The impact of UK obesity crisis on fast food industry

The impact of British
obesity crisis on the
fast food industry:
2043 Outlook
Report
Enterprise World Futures
2013
459945
University of Portsmouth
1/1/2013

Student number: 459945
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Executive summary
This report provides a set of possible scenarios for the future of the fast food industry in the
UK in 2043 in the light of the current obesity crisis. These are based on the result of series of
foresight and strategic tools, such as trend analysis, systems dynamics, scenario development,
Porter’s Five forces, industry life cycle, value chain analysis and stakeholder mapping.
The scenarios bring together a full picture of possible futures, based around the following
uncertainties: Government intervention, Healthy food awareness, Environemtnal concern,
New product development. This leads to three scenarios depending on whether each axis is at
one extreme or the other:
 “Fast food is the new tabacco”, where government interventions to tackle obesity and
health concerns result in the industry being pushed out of the main stream market and
instead focused on a niche customers.
 “Fast food is healthy”, where the industry takes advantage of innovation and technology
and tackles its unhealthy image with the launch of variety of heathy products, customised
to buyers’ nutritional needs and taste preferences.
 “Fast food is dead”, where the industry enters decline because of changes in nation’s
lifestyle. Here, the value of family and social interaction replace the demand for
convience and home cooked, home-grown food is consumed thanks to technological
innovation at home.
The report looked at McDonalds as an example of a fast food company in order to anticipate
how can main players use their strengths and weaknesses in order to adapt to the changing
environement. The strategic analysis resulted in “Fast food is healthy” scenario being most
plausable, although elements of the other two were also found applicable.

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Contents
Executive summary....................................................................................................................2
1. Introduction............................................................................................................................5
2. Trend Analysis.......................................................................................................................8
2.1. Obesity data ........................................................................................................................8
2.1.1. Data..................................................................................................................................8
a) Obesity trend..........................................................................................................................8
b) Related trends ........................................................................................................................9
2.1.2. Quality of data................................................................................................................13
2.3. Systems thinking...............................................................................................................14
2.4. Scenarios...........................................................................................................................18
2.4.1. Scenario 1: – ‘Fast food is the new tobacco’ .................................................................20
2.4.2. Scenario 2: – ‘Fast food is healthy’ ...............................................................................21
2.4.3. Scenario 3: ‘Fast food is dead’.......................................................................................22
2.5. Summary of industry response - scenarios .......................................................................23
3. Justification and critique of reponse ....................................................................................24
3.1. Justification of response....................................................................................................24
Porter Five forces.....................................................................................................................26
Industry lifecycle .....................................................................................................................27
Value chain ..............................................................................................................................27
3.2. Critique of response ..........................................................................................................28
3.2.1. Suitability and Acceptability..........................................................................................28
3.2.2. Risks...............................................................................................................................30
4. Conclusion ...........................................................................................................................31
Referencing..............................................................................................................................32
Appendices...............................................................................................................................36
Appendix 1. Media coverage – obesity (Source: The Author) ................................................37
Appendix 2. BBC Articles on childhood obesity (Source: Google)........................................38
Appendix 3. Summary of PESTEL (Source: The Author’s research )...................................40
Appendix 4. Porter’s Five Forces ............................................................................................41

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Appendix 5. Industry life cycle................................................................................................43
Appendix 6. Value chain – McDonalds...................................................................................45
Appendix 7. Stakeholder analysis – Suitability, Acceptability and Feasibility.......................47

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1. Introduction
Western populations are reported to be experiencing a growing prevalence of obesity
(Department for Work and Pensions UK, 2008).
Obesity, particularly within the UK, has been spoken of as a national crisis (Appendix 1).
Figures show that as many as 30.3% of children between 2 and 15 years-old are overweight
or obese (National Child Measurement Programme, 2012). Figure 1 emphasizes the serious
consequences of obesity. Childhood obesity is likely to evolve into adult obesity, resulting in
another generation of ‘heavy’ nation (ibid.).
Therefore, this report sets out to examine the challenges and opportunities for the UK fast
food industry, which came out as a result of obesity. In particular, the report explores how
over the next 30 years, obesity combined with other trends will impact the industry. Figure 2
illustrates the number of factors that are found to cause obesity.Table 2 outlines the main
terms, used in this report.

