I. ASSESSMENT OF THE EXTERNAL ENVIRONMENT
The fast-food segment of the restaurant industry is approaching, if it is not already in, the mature stage of its life cycle. The restaurant industry, as a whole, is plagued by a declining availability of good expansion sites, market saturation, and rising labor costs (Barr, 1989b). Food costs, while relatively stable at present, remain volatile (Barr, 1989b).
Intensified competition in the fast-food segment has resulted in a practice of heavy price discounting (Barr, 1989b). Price discounting reduces profitability, causes consumers to expect lower prices on a regular basis, and in the fast-food segment, fails to build long-term volume (Barr, 1989b).
McDonald's is the industry leader in the fast-food segment of the restaurant industry, as well as it is in the hamburger sub-segment (Barr, 1989a). Kentucky Fried Chicken is quite close to McDonald's in terms of market share within the fast-food segment, while Burger King is second in the sub-segment.
Stakeholder Assumptions; Environmental Threats
Stakeholder assumptions for the fast-food segment of the restaurant are assessed in Figure 1, which may be found on the following page. The assessment is presented in the form of a
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Pressing Importance Performance Ratings Row Performance
Social Weights Total Evaluation
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Economic 5 5 5 4 4 4 4 26 130
Legal 4 5 5 5 5 4 4 28 112
responsibility 5 5 5 4 4 4 4 26 130
Products 5 5 5 4 4 4 3 25 125
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Stakeholder 20 20 17 17 16 15 Total 497
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