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With reference to the local area, would the opening of a new fast food restaurant represent a sound business proposition?

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Introduction

Business Studies Coursework Assignment: With reference to the local area, would the opening of a new fast food restaurant represent a sound business proposition? Preliminary information The aim of this assignment is to accertain whether a `fast food' restaurant would be a viable industry in the local area. I understand the term `fast food restaurant' as a business that provides short waiting times for food - usually lower than 5 minutes. Although this term encompasses many different types of business, the food is usually cheap relative to other `sit-down' restaurants and is used as a convenience stop rather than for very high quality food. The customer expects to be able to arrive, buy their desired choice of meal and have the choice of leaving with their purchase or staying temporarily to eat. The customer does not expect a high level of conversation and excepts that the staff are isolated with regards to the speed of production. The customer also expects that the staff are informed and have the appropriate knowledge to serve and distribute the orders efficiently and competently. Due to the nature of fast food, the only employee that has personal contact with the consumer is the `face' of the business and must therefore be able to answer questions on all aspects of the available items. This is unlike other restaurants where the expertise may be divided into groups due to the specialisation of the item or the quantity of information needed - for example a Semillon (wine waiter) will have specialist knowledge of the stocked wines. As well as this, fast food restaurants also have no `set' rules - socially or otherwise that dictate what is ordered. It is perfectly acceptable to order only an ice-cream or drink - usually associated with the end of a meal or the addition of something else. For a profit-making business to survive it must adhere to certain criteria: � It must supply goods or services. ...read more.

Middle

The weekday scenario may be different, but I believe the results would be almost the same even on a working day (there might be and increased number of visitors coming to Bungay for business reasons). � Most people coming to Bungay live nearby. The further away they live, the more unlikely it is that they will visit. This fits with the `sphere of influence' theory which suggests that a town or city's appeal lessens the further away it is. � Most people in Bungay are in their late teens or are in their twenties. This suggests that the large proportion of active consumers are less than 40 years old. � 83% of people thought that a fast food restaurant would be a viable business in Bungay - Although their knowledge of business economy may be limited and therefore insubstantial. � 88% of people used fast food restaurants. This suggests they are popular. � McDonald's and Burger King seem to have the largest clientele base, and as they are widespread, seem to have the best strategies and marketing. � Most people use fast food restaurants twice a month or more, implying that they provide consistent service and satisfaction. � Most people spend on average �5 to �10. The number of people visiting a popular fast food restaurant per day is usually at least 250 meaning that �2500 is made daily. This also shows that a meal is cheaper than many normal restaurants where a meal may cost over �20. � Most people are prepared to travel between 6 - 20 miles to eat at a fast food restaurant, although other factors such as the adjoining town and other services in the area may change this figure. For example - a fast food restaurant not usually the sole purpose for visiting a town - many patrons at Lowestoft's McDonald's use it for convenience after shopping in its extensive commercial area. ...read more.

Conclusion

From the data I have collected I can demonstrate why: � The initial conditions of Bungay are suitable - size, population, communication links, distance from other settlements etc are all beneficial to the placing of the restaurant. � The level of competition is low - there are no direct competitors, and few semi-direct competitors that pose a threat. � The level of demand is high - 88% of people asked used a fast food restaurant and 19% of these used it twice a week. Of the 88%, 60% spend between �5-�10 on each trip. McDonald's has a 45% share elsewhere and is the best client for a franchise. � Consumer bas is high - 32% of people asked were prepared to travel 10-20 miles to travel to Bungay. 75% of people asked were from Bungay. 42% were aged between 15-19 and are therefore easily targeted with advertising. I recommend that site 1 be used, and that the restaurant be opened under a McDonald's or Burger King franchise in order to increase the success chances. Evaluation Based on my questionnaire, site, and business management analysis. I believe that a fast-food restaurant would be a viable and successful business proposition. I could have improved my questionnaire by asking more people, at more varied times of the day, different days of the week etc. I could not do this as I was limited by time constraints. I could have improved my whole project by studying more than one town, and also by using information from actual business -writing to McDonald's to see how they gauge viability of a new site. By targeting the younger consumers with advertising, it will be increasingly socially acceptable to go there. My research suggests that the younger clientele are already more likely to go there, and extra advertising will reinforce this view. By attempting to target the older consumers who are not inclined to fast food, could work, although it is equally likely to be a drain of resources and money since they have more formed opinions about things. ...read more.

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