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Figure 2. Causes of obesity (Source: Butland et al., 2010).

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Table 1. Definition of terms (Source: Adapted from NHS, n.d.; WHO, 2013; Rayner
et.al., 2004)
Term Definition
Obesity Obesity is defined as a excess of body fat, which is found to be caused
by consuming more calories than burning, and increase the risk of
developing a number of serious and life-threadtening diseases.
Fast food industry This report will look at the fast food indusrty.
The terms fast food is defined as the inexpensive food, such as
hamburgers and fried chicken, prepared and served quickly (Free
Online Dictionary).
A term used across the media is HFSS (high in fat sugar and salt),
which is used by the UK Food Standards Agency (FSA) to describe:
pre-prepared meals that are served in fast food restaurant chains or
ordered as a takeaway.
Tiumeline The report looks in changes that will happen in 30 years time, as this
is considered enough time for a change in generation.

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2. Trend Analysis
2.1. Obesity data
2.1.1. Data
a) Obesity trend
Table 2 demonstrates the current records for childhood obesity within the UK (NHS, n.d.).
Table 2. British childhood obesity (Source: NHS, 2012)
In 2010, just over a quarter of adults in the UK were obese and data shows it has been rising
year on year – Figure 3.

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Figure 3. Adulthood obesity in the UK (Source: NHS, 2012)
In the media, too, a lot of ‘noise’ has been created on the topic. Search engine discovered
over 30 articles from BBC alone on obesity between 2006 and today (Appendix 2). These
discuss causes, consequences and actions to prevent obesity within the UK.
If trend extrapolation approach is adopted, it can be expected that obesity will keep rising
unless change in environment takes place (Gordon, 2009; Senge, 2006).
b) Related trends
In order to understand the above trend, one must look at these related to the causes of obesity
(Figure 2), such as societal, food, and activity environment. Table 3 below represents some
of the key findings in these areas.

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Table 3. Related patterns of behaviour (Source: The Author, extracted from literature)
Area Pattern Signals
Political Public health policies to
promote healthy food
The Department of Health puts tackling obesity on
their agenda, mainly by promoting healthier food
and more excersise. They predict if their
recommendations are followed the obesity trend
should start shrinking by 2020 (Soubry, 2013,
March 25).
Public sector actions –
schools are promoting
healthy food
Schools start using “walking buses”, provide free
fruits for young children and enforce “Water is
Cool” campaign. (Lobstein and Leach, 2007)
Schools are introducing “carrot” vending machines
to replace unhealthy snacks’ machines (Langlois et.
al., 2006).
Economic Cost of obesity is rising Cost of obesity is increasing and is over £3 billion
for the UK (The economic burden of obesity, 2010).
Taxes increase
on fast food industry
Governmet starts puting higher taxes on drinks and
food with HFSS content. This can make products
more expensive for consumers but also less
profitable for companies (HFSS advertising
restrictions – final review, 2010).
Price of commodities is
rising
British food prices to rise after poor harvest (Winch,
2012)
Social Healthy food is
becoming popular
Healthy food industry is the fastest growing food
industry (HFSS advertising restrictions – final
review, 2010).
Level of excersise is
increasing amongst
pupils.
Health and wellness industry is the fastest growing
industry (Health & Wellness in the Food and
Beverage Sector, 2009).
Population is aging The aging population in the UK causes changes in
all levels of society and industries (Young, 2002)
Transparent and ethical
production and
There is a demand for detailed product labelling as
consumers are more informced and desire food

