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Fast food


Submitted by:- Mohsana Iqbal

Almost everywhere you look you’ll see a familiar sign symbolizing
our fast food nation. You find them on the corners of streets, off the
side of interstates, airports, malls, schools, gas stations, your local
shopping center, and even in hospitals. More money is spent on
French fries than on higher education, personal computers, or new
cars! Looking at how our society has become faster paced, it is no
wonder less time is spent. Today, eating out definitely is part of our
fast paced lifestyle, not just a special treat as it was in years past

Fast food Industry

Is a form of
Monopolistic Competition

Monopolistic Competition Monopolistic competition exists when a

large number of sellers produce a product or service that is perceived by
consumers as being different from that of a competitor but is actually
quite similar. This perception of difference is the result of product
differentiation, which is the key to success in a monopolistic industry.
Products can be differentiated based on price, quality, image, or some
other feature, depending on the product.
Fast food industry, specifically talking about the growing trends in
Pakistan we can observe the growth in number of fast food outlets, with
various promotional activities being carried out to differentiate products
from one another; hence becoming a part of monopolistic competition.


 Mc Donald’s
 Subway
 B.B.Q Tonight
 Briyani Centre
 Students Briyani
 Lasania
 Lal Qila
 Salt n Pepper
 Eat-on
 Pizza Hut
 Pizza Express
 Indulge

Presently KFC is branched out in nine major cities of Pakistan (Karachi,
Lahore, Rawalpindi, Faisalabad, Multan, Peshawar, Sialkot, Hyderabad,
Islamabad, Jhelum, Gujranwala, Sukkur & Muree) with more than 45
outlets nationwide
McDonald's Pakistan opened its doors in September 1998 at Lahore and
presently operating in six major cities with a network of 20 restaurants.
With a strong belief in the Ray Krock phrase when you are green you
are growing, McDonald's Pakistan has an aggressive plan to expand in
all other cities of Pakistan and is rapidly growing with the focus to
provide friendly and quick service restaurant experience to our
Pizza hut
Pizza Hut first started operations in Pakistan by opening its first
restaurant near Bank's Square on The Mall in Lahore. It then expanded
to Karachi and Peshawar. The maximum numbers of Pizza Hut outlets
are in the thickly populated city Karachi. Now it also has restaurants in
Faisalabad, Rawalpindi, Islamabad, Hyderabad, Quetta, Sialkot and
First a few names were known to be capturing the markets large chunks
like KFC, McDonalds, Pizza Hut and etc. but now almost every street
you turn to you will find a new restaurant etc. Not only have more
producers entered along with increase in demand but the major market
shareholders are facing tough competition and are facing shrinkage in
their market share.

The demand and supply curve for fast food industry has shifted outward

The Major reasons for this change are the new taste, fashion trends and
For example:-

• First people preferred treats and celebrations indoors which meant

all the cooking and eating took place inside homes but now people
prefer going out.

• Previously going out for any meal was only at times of special
occasions, now people would go to any restaurant without having
to celebrate a special event. In fact now even for regular meal
people place their orders and receive home delivery rather than
cooking it for themselves.
• The increase in demand naturally attracted more suppliers,
increasing competition and supply in the market

• With the new lifestyle where people have less time it’s convenient
to have readymade meals Etc.
These firms are working under very a quite elastic condition as it’s
usually the case with firms under monopolistic competition.

This is because firms are working extensively on creating an image of

offering a differentiated item and also because of extreme price
competition because of which we can all observe the discount offers,
deals etc. being promoted by different fast food firms.
When consumers have so much variety (close substitutes available) then
these non-price competition strategies and especially price fluctuations
can influence potential consumer preferences.
Non-price strategies like creating a brand image, quality, locality,
availability etc. tends to encourage long run sales (that is consumers
coming again)
In short run firms operating in this industry might earn abnormal profits
till the competitors enter the market.

Because of extremely competitive market new competitors enter and

prices are lowered down, so in the long run they earn
Normal profit.
Firms under monopolistic competitive markets have somewhat control
on their pricing if they are able to establish a strong image and brand
For example Pizza Hut is charging more than Pizza Express, but the
customers whoare loyal customers of Pizza Hut would still go their but
probably in the long run the high prices would force some customers to
go for close substitutes (Pizza Express).
So it is possible that a firm in this industry might earn beyond normal
profits in the long run as well.
Macroeconomic factors have also influenced this industry in evryway.
Factors such as growth in population, global trading, employment rate
etc. are some very important and have influenced this and all sorts of
industries operating in different type of competition.
Pakistan’s majority is youth, the population is increasing, it’s a
developing country, more job opportunities etc. leads to change in life
style which influences our consumption and in Pakistan this is very
evident which is leading to willingness and ability to buy and supply in
the market.