Michael Porter's Five Forces Framework Research Paper

Michael Porter's Five Forces Framework - Research Paper Example KFC is has 44% of the total fast food market share in Malaysia and is the leading company. On the other hand, McDonald’s has 18% of the fast food market share and Burger King, Wendy’s, and other local companies take 18% of the market share. There are more than 365 fast food companies in Malaysia. The companies have opened many branches across the main cities. The availability of many companies in the market markets the competitiveness in the industry very stiff. Stiff competitiveness is very unhealthy for the new entrants in the markets as well as for the existing firms (Wilk, 2006). Highly time-constrained lifestyles in Malaysian have led to the food industry growth with many people having limited dining time. This has led to many eastern fast food companies from Dubai, China and Japan considering venturing into the industry. Many firms are entering the market because Malaysian has managed recovered from the meltdown of global financial market and its economy is performing well. The government policies are very good for the investors. Malaysia has also cultivated good relationship with other eastern countries such as China and Japan creating more trade between the two countries. This creates a threat for new entrants to the existing companies (Jargon, 2012). New entrants in the Malaysian Market have eaten away the share of some companies market share, for example, the market share of McDonalds was 20% in the year 2011 while in the year 2013 it reduced to 18%. On top of the first food companies that are many local hotels and food companies which act as substitutes to fast food. The demand for a fast food is increasing at 3.9% annually making the customers bargain to be very low (Jargon, 2012). The suppliers are facing high demand for their products increasing their bargain, which is a disadvantage to the fast food companies. In overall, the Malaysian food industry is very