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packaging education (Public Attitudes Towards, And Use Of,
General Food Labelling, 2010)
Technological New technology is
developed to improve
food quality and
nutrition as well as
portion size
Nanotechnology usage in food production (Harris,
2010).
Electronic plate to monitor food consumption
(Noronha et. al., 2011).
Social media Social media and digital marketing are rising with
an increasing speed (Arno, 2013)
Environmental Food industry reacts to
accommodate the need
for healthy food
R&D becomes the key area for investment for
companies within the food industry (Langlois,
2006).
The rise of the ethical consumer is observed by
readiness to spend more on healthy food (Gortmaker
et al., 2011).
Envrionmental concerns The UK food economy is directly responsible for
greenhouse gas (GHG) emissions equivalent to at
least 32 million tonnes of carbon. This is a rising
concern amongst polititians and the society
(Murphy-Bokern, 2008)
Legal Fast food advertising
decreases due to legal
restrictions
UK bans TV advertising during family time (HFSS
advertising restrictions – final review, 2010).
According to these, there is a general movement towards healthier lifestyle in order to tackle
obesity in each level of our society. This is mainly because obesity has become a political and
social issue (Langlois et. al, 2006). It could be argued that government interventions are
likely to influence the behaviour of the major players in the fast food industry by 2043.
Moreover, social awareness on the problem of obesity and its consequences, combined with
aging population, are likely to increase in the next 30 years. It is argued that these trends will

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unfold within a generation – Figure 4. This explains the chosen time horizon for this report –
Generation 3 and 4.
Figure 4. Generation effect (Source: McPherson, Marsh and Brown, n.d.)

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2.1.2. Quality of data
The above data can be interpreted in two ways: authority (Pierce, 2008) and dependency
(Gordon, 2009).
Authority of the source
It is important to recognise that media’s role is to entertain not enlighten (Cornish, 2004).
Therefore, many of the articles that record above trends are uncertain. However, this report
assumes that articles, produced and used by government, are to an extent reliable.
Dependency on other factors
It is also relevant to recognise that some patterns assume trend extrapolation (Gordon, 2009).
This is likely to influence the report’s analysis. As the systems diagram will show below,
trends depend on each other.

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2.3. Systems thinking
Systems diagram provoked questions such as what are the underlying causes of obesity and
how variables interact to formulate UK food enviroment – Figure 5.
It was found that globalisation of the industry and the subsidaries for basic comodities’ affect
the production cost (Flores and Rivas, 2013). Particularly, positive correlation between
government subsidaries and prices of healthy and unhealthy food. Therefore, main players
within the industry were able to produce efficiently and launch thousands of cheap food
products that today shape our food environment (Royle, 2005).
Figure 5 - A) illustrates systems archetype – an outcome of this reinforcing loop is that if
large producers of cheap comodities continue to receive support, brands are likely to continue
to take advantage and produce more of these products – causing the initial malnutrition
problem to excelarate. This provides evidence that government intervention and social health
concerns are the key drivers of this environment (Blay-Palmer, 2008)
Figure 5 – B demonstrates positive correlation between the demand for these foods and
perceived lack of time. Specifically, the abundance of “empty calorie” food, combined with
the long-hours culture and “time is money” attitude in the UK is found to correlate with the
demand for fast food (Blay-Palmer, 2008).
Finally, the systems dynamics illustrate that key factors of this environment are government
intervenition, healthy food awareness, environmental concern and new product development.
The next section looks at these to factors to formulate fast food industry scenarios (Fahey and
Randall, 1998) to discover alternatives posibilities of the development of the key factors.

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2.4. Scenarios
A multidimensional approach was adopted to create Figure 6 - A) and B) in order to consider
changes in the key factors, identified in the previous section. Using deductive approach
(Faley and Randall, 1998), three scenarios were created to envision the possible response of
the food industry - Figure 7, 8 and 9.
Figure 6. A) Scenario matrix one (Source: The Author)
Government intervention
+
+
-
Obesity
Healthy food awareness
Fast food is
the new
tobacco
Fast food is
healthy
+
-
-
Fast food is
dying

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Fast food is a
niche
industry
New product development
Fast food
saves the
planet
+
-
-
Environmental concern
+
Figure 6. B) Scenario matrix two (Source: The Author)
Home cooked
food is back
Obesity
-
+

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2.4.1. Scenario 1: – ‘Fast food is the new tobacco’
Figure 7. Scenario 1 (Source: The Author)
Emphasis: everyone gets sufficient healthy nutrition
Method: Government
Value: Health
 Aging population increases and there is still obesity crisis – this is why the
government’s action aim at dealing with health primarily.
 Mac Big power begins to erode in UK and moves to developing nations.
 Government regulations on food industry increase.
 Strong policies and unions work to ensure that Food Agency standards are applied
within the food industry.
 Government pulls out subsidiaries from major agricultural businesses such and
moves funds to fruits and vegetables.
 This causes the price of fast food products to rise (due to production costs)
 Advertising is minimal, only during late hours.
 The consumption of fast food is age-regulated.
 Fruits and vegetables in local restaurants are affordable.

