industry and single privately owned fast food retailer that compete on a much lower level with much smaller budgets. The customer requirements are very low in this industry as a lot of the products sold by different firms are very similar; however the requirement of a cheap and fast meal is always at the top of their needs.Any potential strategy to increase profitability within the industry will need to be assessed properly and to realise the risks involved and other potential threats to it. Table of contents Pg. Executive Summary†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 2 Introduction†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 4 History of the fast food market†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 4 Current market conditions†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 4 PESTEL analysis†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 5 Porter’s Five Forces†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã ¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. Industry attractiveness†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 9 Opportunities†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 9 Threats†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 9 Possible strategies†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 10 Bibliography†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 11 Introduction This report aims to give a strategic and competitive analysis of the UK’s fast food industry. It will cover the main structural features of the industry that influence competition and profitability. The report will give an overview of the whole industry rather than just one company within it.I shall also aim to analyse the industry attractiveness showing why possible companies would like to enter the marketplace. Another aim of the report is to analyse the competition and customer requirements in order to identify opportunities to gain a competitive advantage within the industry. The final aim of the report is to develop possible strategies to influence and improve on profitability. Whilst developing a strategy, the difficulties and risks involved in using these strategies will be covered. History of the fast food industry in the UKThe UK has embraced a lot of different types of fast food over the years, ranging from pizza to burgers, kebabs to Chinese, curry to fish & chips and healthy offerings. There is a lot of competition in the market at present with high profile companies such as McDonalds, Subway, Burger King, and KFC, not to mention the amount of privately owned single store fast food outlets. Current market conditions The value of the fast food market in the UK grew by 3. 3% in 2011 to reach a total value of $7,860. 3 million. The forecast for the market value is set to increase to $9,147 million by 2016.This is an increase of 16. 4% by 2011. Transactions in the fast food market also grew in 2011 by 1% to reach a total volume of 2,785. 2 million transactions. The market volume is set to increase by 6. 8% by 2016 to a total of 2,975. 4 million transactions. Fast Food Industry Profi le: The United Kingdom’ 2012, Fast Food Industry Profile: United Kingdom, pg 1-35, Business Source Premier, EBSCO host, viewed [25/11/2012] PESTLE analysis â€Å"PESTLE analysis will help to capture understanding about aspects of the context by using the prompts political, economic, sociological, technological, legal and environmental.It is a technique that facilitates a wide scan of the context and actual or potential factors that would affect objectives if left unmanaged. † (Webster-Murray, R. 2010. pg. 88) Political factors * There is an increasing amount of pressure from the government to encourage people to eat healthier as the number of deaths relating to obesity and an unhealthy lifestyle is on the increase year after year. * The government can allocate grants to business start-ups to try and promote fair competition within the marketplace. There is speculation over the government introducing a new ‘fat tax’ on fast food served over a counter. This will add on another 20% to the current price in taxes. http://www. guardian. co. uk/society/2012/may/16/fat-tax-unhealthy-food-effect Economic factors * Consumers will have less disposable income with the current economic climate and therefore may be less likely to spend money on fast food as it may be seen as a luxury. * Exchange rates may affect profitability on the business if they are sourcing materials (all the ingredients used to create their food) from outside the UK. Unemployment levels are high at the moment in the UK which means there will be even more consumers without the money to purchase fast food. The current unemployment rate currently sits at 7. 8%. http://www. ons. gov. uk/ons/key-figures/index. html * The inflation rate is at 2. 2% currently in the UK. This does not pose a problem as businesses will not be phased by this to invest more and grow. http://www. bbc. co. uk/news/business-19959827 Sociocultural factors * The current social trend of eating healthy and ha ving a healthy lifestyle is pushing customers away from eating at fast food restaurants. With London just hosting the Olympic Games in the summer of 2012 then a lot of people are trying to start a much healthier diet and lifestyle for themselves, therefore cutting back on the amount of fast food they currently eat. * The high standard of education in the UK means that children are more aware and knowledgeable about the health implications that arise from eating fast food. * With the current fast paced lifestyle that a lot of consumers have, it is easy for them to just pick up food at a fast food outlet rather than cook for themselves.This shows that fast food can be seen as convenient. * Companies must try and add value to their brand by being reasonably priced and of an equal quality in relation to the price. * Consumers already have a large variety of choice within the fast food market therefore a menu should also offer a lot of choice so that the customer can be satisfied and the ir ever changing taste