Discuss About The Guidelines For Applying Forces Framework?
Al Baik is one of the biggest fast food restaurants in Saudi Arabia. It specializes in selling of broasted chicken and shrimps with different types of sauces. The headquarter of Albaik is in Jeddah where it has more than 40 branches. The company is further expanding itself in the central region of Saudi Arabia. The founder of the company is Shakkour AbuGhazalah. The company belongs to the fast food industry. Porter five forces will be appropriate for doing an industry analysis for the organization (Albaik, 2017).
Industry analysis using Porter’s five forces
The five forces of porter help in understanding the industry and the various factors affecting the organizations that fall in that particular industry. Porter five forces will be perfect for studying the fast food industry and how does it affect Al Baik.
Porter’s five forces: E. Dobbs, 2014
Threat of new entrants- Fast food industry is one such industry where new entrants keep entering the market. New entrants increase the competition in the market. In case of fast food industry the impact of new entrants very much, the consumers of the fast food industry like to experiment in terms of the food they try. Hence, whenever a new fast food company enters the market if their promotional activities are good, there is very high chance that it will attract many customers, later if their service is better than the existing companies they can easily become a market leader (Arline, 2015).
Threat of substitutes- The substitutes of Al baik are the bakeries, coffee shops, restaurants that provide meals like lunch and dinner and other food processed food products. The substitutes of fast food industry attract many customers, it depends upon the taste, preference and mood of the customers what they prefer to eat. This affects the business of Al baik. Some of the substitutes of Al baik are, Saadeddin pastry, Lusin, Al Orjoun and Nozomi often affect the business of Albaik, these companies though are not operating in the fast fast industry but it affects the business.
Industry Rivalry- There are a number of companies that operate in the fast food industry, these companies give a very tough competition to Albaik. Competitors come with many new strategies so that they survive in the competition. The main competitors of Al baik are Burger King, Hamdan 2, Elevation Burger, Pizza Inn are some of the competitors Al baik fast food restaurant (ALFaris et al., 2015).
Bargaining power of buyers- Bargaining power of the buyers compels the companies to provide discounts and various offers, this affects the business of Al baik because the fast food restaurant in order to remain in the business needs to give certain discounts to make their customers happy, they need to do this activities for promotion.
Bargaining power of suppliers- The suppliers who provide raw food materials for food production often exercise their power of bargaining and offers materials at a higher price. They use Halal chiken for preparing their broasted chicken. The Chickens is available from local poultry farmers and are prepared at AQUAT Food Industries and then they are brought to Al Baik (E.Dobbs, 2014).
Porters five forces framework can be used to do the industry analysis of the Al Baik, it belongs to fast food industry which is a highly competitive industry as there are many competitors and close substitute of the product. The bargaining power of the customers often puts the company at loss, since they have to gather the resources from various suppliers even the suppliers bargain and provide food materials at their price which is in most case higher.
ALBAIK. (2017). Albaik.com. Retrieved 26 September 2017, from
ALFaris, N. A., Al-Tamimi, J. Z., Al-Jobair, M. O., & Al-Shwaiyat, N. M. (2015). Trends of fast food consumption among adolescent and young adult Saudi girls living in Riyadh. Food & nutrition research, 59(1), 26488.
Arline, K. (2015). Porter’s Five Forces: Analyzing the Competition. Retrieved October, 16, 2015.
Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45