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2.4.2. Scenario 2: – ‘Fast food is healthy’
Emphasis: Novelty and personalisation in food products
Method: Technology
Value: Convenience
 Technology and new product development in the food industry is moving fast.
 Obesity rates are stabilised but emphasis is on improving quality in taste, portion sizes and
nutrition.
 Big brands are using customer service, digital technology, social media to make their
products appealing and personalised.
 Fast food comes with “healthy plate” that measures the speed of consumption.
 Government supports local schools to install vending machines with carrots and
asparagus.
 There is a total supply chain control within the fast food industry to ensure quality is
maintained.
 Nanotechnology is used to improve quality and size of fast food meals as well as taste –
broccoli can taste like chips, chocolate, chicken, name it – it can be served with the press
of a few buttons.
 Production techniques allow for efficient produce that saves the environment.

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2.4.3. Scenario 3: ‘Fast food is dead’
Emphasis: sustainability and home “infrastructure”
Method: Technology and Social media
Value: Family
 Comfort and family time and environmental practices are of greatest importance.
 The earth resources are deployed massively.
 There is a re-orientation towards local produce. Food waste is controlled and avoided.
 Ethics in food and having “enough” food not abundance.
 The supply chains are shorter and people are growing food at home, instead of buying
from global brands. Urban gardening and home fruit pods appear everywhere in UK.
 Fast food industry is dying.
 Working practices become open to flexible working and working from home, focusing on
work-life balance.
 There is a general tendency to spend family time, cook together and eat together at home.
 Technology and “white goods” such as robot cook allow this to happen quickly,
efficiently and effectively.
 Elderly people stay home and cook for their immediate family.
 There are still obese children but slowly recovering.

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2.5. Summary of industry response - scenarios
Depending on the key uncertainties and their movement, three responses have been
identified:
Scenario 1: Fast food industry becomes niche industry, serving specific customers, who are
likely to be less aware of its negative effect on their body or even if they are – its taste and
instant energy drows them back to it. Government regulation and lack of subsidaries
complicates production and increases costs, therefore price of fast food products. UK nation
is health oriented dealing with aging population and obesity. However, economical stability
allows for subsidising healthy food, which is the main food resouce.
Scenario 2: Fast food industry adapts and turns its products healthy via technology. The large
brands go an extra mile with personalised products in taste and nutritional values to take care
of their customers. Eating out or ordering take-aways are common practice but obesity is less
of a concern. Technological production allows for ethical threatment of resources and
environmentally friendly products.
Scenario 3: Fast food industry is coming to an end. This is caused by re-orientation towards
family values, such as cooking and eating home. Such practices are easy and quick because
of home technology and better work-life balance. As the demand for processed and ready
meals goes down, many major players leave the industry and move to food retail, which is
key to allow cooking from scratch. Environmental concerns have made people grow food in
moderation, at home and prepare food ethically.

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3. Justification and critique of reponse
3.1. Justification of response
The above analysis illustrates that the fast food industry is pressured by the obesity crisis.
However, it also illustrates how a number of supporting trends and key forces also interact
with the food environment and therefore are likely to play an important role in the industry’s
response – Figure 10.

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These translate in the following threads and opportunities for the industry – Table 4.
Table 4. Key threats and opportunities for the fast food industry, based on foresight analysis and
futures view (Source: The Author)
Key Threats Key Opportunities
Government subsidiaries
Government ban on advertising
Healthy substitutes (health awareness)
Commodities prices
Lifestyle changes
Environment exploitation
Technological enhancement
Social media and digital communications
Clever foods invention (nanotechnology)
Focused market (niche)
In order to assess the alternative futures, a closer examination of the industry is required.
The fast food industry is a huge industry in UK – Figure 11, which has been growing despite
recession (Poulter, 2012).
Figure 11. Size of fast food industry in UK (Source: Poulter, 2012)