can be satisfied too. * The fast paced lifestyle of consumers means that the service of fast food must also match that and be quick too. * Healthy options must be made available as to encourage a balanced diet.Technological factors * Fast food companies now have a wide range of tools available to them in order to promote their brand and products. Different ways they can do this is through the use of TV, radio, internet, direct mail, interactive billboards and many other options. * Companies can now use the internet not just to promote their brand but also to take orders and let the customer make transactions. This can be helpful to lower the cost of using employees. * Technological advances mean it is easier for a company to keep track of stock levels and also take orders in store.This minimises the risk of human error. Environmental factors * Companies in the fast food industry now need to monitor the amount of waste they dispose of as there is a lot of empha sis now on cutting down the amount of waste and turning it into recyclable and reusable products. Businesses are now turning to recyclable packing. * The amount of energy that is consumed in the process of making the fast food and where all the energy comes from to power a fast food outlet. Can be seen as a good ethical policy to use or create off shore wind farms that power outlets. Legal factors Have to stick to a law that means they cannot mislead consumers on the nutritional value of their products. * Companies have to abide by certain health and safety laws for both the employees and the customers. * Other laws that a business will have follow are laws on employment, fair competition and food hygiene. Through the use of a PESTLE analysis we can see that there are many factors that affect the UK’s fast food industry. Most of these factors arise in the sociocultural section as it is here that the fast food industry gains most of its unwanted attention.This is mainly down t o the fact that the foods served by the companies are mainly unhealthy, carrying lots of calories, salt and sugars. Porters Five Forces Model In 1980, Michael Porter came up with a model that identified five forces that have an influence on an industry. This model â€Å"focuses on five forces that shape competition within an industry: (1) the risk of entry by potential competitors: (2) the intensity of rivalry among established companies within an industry: (3) the bargaining power of buyers: (4) the bargaining power of suppliers: and (5) the closeness of substitutes to an industry’s products. (Hill, C. W. L, Jones, G. L. 2010, pg. 42) Threat of New Entrants * Low barriers to entry mean that it is easy for a company to start up a business in the fast food industry. However would be unable to compete directly with the large organisations already in the market. * Easy for a new entrant to differentiate their product and atmosphere of the outlet (shop). * Once a good location i s found then it could ensure the success of a new entrant. Could be possible to dominate the market in a certain location. Capital investment is not too high or out of reach for most individuals. Bargaining Power of Suppliers * Companies in the fast food industry could change their suppliers quite easily as there are a lot of suppliers that would be happy to receive the amount of revenue they could gain from using such a large company as Burger King or McDonalds. * The larger companies in the fast food industry have a lot of bargaining power over their suppliers as they could make up a very large proportion of the suppliers revenue, if not all of it. Bargaining Power of Buyers Due to the sheer volume of customers that purchase fast food, the bargaining power of the buyer is low. For example, a customer could barter with a butcher’s market stall about the price of meat whereas they could not walk into a Subway store and negotiate the price of a sandwich down to their preferred amount. The price shown is the price that will be paid. * Only bargaining power the customer has is the lack of switching costs. A customer could purchase from a McDonalds instead of Subway without costing them anything. Threat of substitutes The threat of substitute products is very high as firstly the lack of switching costs means that a customer could change preferences and purchase from another company immediately as long as it fitted their standard of quality and price. * The market is currently flooded with products that are all very similar (McDonalds burgers are in theory the same as Burger King) therefore a new product could arise and sell particularly well as long as it had a good taste and quality. Rivalry among Existing Firms * Rivalry is high in the current market as top firms such as McDonalds and Burger King compete for the highest market share.Due to the sheer size of these companies they can spend heavily on advertising and use aggressive tactics to ensure success. * Constant funds are being ploughed into advertising to try and promote not just the products companies offer but also to try and promote their brand. For example, McDonalds now tries to show more on the ethical side of the company saying that all of their ingredients are sourced locally. Through the use of Porter’s Five Forces model, we can see that the threat of substitutes, rivalry among existing firms and threat of new entrants to the market are moderate to high.Whereas the bargaining power of both suppliers and buyers are relatively low. This shows that the companies in the market currently have a lot of power. Industry attractiveness * Massive industry worth $7,860. 3 billion. * Huge volume of transactions at 2,785. 2 billion. * Small market share can still mean high revenue. * Possibility to create a large and global company similar to that of McDonalds. * Possibility to run a franchise business model. * Has a very broad market segment. * Could be a good industry in a recession as consumers cut down spending on eating at more expensive restaurants. Industry is predicted to continue growing. Opportunities There are many opportunities and threats that arise from the use of the PESTLE analysis and Porter Five Forces model such as: 1. Due to the current unemployment rate of 7. 