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So, the threat of substitute products is quite high for a fast-food restaurant. Restaurants and other eateries are quite capable of selling the types of products sold by a fast-food joint, such as a burger or a sandwich. This situation is a disadvantage to a fast-food eatery. The determinant of the high competition is the high number of eateries selling quality products. The industry is chock-a-bloc with competitors-there are big brands such as McDonald’s and KFC, and medium and smaller brands, including local restaurants and bakeries, selling a variety of snacks and quick-eats. (3) Competitive rivalry among competitors So, this is an advantage for a fast-food outlet or chain. The determinant of the low suppliers’ bargaining power here is the lack of differentiation among the suppliers’ products (the existence of a number of reliable suppliers). Their bargaining power is low since there would be a number of suppliers of these items. The main suppliers in the fast-food industry are dough, dairy produce, and meat vendors. But the high bargaining power of the buyer is a disadvantage to a fast-food restaurant operating at the place. The determinant of the high buyers’ bargaining power, in this case, is the high number of sellers to cater to the buyers. The buyers have high bargaining power in a place where there are many fast-food joints, as they can choose any one of them.įor example, if the queue is too long at one outlet, the buyer can probably go to another outlet just across the road. To understand the impact of Porter’s Five Forces model, let us now look at each of the forces as though it is acting on a particular industry, say the fast-food industry of burgers, pizzas, and sandwiches. This is depicted in further detail in the template below.