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Porter Five forces
Competitive rivalry within the industry is high (Appendix 4). The table below presents the
main players that operate within the UK.
Table 5. Key competitors within the fast food industry (Source: The Author)
Segment Main players
Sandwiches: Greggs, Thurstens, Subway
Burgers McDonalds, Burger King
Pizza Pizza Hut
Chicken KFC
Fish and chips Independent
Indian or Chinese takeaway Independent
They need to sell high volumes in order to break even as they differentiate with price, not
quality. Moreover, as the threat of substitutes is high – the industry is likely to be
significantly affected by changes in consumer behaviour and new trends in healthy lifestyle
and/or home cooking. This is increased by the low switching costs for buyers, who are
mainly choosing products because of convenience (Appendix 4). This justifies why Scenario
2 and 3 are plausible alternatives of the future.
However, it is also important to recognise that the fast food industry has so far proven
flexible and adaptable to upcoming trends (Marketline industry report, 2012). A few
examples are McDonald’s new healthier food launch with products such as Deli Choices
wraps, Burger King’s promotion of UK Chief Medical Officers’ adult physical activity

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guidelines on its website, KFC’s involvement in Public Health responsibility deal in March
2012, etc (ibid.). This increases the likelihood of Scenario 2 unfolding.
Industry lifecycle
Due to the maturity of the fast food industry, the main players are likely to be looking for a
way to differentiate (Appendix 5). Naturally, it is likely that the industry needs that next step
in order to rejuvenate or grow again (Babu, n.d.).
According to Mintel report, fast food is adapting to the consumer demand for more ethical
healthier and transparent produce (Marketline industry report, 2012). Evidence is found in the
fact that major brands are creating more and more weight-watchers/ slim/ ‘something-free’
options (ibid.). This again is advocated in Scenario 2.
Equally, the industry might instead enter decline. If the government intervention about
advertising restrictions, quality and price continue then can be that the main players move
towards a smaller segment of customers or change direction altogether – Scenario 1.
Value chain
Appendix 6 illustrates McDonalds’ value chain as the company is one of the main and most
significant players within the fast food industry (Salisbury, 2013). Low labour costs and
mostly cash based business is win-win situation for the company (Marketline industry report,
2012). However, it can also be argued that this structure makes McDonalds and similar
company vulnerable to market conditions such as basic commodities prices and consumer
behaviour. Moreover, advertising is a powerful tool for major brands like this one (Christian
and Gereffi, 2010). Therefore, if government is to influence the way these companies market,
they are likely to go into major decline, explaining the reasons behind Scenario 1.

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Based on McDonalds’ value chain, it could be argued that the company posses the following
strengths and weaknesses: Table 6.
Table 6. Key strengths and weaknesses of McDonalds, based on the company’s value chain
(Source: The Author)
Key Strengths Key Weaknesses
Brand
Flexibility
Adaptability
Speed
Customer service
Tastes
Price
Dependent on agriculture (commodities) prices
Heavily dependent on advertising
Perceived as unhealthy
Cost leadership position can be easily copied
These were matched against key opportunities and strengths identified from the future
environment in order to investigate the suitability of Scenario 1, 2 and 3 – Appendix 7. The
results are analysed below.
3.2. Critique of response
3.2.1. Suitability and Acceptability
If we look at the main stakeholders, we can see that customers and the government have the
highest stakes in the industry future direction along the industry main players themselves.
Further, it is important to recognise that fast food brands are dependent on the raw material
costs in order to maintain competitiveness within the overall food industry (Appendix 7).
Finally, the flexibility and innovativeness by some of the main brands within the fast food
industry have been proven resilient for years. Based on these, an assessment of the three
scenarios is explained below:

