Production and Cost Analysis in the Fast Food Industry Paper

Abstract

The fast-food industry has generally experienced immense growth over the past years. Certain features of this industry tend to be distinctive, and this has drawn the attention of several business research analysts in the recent past. Consumers are the point of focus in the majority of research works since they are the ones who determine the overall profitability and success of the business. With the ever-rising competitive nature in the fast-food industry, businesses have to be strategic in their decision making to ensure an increase in the demand for their products and services. Even though there are some challenges in the industry, its ever-changing dynamics have presented opportunities to most entrepreneurs who look forward to profiting from their ventures. Most businesses have to ensure efficient production techniques while minimizing costs and maximizing top-notch outputs. This paper analyses dynamic and contemporary production and cost elements in the fast-food industry.

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Keywords: Fast-food, cost, production process, decisions, customer

Introduction

Understanding the trends on how fast food businesses operate is essential in this case study analysis as it gives one an overview of the incorporated techniques. Fast food is a type of service that involves preparing food prior, packing, and keeping it safe to take away service. Another principal keyword is the cost. Costs determine the overall revenues and whether the business will get a profit or loss. The production process also determines the success or failure of a venture as it shows the business' efficiency level as well as its competitive advantage. Decisions are of importance to fast-food businesses as they set the pace for pricing, risk, operation management, output processes, and investments. Lastly, the effectiveness of the fast-food industry relies on customers as they are the ones who demand the goods and services and motivate the business towards production.

Hypothesis Questions

• What can be gained from the introduction of technological production techniques in the fast-food industry?
• What can be gained by the reduction of costs in the fast-food industry?
• What can be gained from improving current production techniques in the fast-food industry?

Business Achievements in the Fast Food Industry

Strategic locations have proved vital in attracting and informing the customers of the business location. Several factors contribute to the success of the fast-food industries in the United States. Notably, customers and consumers prefer places that are easily accessed. The fast-food businesses are located in convenient places that easily allows the consumers to reach them. Locating businesses in suitable places have made them attract prospective customers and maintain regular ones. The fast-food premises' strategic location has resulted in the realization of growth in terms of increased sales. It has promoted the businesses by exposing the advert signboards, thereby enhancing the visibility of the premises.

Advertisements and promotions are key in making the prospective and regular customers aware of the services offered by the businesses. The advertisements are a form of promotion to the businesses. This marketing strategy aims at influencing prospective clients into buying and engaging with the business. The fast-food industries have adopted advertisements on several fronts and platforms to influence the client's attitudes towards the businesses. Most of the adverts are persuasive and influential. The fast-food businesses have adopted the advertisements on several platforms intending to reach a larger audience. Some of their promotional activities include social media, local and mainstream media, mobile advertisements, signboards, and broadcast advertisements.

Consistency is another production strategy that has helped the fast-food industries to contain their regular customers. It involves practicing a high level of hospitality to the clients at all times. A laxity in customer treatment can demoralize customers who will switch to other alternative providers. The strategy has helped the fast-food industries to ensure that their customers are well served and are satisfied at all times. The quality of the food served should be uniform as expected and pleasing to the customers at all times. The consistency practiced by the business has helped in upholding their standards, value, and reputations amongst the clients.

Food value and innovation at the premises has created a sense of trust between the business and the clients. The quality of food served by the fast-food industries is vital in the clients' face and instills a feeling of safety in the customers. The served food's safety and quality are easily determined by the restaurant environment, the health standards of the business employees, and the equipment used to serve the food. The excellent quality of the food served has helped the fast-food industries more successful since they have maintained a good standard of quality and safety. Developing new types of cooked food products with varying tastes has made the clients always want to keep close with the businesses. It allows them to have a taste of the range of food prepared in different methods and flavors.

Fast service and reduction in cost are enabled by the introduction of technology. Fast-food industries have adopted various measures in serving their clients. They have reduced the long queues at the serving points by the introduction of web-based order placement. The food can then be delivered at the customers' destination. Marketing trends primarily determine the cost of the food. The cost depends on the type of food served, the type of delivery involved, and the quantity of the food served.

Popular Fast Food Products

According to an article in the Business Insider written by Akcam, "Improving order processes with information technology," it is easy to establish the most favorite fast food products among the consumers (Akcam, 2020). The costing techniques are based on the sales and market trends for the given product. However, the research is not disputing the individual judgment and taste on a given product. The graph below displays the most favorite stock of food on fast service deliveries.

