As earlier stated corporate culture is a reflection of the national culture and the environment in which the organization operates. The national culture of a state should be adapted onto by the corporate culture for the organization to thrive in its operation The role of national culture the AIU expansion can be said to be effective and successful at the national level.
However, internationally, the excessive emphasis place on the national culture in the expansion operation in Africa and Asian countries, this aspect would affect the successful outcome of operations in these countries if not adequately considered and aligned with the cultural practices in the new environment it found itself.. Thus, this incompatible corporate culture and the existing national cultures in the international countries is a factor responsible for the unprofitable operations for multinational corporations.
The level of global competition in the fast food industry is always on the increase. This is adduced to the in flock of new entrants, the expansion of existing firms to other countries. Big name in the industry such as McDonald, which has over 23,000 restaurants in 110 countries, a close rival to MacDonald is Burger King which operates a total of 9,644 restaurants in 110 countries, followed by Wendy; second largest rival to MacDonald, with a total of 6776 restaurants in 32 countries, Hardee operates 3080 restaurants in 20 countries (McDonald. ca, 2005).
With this high level of expansion of major players in the fast food industry, coupled with the springing up of new firms entering the industry, these have led to the increase in the competition level in the industry. Organizations operating in this industry need to adequately strategize in its marketing activities for it to curve a niche for itself. The high competition level in the industry can be analyzed using Porter’s five forces.
The threat of new entrants in the fast food industry is significantly high, as there are new entrants springing up every moment. This is due to low capital outlay required in setting a small fast food business, also the basic skills required to run a fast food restaurant is basically not to high that would require long term training. And there are abundant of skill labor that can be recruited to man the fast food joint when created. These f actors are responsible for the ease at which new entrants flock the industry.
And this has helped in increasing the level of competition in the industry. According to Porter (1985), the intensity of rivalry among existing competitors depends on the balance of competitors, industry growth, the size of fixed or storage costs, the amount of differentiation or switching costs, the minimum size of investment, the types of competitors, the strategic stakes, and the size and type of exit barriers. Another threat to the industry in 2006 is the threat of substitute product or services.
In recent times, most fast food restaurants have come up with innovative pattern of preparing there food and service delivery; some have developed services for a targeted group in the society such as busy workers. This innovative w ay of operating leaves the customers, and those who patronize fast foods, many room to choose from the available substitutes. The treat of substitute product and services tend to reduce the level of profit that is available for the organization operating in the industry.
In this industry there are firms that produce similar products; this also tends to constitute a threat to the operations of f firms in the industry. The bargaining power of suppliers, who supply raw materials for processing the food in this fast food industry, is very high, since there are many firms operating in the industry they would have many buyers wanting to buy from them; thus increasing the demand level. Many big firms like McDonald, have engage on their own backward linkages programme, whereby they produce most of the foodstuff and livestock use in operating their fast food restaurants.
Buyers also may have high bargaining power in this industry, since there are different substitutes and operators in the industry; thus forcing the price down for buyers The strategic challenges thus facing firms in the industry in 2006 has to do with how they ca n strategize and carry out their marketing function in a way to make them have competitive advantage in the mist of the high competition in the industry. And profit maximization tend to be low if the marketing strategy is not effective enough to increase the level of sales made available to a firm operating in this industry.