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Scenario 1 (Appendix 7.A)
This version of the future proposes that the Government is the key stakeholder who controls
the food environment, with the support of the nation. In this case, the industry is considered
to fail to respond quickly enough and suffers from the unhealthy image of its products.
Industry players are considered to focus on their brands and re-position themselves to serve a
niche of customers. However, this scenario ignores the global power of some of the key
players of the industry. Moreover, it does not elaborate on the lifestyle changes that will
allow for other type of food to have dominance. Critical for its unacceptability is the costly
implications for the government, having to invest heavily in agriculture in order to allow for a
balanced diet to be affordable.
Scenario 2 (Appendix 7.B)
Scenario 2 proposes that the industry will be able to capitalise quickly on its strengths and
penetrate the market via technology and advertising. In this case, the technology industry acts
as a supporting industry as well as environmental-friendly policies, which allow for the fast
food industry to turn healthy and ethical. The main strength of this scenario is that it
replicates the innovation and technological advancements that the industry has observed
through past experiences. Moreover, it focuses on customisation and convenience, which are
some of the trends likely to extrapolate in the future. Therefore, this response is assessed as
more acceptable.
Scenario 3 (Appendix 7.C)
The stakeholder mapping revealed that Scenario 3 presents a very radical version of the
future and more of a non-response of the industry. It considers that the industry’s players will
not attempt to fight back and survive. Although, industry life cycle theory assumes that any
industry will eventually go into decline, some argue that it only changes direction

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(Maksimovic and Phillips, 2008). Although, a few of the changes in the environment and
society explained by Scenario 3 are plausible extrapolations of the presence, it is unlikely that
the fast food industry will not attempt to capture a segment of the market or change
accordingly. This also depends on the strength of competition presented by other parts of the
food industry – home cooking, food retail.
3.2.2. Risks
Scenario 2, although most likely to be the industry reponse, is highly dependent on speed
technology will develop and continue trends such as obesity, and environmental
consequences. Moreover, the capacity of the fast food industry to adapt is critical in this
version of the future.
This version of the future, however, is not intended to be exhaustive or to claim to represent
accurate predictions. In fact, a combination of all three scenarios may develop, depending on
the key uncerstainties analysed.
The bias and inconsistency of the analysed data adds doubt to the likelihood of this reponse.
Finally, author’s assumptions may have unintendently influenced direction of the scenario.

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4. Conclusion
The above analysis shows the significance of obesity within the UK. Moreover, it represented
a version of the future direction of this trend, working in combination with other identified
patterns of behaviour across the British society. As emphasised above, the main
considerations for the fast food industry are how quickly is it going to be able to innovate and
introduce new products in order to improve its image for being unhealthy and dangerious.
The scenarios presented in this report provide a platform for the key stakeholders to discuss
current issues and develop resistance towards treats as well as take advantage of
opportuntiies.
Word count: 2,442

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Page 36 of 49
Appendices

Page 37 of 49
Appendix 1. Media coverage – obesity (Source: The Author)

Page 38 of 49
Appendix 2. BBC Articles on childhood obesity (Source: Google)
Date Title Link
Sep 19,
2010
Virus 'link' to childhood obesity www.bbc.co.uk/news/health-11346682
Jun 14,
2007
Child obesity 'a form of neglect' news.bbc.co.uk/2/hi/health/6749037.stm
Apr, 2011 Obesity www.bbc.co.uk/health/physical_health/.../obesi
ty.shtml
Jan 20,
2011
Parents 'do not recognise obesity in
their children'
www.bbc.co.uk/news/health-12226744
Mar 6,
2006
Childhood obesity 'to double' http://www.bbc.co.uk/worldservice/learningeng
lish/newsenglish/witn/2006/03/060306_fat.sht
ml
Mar 1,
2010
Obese children show signs of heart
disease
www.bbc.co.uk/2/hi/health/8538426.stm
Dec 15,
2009
Child obesity trends 'suggest class
divide is emerging'
news.bbc.co.uk/2/hi/health/8412796.stm
Jul 23,
2012
Severely obese children's hearts
already in danger
Nov 3,
2009
Child obesity 'is levelling off' www.bbc.co.uk/1/hi/health/8338456.stm
Oct 3, 2012 MP wants free schools meals for
obese children
www.bbc.co.uk/news/uk-england-devon-
19813670
Jul 16,
2010
Parental failure over child obesity is
'neglect'
www.bbc.co.uk/news/uk-10661772
Dec 14,
2011
Obesity rising slightly in primary
school leavers in England - BBC
n.d. Childhood obesity 'set before age of
five'
http://www.bbc.co.uk/learningzone/clips/childh
ood-obesity-set-before-age-of-five/5836.html
Jan 5, 2013 Consider tougher regulation in
obesity fight - Labour
http://www.bbc.co.uk/news/health-20914685
n.d. Can computer games prevent
childhood obesity?
http://www.bbc.co.uk/learningzone/clips/can-
computer-games-prevent-childhood-
obesity/8388.html
Jun 6, 2012 BBC News - Viewpoint: Childhood
obesity and passive parenting
www.bbc.co.uk/news/world-us-canada-
18335892
Mar 14, Study links womb environment to www.bbc.co.uk/news/health-17234033

