Market Analysis Report - Fast Food Uk

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To perform the following analysis, a brief description of Ichiran, the company selected, is necessary. Ichiran is a Japanese chain specialized in ramen, which is a pork-based broth. The chain was founded in 1993 and currently has 58 stores in Japan, 2 stores in Hong-Kong and 1 store in New York. They have concentrated their menu on Tonkotsu Ramen. With an emphasis on exceptional quality and customer satisfaction. The mission of the firm is to reduce interaction among customers and with shop staff as much as possible. Thus, orders are made through an electronic chart that dispenses a ticket, which is given to the to the staff through a small window in front of your seat. Additionally, the counter seats are removable. In this way, you have the option of either eat alone or with company.

The market that I have choose for the expansion of Ichiran is the United Kingdom.

Firstly, it is appropriate to start by analysing the dimensions that determine the strategic importance of the UK market.

• Market Potential: The United Kingdom is in the Top 5 Fast Food Consuming countries in the world reaching a market value of $8,163.4 million in 2011. This number has grown steadily since then and it is estimated that the growth in fast food and home delivery food is going to be 9,2% between 2015 and 2019. According to the following publication (Food and Beverage Close-Up Magazine, 2015) In 2014, the fast food market also exhibited year-on-year growth, making the total value of sales increased by 3.5 percent from the year before. Likewise, Quick Service Restaurant (QSR) accounts for 70,4% of the market’s total value. Being, by far, the first segment of the fast food market in the UK above leisure, takeaways and street and mobile vendors. Lastly, the following graph shows that the United Kingdom accounts for 20,9% of the European fast food market.

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Relative to major brands in the industry, it is the American chain McDonald's the one leading the fast food sector in the United Kingdom with a market share above the 33 percent. Nevertheless, McDonald’s sales rise is slowing down compared with previous years due to high saturation of burger sector. Although this sector remains the largest, its growth rate is the lowest. Unlike Asian chains who have one of the major rates of growth. Thus, Ichiran can benefit from this increased demand from Asian fast food in the UK.

On the other hand, the fast food industry has shown not to be affected by the economic crisis suffered by the United Kingdom. This stability even in bad times is a good reason for Ichiran to expand into the UK.

Therefore, in terms of market potential, the significant market size of the fast food industry, its incredible growth rate and a population increasingly willing to consume Asian fast food place UK as a good option.

• Learning Potential: The quality and freshness in their products is the maximum of Ichiran, whose founder, Manabu Yoshitomi, has declared several times its obsession for quality tonkotsu broth and freshly made noodles. The increasingly demanding UK population would be a perfect drive to improve the quality of Ichiran even more. British consumers are increasingly health-conscious because many cases of obesity and diabetes in children occur.

 “In recent years there has been an influx of healthier product development (NPDs) in the UK market, but this is important that any NPDs remain consistent with brand strategy and the key market drivers of convenience, price and taste”. ("Fast-Food & Home-Delivery Outlets Market Report, 2015) This new trend of healthier new product development will Ichiran evolve towards increasingly healthy ways. Furthermore, the pace change of technology in the UK is very high. There is a significant amount of research centers in the UK from where we can expect greater innovations in the food-fast sector in order to make it more suitable for the modern lifestyle based on an healthy diet. Likewise, strong competitors are also accelerating this technology improvement. For instance, McDonald installed Electronic Funds Transfer at Point of Sale (EFTPOS) in order to accept credit or debit cards from customers.