Managerial Economics Term Paper

Managerial Economics Term Paper-53
After four years of record low prices, the International Coffee Organisation (ICO) composite price index shows average prices to be trending upwards.From an average price of 48 cents a pound in 2002, to 52 cents a pound in 2003, the first quarter of 2004 saw an average price of around 59 cents a pound.Cheeseburgers, hamburgers, double cheeseburgers with extra mustard, Sandwiches, French Fries, Fried Chicken, Pizza, Donuts, Apple/Banana Pie, Hot Dogs, Tacos, etc are amongst the most popular foodstuffs in the western countries; moreover, the globalization of the business world has led fast food items of different ethnicities to come and fuse together to form a range of new fast food items.

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Buysse (2010) assessed that the US citizens spend an anticipated US$ 185 billion on fast food consumption per year with is a contribution of 12% of the total national food consumption.

This data illustrates that the size of US Fast Food Industry is enough large.

(2010) reported that there are almost 49,888 Fast-food companies and chain shops in the USA and this number is increasing in every week where the major player are Arby’s Group, Burger King Corporation, Doctor’s Associates Inc.

Mc Donald’s Corporation, Starbucks Corporation, Wendy’s Inc., Yum Brands, Inc.

The number of firms in the industry indicates that the markets with huge numbers of firms would contribute further competitiveness rather than the market with little numbers of firms, thus Mc Donald face extra competitiveness in the US Fast food industry and enjoys more a major market share.

The firms who are working in the US Fast Food Industry have a strong relatively among them that evidenced huge competitiveness within the industry.

The fair trade lobby has certainly received a lot of attention of late as cappuccino consumers in the malls and high streets in developed countries have begun to voice their concern about the plight of coffee farmers in the less developed world.

Ten years ago, the world coffee market was worth $US30 billion and farmers received about $US10 billion.

The coffee industry has been experiencing significant difficulties in recent times, prices tumbling to all-time lows in real terms during 2002 (see Figure 1).

This has caused considerable hardship for coffee producers around the world, but at long last there appears to be good news.


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