Page 39 of 49
2012 childhood obesity
Apr 14,
2011
Childhood obesity could cost
London '£111m' a year
www.bbc.co.uk/news/uk-england-london-
13078956
Aug 15,
2012
Should extremely obese children be
taken into care?
May 23,
2012
C-section 'may double risk of
childhood obesity'
n.d. Radio 4 - The Report, Childhood
Obesity
www.bbc.co.uk/programmes/b01lv5v9
n.d. Radio 4 - Case Notes, Childhood
Obesity
http://www.bbc.co.uk/programmes/b00pg4xj
n.d Health: Childhood obesity http://www.bbc.co.uk/health/physical_health/co
nditions/obesity2.shtml
Nov 28,
2012
Childhood obesity 'can be predicted
by check at birth'
Feb 9, 2013 Cornwall project to tackle child
obesity
www.bbc.co.uk/news/uk-england-cornwall-
21393583
Apr 21,
2006
Child obesity 'doubles in decade' news.bbc.co.uk/2/hi/health/4930264.stm
Oct 2, 2012 Childhood obesity: 10 of your stories www.bbc.co.uk/news/magazine-19743173
Dec 12,
2012
Third end primary school
overweight
Mar 8,
2013
Child obesity: Who are you calling
fat?

Page 40 of 49
Appendix 3. Summary of PESTEL (Source: The Author’s research )
Political
Fast food advertisement ban
Location of fast food /not close to schools or
other youth institutions
High tax on confectionary and soft drinks
This is all putting pressure on operational costs
for the industry => players likely to look how to
decrease costs
Economic
Economic crisis
Transportation prices increase
Food prices globally increase
This may result in the need for less
transport/import of food in UK and more local
products
Social
Obesity
Life expectancy
Consumption behaviour
Busier life – urbanisation, long hour work culture
Here the need for changes in consumption
behaviour will become obvious – so that the
children obesity crisis can be tackled but also
challenges to provide healthier food with same
speed convenience and price as fast food
Technological
Nanotechnology
Information availability
Social media
Social media and information availability has an
impact on consumer behaviour as the consumer is
now much more empowered to educate
themselves using the Internet and more likely to
use it for the decision-making process of their
purchase. This is becoming more and more true
for children too.
Nanotechnology creates the opportunity to
process food locally at a cheaper price. With
nanotechnology you can fit lots in small size –
this can have effect on good nutrition and portion
size.
Environmental – OPPORTUNITIES
Ethical consumer/ trade to save the planet
Demand for less fertilisers, greener way of
producing food.
Legal – OPPORTUNITIES
Government actions ->regulations in force
But how to overcome resistance from big brands

Page 41 of 49
Appendix 4. Porter’s Five Forces
(Source: Adapted from Marketline industry report, 2012).
Forces Strength
Competitive Rivalry
The competitiveness in the industry is relatively high due to the
number of big and small players in the fashion industry.
The competitiveness also increases because the fast food industry
in the UK is part of the global fast food industry and includes the
main players, such as MacDonald’s, KFC and Burger King.
Although Macdonald’s was the leading brand accosting to over 16%
of overall value sales in 2011, there are a large number of
independent operators, accounting for a dominant 76% of outlets.
They compete mainly on diversity of products and price of products
are they are highly dependent on volume sold.
Bargaining Power of Buyers
Because of the high competition and many brands within the
industry – there are low switching costs for the buyer. Therefore,
changes in consumer attitudes and perceptions about fast food will
most likely impact seriously the main players. This lowers the
switching costs for the buyer and increases their power.
There are many takeaway places and fast food restaurants that
provide same products and service.
The power of the buyer is also increased by the information age and
more research about brands, products, health, ingredients, etc.
Bargaining Power of Suppliers
The suppliers in the fast food industry are meat producers,
vegetable retailers, beverage producers, etc.
It could be argued that their power is relatively low as they are
High
High
Low