8% this means that large companies such as McDonalds could use this to their advantage and open a number of new stores to create new jobs and in turn create more revenue for the industry. This could enhance the image of the industry as it is helping the nation out by creating jobs in this time of economic downturn. . As consumers have less disposable income then they will be less likely to eat out at more expensive restaurants and may turn to fast food outlets as they are cheaper. This is a great opportunity to advertise heavily on a menu that is less expensive than the normal menu. For example creating a meal that only costs the consumer ? 2. This should attract a lot of pote ntial customers to spend more in the fast food industry. 3. Differentiate the industry by offering healthier foods on a whole to gain the interest of the health conscious consumers.This would increase the volume of the industry. Threats 1. If an outbreak of foot and mouth disease or BSE (mad cow disease) were to arise then consumers would not be purchasing any type of beef which would mean a downturn in the amount of revenue gained by the fast food industry. 2. Any type of negative feedback from the media would shine an unwanted spotlight on the fast food industry. For example, if someone were to find a hair in their burger at a fast food outlet then it might influence customers to eat elsewhere.Strategies to influence industry structure and improve industry profitability * Create new menus that will offer healthy food to the consumer. This will engage with a new target audience and therefore enhance the volume of transactions the industry already has. The amount of revenue earned b y the industry will also increase. This will lead to new competitors in the market place offering a different product type and increase the amount of competition amongst the already competing firms. * Companies could vertically integrate in order to gain control over the production of the ingredients that it needs to create the foods.This would be risky for some businesses as the vast majority of their expertise is in the retailing of fast food. Conclusion Overall, the fast food industry is a highly competitive industry that is dominated by a few main players. The main features that influence competition are the changing tastes of the customer and their willingness to try other fast food outlets. Profitability is not only based now on the products that a company sells but also the way in which the customer perceives the ethical values of a company.Although the requirements of a customer needing a cheap meal at a fast pace is still high on their agenda of needs. For a company to surv ive and improve upon its current position in the marketplace it should think about different strategies such as growth (new products or different areas) differentiation and vertical integration. Bibliography * Fast Food Industry Profile: The United Kingdom’ 2012, Fast Food Industry Profile: United Kingdom, pg 1-35, Business Source Premier, EBSCO host, viewed [25/11/2012] * Murray-Webster, R. (2010) Management of risk: guidance for practitioners.The stationery office: Norwich * Dennis Campbell (2012) ‘Fat Tax’ on unhealthy food must raise prices by 20% to have effect says study. (01/12/2012) http://www. guardian. co. uk/society/2012/may/16/fat-tax-unhealthy-food-effect * Office for national statistics (2012) Key figures. (02/12/2012) http://www. ons. gov. uk/ons/key-figures/index. html * BBC (2012) UK inflation rate slows to 2. 2% in September, ONS says. (01/12/2012) http://www. bbc. co. uk/news/business-19959827 * Hill, C. W. L & Jones, G. L. (2010) Strategic Man agement an integrated approach. Cengage learning: USA

Comparing Beliefs and Vaules of the Renaissance and...

Comparing Beliefs and Vaules of the Renaissance and Middle Ages There are many contrasts in the beliefs and values of the Renaissance and the Middle Ages. The Middle Ages was a time of great suffering, including famine and widespread disease. The Renaissance, however, was a revival of art, learning, and literature. Their views of the purpose of life in the present world and mans place in the world was, perhaps, the greatest contrast. However, their views on politics, religion, and education were very different as well. The purpose of life and mans place in the world was viewed differently during the Middle Ages and the Renaissance. During the Middle Ages, also known as The Age of Faith, mans purpose was to serve God. Life was†¦show more content†¦The greatest virtu of the Renaissance was action. There was a zest for living, and man began to love the rich, ornate, and lavish lifestyle. The concept of hard work to obtain secular goals was conceived during the Renaissance. Man strongly agreed with the Greek view, Man is the measure of all things, and was viewed as the center of the world. Another contrasting view was that of politics. During the Middle Ages, the political structure consisted of a monarchy, where one person ruled over the people. Feudalism was the law of the land. Therefore, the common man was a serf and would die poor just as he was born poor. On the other hand, Republicanism was considered to be the best form of government during the Renaissance because the individual could realize his fullest potential by serving the state. According to Leonardo Bruni, the rule of one person was harmful to the common good. Thus, the republican government was considered to be stronger than the monarchy. Religion was also viewed differently. The Catholic Church was the one universal church during the Middle Ages. People believed that only church officials could interpret the scriptures. People also believed in the absolute authority of the church. During the Renaissance, the Protestant Reformation led to the development of many churches. People believed that each individual could interpret the Bible for himself. The church no longer had absolute authority as it did during the Middle Ages.