Strategies for Max's Fried Chicken Restaurants: A fragmented industry

• Main Author: Tobias, Benigno G.
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Business Administration, Management, and Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2312
• Institution: De La Salle University

Maxs Fried Chicken Restaurants is the pioneer in the chicken segment of the restaurant industry in the Philippines. It has gained popularity, loyal customer and market, and good reputation for quality food and services since its inception in 1949. Its traditionally prepared fried chicken has become its key success factor for success, as this main product line has captured the taste of the Filipino consumers for many years. The major competitors of Maxs in the chicken segment of the restaurant industry at present include many firms and restaurant currently operating in the industry, but the closest competitors of the company are Kentucky Fried Chicken, Jollibee, with its Chicken Joy product, and McDonalds. Small market players like Savory and Pollo Loco are also competitors of Maxs The restaurant industry is composed of fine dining and specialty restaurants and fastfood chains. Its structural analysis using Porters model on the five competitive forces of competition showed the following characteristics: High Threat of Entry, because small firms will have difficulty in competing with large market players due to economies of scale, high start-up costs, problem in accessing distribution channels, and product differentiation in the industry. High Intensity of Rivalry Among Competitors. At present, the restaurant industry is composed of numerous big and small market players that outwit each other in a fierce competition for market being offered by loyalty. High Pressure from Substitute Products, as most of the products of the industry can be substitutes for the main products being offered by competitors. High Bargaining Power of Buyers and Suppliers, as the preferences of these two groups influence the production, marketing, and sales of the competitors in the industry, because these two groups have grown in numbers, with changing preferences and business operators in the past few years. Maxs Restaurant is perceived by consumers as a major market player in the chicken segment of the restaurant industry. It has a high name recall among consumers, and is preferred and frequented by a huge base of loyal customers. Among its strengths include a ready market and goo distribution channels, unique product line, efficient production process, and a sound financial condition. Its sets of weaknesses include the lack of a formal research and development procedures for market and product development, the lack of formal personnel department, low advertising budget, and an inadequate cash and liquid asset reserves for maturing obligations.