Page 42 of 49
dependent on major big brands to sell their production.
The Threat of New Entrants
It could be argued that the threat of new entrants is relatively low as
there is a need for large economies of scale and experience
compared to other industries.
Settings up costs may seem low initially but contracts with suppliers,
cost leadership, access to distribution channel are not things done
quickly.
Thread of Substitute Products
It could be argued that thread of substitutes is increasing, especially
in the era of ethical consumer and health-conscious nation.
Moreover, although the fast food industry proved to be resilient
during the recession, it is very price sensitive and if the prices go up,
it is likely that people may choose to eat out instead (more value) or
have ready meals from supermarkets instead.
Moderate/Low
High

Page 43 of 49
Appendix 5. Industry life cycle
(Source: The Author)
Introduction Growth Shake-out Maturity Decline
Analysis:
The industry started to enter its growth phase back in 1970 and franchising allowed the
industry to expand rapidly, globally. The industry proved adaptable and quickly served the
changing needs of consumers, with changes of families’ structures, longer working hours and
demand for cheap convenience food(Flores and Rivas, 2013).
Around year 2000, there was already hundreds of takeaway and fast food restaurants,
however, the growth started slowing down due to recession and low disposable income.
Rejuvenation

Page 44 of 49
Flavour innovations and improvement in the supply chain as well as production costs,
stabilised the industry and caused its growth in the years up to now (Marketline industry
report, 2012).
Two main factors caused the shake-out an profitability of the industry up to this point. First,
fast-food chains offer good value: they are cheaper and price is proving to be a key factor in
their dining out experience. Second, busy schedules and fast-paced lifestyles increase the
demand for convenience and simple mealtime solutions. As a result, they visit fast-food
restaurants or order takeaways (Babu, n.d.).
It could be argued that the industry is in maturity phase. However, a significant proportion of
the population continues to perceive fast food as unhealthy. Therefore, either a decline or
rejuvenation is expected in the years to come. This will depend on how quickly and
successfully main companies innovate and respond to current trends.

Page 45 of 49
Appendix 6. Value chain – McDonalds

Page 46 of 49
Firm Infrastructure
Brand recognition, Leadership, Financial Strength, Company image, Intellectual property (brand),
Franchasing.
Inbound
Logistics
Operations Outbound
Logistics
Marketing and Sales Service
Economies of scale
Just-in-time order and
delivery
Sustainable
packaging
Renewable resources
Supply chain control
Quality control
On-line & on-site
kiosk job
application system
Reinforced
information system
Wireless headsets
Wi-Fi offered in
location
R&D in target
customer
demands and
trends
Distributor
agreements,
Quality control
Refrigerated
trucks
Product – new
offerings often
Price – cheap
Promotion – Coca-
cola endorsement,
Feeding the athletes
Olympic sponsorship
Fast food service
Order accuracy
Clean
environment
Friendly staff

Page 47 of 49
Appendix 7. Stakeholder analysis – Suitability, Acceptability and Feasibility
7. A) Scenario 1
 G –
 Government
 C – Consumer
 F R – Food retailers
 R – Restaurants
 E – Environmentalists
 M – Media
 A – Agricultural business
Key threats
Government subsidiaries
Government ban on advertising
Commodities prices
Key opportunities
Focused market (niche)
Key strengths
Brand
Key weaknesses
Heavily dependent on advertising
InterestInterest
Impact
High
HighLow
Low
G
C
F R
R
Industry
E
A
M

Page 48 of 49
7. B) Scenario 2
 G – Government
 C – Consumer
 T – Technology industry
 S - Scientists
Key threats
Healthy substitutes (health awareness)
Key opportunities
Technological enhancement
Key strengths
Flexibility
Adaptability
Tastes
Key weaknesses
InterestInterest
Impact
High
HighLow
Low
G
C
F R R
Industry
E
A
T
S

Page 49 of 49
7. C) Scenario 3
 G – Government
 C – Consumer
 SM – Social Media
 Em – Employers
 T – Technology industry
Key threats
Lifestyle changes
Environment exploitation
Key opportunities
_________________________
Key strengths
_____________________
Key weaknesses
Interest
Impact
High
HighLow
Low
G
C
F R
R
Industry
EA
SM
Em
T

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