Moreover, the trend depends on each community's cultural norms and perceptions towards a given food product. McDonald's French Fries are one of the leading favorite foods for customers. It is ranked at the top among the fast-food served to customers internationally. McDonald's Big Mac is another food favored by the consumers besides chicken nuggets, mashed potatoes, McDonald's Happy Meal, and fish (Namin, 2017).

Impacts of Production Technology on Cost and Profits

The use of drive-through windows by the fast-food industries have translated to more profits for the businesses. It has helped in the provision of multiple deliveries of services. The system is considered as safe as the clients and the service providers interact through the windows. However, technology is a fast changing the trend. The automation of services is extensively being adopted by the fast-food industries (Chen, 2018). It is considerably cheap and more profitable as it involves the engagement s of fewer laborers. The growing technology has seen a gradual rise in the profit made by the fast-food industries in the United States. The engagement of families in places of work gives them little time to prepare food. Again, most of the people who stay alone would prefer buying ready-made food to cooking. Such has translated to increased purchase of fast food, thereby translating to high-profit margins.

The latest technological inventions in the fast-food industries include e-commerce, a web-based platform for processing orders. The automation of services is another critical technological invention that is offering relief to businesses. The introduction of technology in the fast-food industries has led to positive and negative impacts. It is efficient for the business since it reduces human labor and makes the automated machines multi-task. As a result, it has reduced the wages given to the employees. Again, the machines' maintenance may take less money compared to the amount paid to the casuals performing the same tasks. Reduction of the number of laborers translates to increased profits by the fast-food industries.

Fast Food Market Trend

The growing health concerns on specific types of food have made consumers fear them. Some scientists hypothesize the link between diets to sicknesses like diabetes, cardiovascular diseases, pressure, and low sexual virilities. The fast-food industries have adopted producing food with different dietary content but maintain the flavor. The use of fast food depends on age, sex, and occupational commitments. The graph summarizes the analyzed use of fast food among children, women, and men in the United States.

Significantly, the new trend has attracted consumers who consume the foods based on their favorite flavors despite the dietary content difference. The fast-food business industries are adopting service automation instead of using human labor. The system is considered safe and healthier than that done by human laborers. Wendy's, KFC, and McDonald's are accredited with the useful application and use of roots in carrying out their services. The automation of services is faster and secure than human service. The food menus from the fast-food industries like Wendy's have alternative options for various preferences. Such has enabled the potential customers to easily switch to favorites and have the room to select from various options.

General Challenges on Fast Food Industries

According to Thiemann in the article "Fast Food Sovereignty," fast food industries are faced with several challenges that business environments and efficient operations. There are talks of unsafe menus at fast-food restaurants (Thiemann et al., 2020). The growing concern for healthy food in the United States is fast-growing, given the health implications of unhealthy food. As a remedy, the industries have adopted a policy of informing the customers on the content of every food they serve plus the health implications associated with them. There are reports of unfavorable working conditions in the fast-food industry. They are reportedly paying low wages. The employees are said to be having hard times meeting their daily living standards and requirements due to the low wages from the businesses. Cultural norms are another factor that drags back the progress in the fast-food industries. Some specific food is specifically associated with some cultures while hated by other cultures. The cuisine is a favorite dish for the Mexicans but unpopular among the Americans. As a result, the fast-food industries have realized the need to do cultural research on every community to establish their favorites.

Conclusion

Technology is an exemplary aspect of carrying out businesses safely and effectively fast. It has reduced the production cost in processing and delivering fast food. Also, the adoption of technological techniques by the fast-food industries has helped realize an increased profit and build a good reputation. However, technology is threatening the human resource and personnel who largely depend on their livelihood industries. The use of technology should be practiced with caution. Its extensive use and adoption are threatening the employment and survivability of many people.

References

Akcam, B. K. (2020). Improving order processes with information technology: McDonald's case. Journal of
Information Technology Teaching Cases, 2043886919885938. https://doi.org/l O. 1 1770/02F2043886919885938

Thiemann, L., & Roman-Alcalä, A. (2019). Fast Food Sovereignty: Contradiction in Terms or Logical Next Step?.
Journal of Agricultural and Environmental Ethics, 32(5-6), 813-834.
https://link.springer.com/article/l O. 1007/s 10806-019-09800-4