RISKS AFFECTING INTERNATIONAL FAST FOOOR RESTAURANTS LIKE SUBWAY
Subway is one of many international fast-food restaurants facing threats of operating overseas. The fast-food industry requires diversification to maintain and overcome the challenges. Some of the significant risk factors affecting the fast-food restaurants are cultural and religious diversification, government interference, completion, and the gross domestic product of a country, among others.
Diverse culture and religion. We have different groups of people throughout the world, practicing different cultures and religions. Culture and religion influence the taste and preferences of most people. Some individuals do not consume certain types of meat, while others prefer less meat in their sandwiches, for example, the French. It is essential not to ignore the diverse culture in different countries. Instead, they should first try to understand the culture and religion of a country before setting up a restaurant to maximize success. Therefore, culture and religion diversification can be a significant set back to fast-food restaurants like Subway if ignored.
Increased competition. In countries such as Europe, competition in the fast-food business has risen dramatically. The Macdonald’s is subway’s main competitor, who has already managed to establish its brand globally. Increased competition causes saturation typically in the market, which in turn leads to more substitutes. Game is a risk factor that affects restaurants such as Subway, which, if not well managed, can lead to failure.
Gross domestic product (GDP). GPD directly affects the productivity of a fast-food restaurant. Countries with high GPD are seen to have a high sell in the fast-food business. The vice versa is also true; countries with low GPD have a challenge in the fast-food industry. Generally, we have fewer developed nations than the developing ones, thus a problem to the fast-food industry. This is because of the low GPD of some countries. This poses a challenge to restaurants like Subway as they cannot scale up to what they would want.
Presence of different legal policies. The legal policies of some countries can hinder the regular and swift operation of the fast-food industry. An example is a country with a low foreign exchange rate. Less exchange rates will restrict the active exchange of currency. Another challenge is government interference; for instance, the US. The US government restricts the exploration of specific technologies. Therefore, this poses a challenge to fast food like Subway to swing swiftly in abroad.
In conclusion, fast food restaurants such as Subway are subjects to risks such as cultural and religious diversity, increased completion, GPD of a country, and the presence of different legal policies. The risks can be challenging and very overwhelming. However, if fast-food restaurants like Subway can engage in a nonequity joint venture, they can be able to reduce the risks.