In this review, the food-restaurant business in Canada is discussed and how it plans to take advantage of the industry’s many prospects. These plans consider food- restaurants in Canada as external elements in the business’s environment. Food-restaurant business in Canada capitalizes on its strengths to deal with its challenges, such as the ones highlighted by this PESTEL and Porter’s five analysis. If the food service industry in Canada is to thrive and expand over time, it must be able to respond to changing consumer preferences. Food-restaurant businesses in Canada must make this adjustment in light of the intense rivalry in the worldwide food industry and the other risks detailed above.
2. PESTLE Analysis
2.1. Political Factors
Political actions and policies impact the Food-restaurant business in Canada and the economy as a whole, and this factor of the PESTEL study takes this into account. According to the PESTLE analysis, government action can speed up or slow down the food service industry’s growth. Better international trade, which strengthens worldwide supply networks, presents the Food-restaurant business in Canada Corporation with a chance to grow its global operations. More stringent regulatory standards for nutrition and health are both a threat and an opportunity, as revealed by the PESTEL analysis of the restaurant industry. For instance, according to Walker (2021), the food-restaurant business in Canada faces pressure from this external political factor because of the claims made about the health impacts of eating at restaurants. However, when viewed through the prism of the PESTLE study, this same external factor presents a chance for the fast-food chain to enhance its offerings.
2.2. Economic Factors
How the Food-restaurant business in Canada is affected by economic conditions and trends in the far-reaching or macro-environment is the subject of this PESTEL analysis. The success of a food service establishment is affected both directly and indirectly by economic conditions. According to the PESTLE study methodology, food-restaurant businesses in Canada can benefit from the sluggish but stable economic growth of industrialized countries like Canada.
2.3. Social/Sociocultural Factors
Regarding the Food-restaurant business in Canada, this part of the PESTEL analysis considers the societal factors that encourage or discourage its success. Consumers’ actions are influenced by social trends, which in turn affect restaurants’ macroenvironment and bottom line. This PESTEL analysis concludes that there is a chance for the Food-restaurant business in Canada to expand in Canada as a result of rising disposable incomes and the accompanying ability and propensity of consumers to buy fast food instead of preparing meals at home, which would save them money. This pattern is connected to hectic urban lifestyles, another external sociocultural factor taken into account by the PESTLE analysis of the restaurant industry (Oraman et al.,2018). Due to their busy schedules, many people choose to eat at fast food joints like Food-restaurant business in Canada.
In this Food-restaurant business in Canada PESTLE study section, external societal variables present significant chances for growth. The fast-food chain’s image is shaped in part by these external variables. Food-restaurant businesses in Canada, CSR and stakeholder management efforts help mitigate the disruptive effects of societal shifts on the corporation. However, more work is needed to mitigate these outside forces’ impact.
2.4. Technological Factors
This part of the PESTEL analysis considers how technological developments and related trends may affect the Food-restaurant business in Canada in the long term or macro-environment. Business adaptation to make the most of technological trends and resources available to the restaurant chain is crucial to the outcome of this external analysis case. Food-restaurant businesses in Canada could benefit from investing more in R&D to enhance their operations’ efficiency and productivity. Increasing the restaurant chain’s level of research and development activities is a key strategic goal in this PESTLE analysis. This PESTEL analysis also reveals that the company can improve its performance by increasing its use of automation, which is seen as a way to boost the restaurant’s output. In order to maximize the benefits of such increased automation, the Food-restaurant business in Canada may need to adjust its approach to operations management and productivity (Rust & Huang, 2012). The fast-food industry can benefit from enhancing its mobile services and reaching more customers via mobile apps, as shown by the PESTLE research. The corporation might anticipate revenue growth through mobile channels in light of the current technical trend toward more mobile food sales. Food-restaurant business in Canada has enormous openings for expansion in the PESTEL analysis’s technology factor.
2.5. Ecological/Environmental Factors
The natural environment trends that impact Food-restaurant business in Canada faraway or macro-environment are the focus of this PESTEL analysis. This report analyzes how ecological movements have affected industries and consumers, particularly in the food and drink sector. Food-restaurant business in Canada brand and the bottom line would benefit from enhanced sustainability and environmental policies. The opportunity of addressing the growing importance of corporate environmental initiatives and the demand for sustainable business practices is the focus of this PESTEL analysis of the restaurant chain industry. According to the PESTLE framework, positive ecological external variables like these could help food-restaurant businesses in Canada remain stable and flourish.
2.6. Legal Factors
Regulatory environments are analyzed in this PESTLE factor, which considers how laws and rules affect the Food-restaurant business in Canada. According to World Bank. (2018) the remote or macro environment of restaurants in Canada is shaped by changes in legal systems and new laws, which impose new or changed restrictions for doing business. Due to health regulations, fast food may be harder to come by in some offices and classrooms. In the framework of the PESTLE study, such a constraining factor represents a danger because it indicates that the Food-restaurant business in Canada revenues could fall in the impacted markets. In contrast, one restaurant business’ PESTEL analysis identifies animal welfare standards as both a threat and an opportunity.
3. Porter’s Five-Factor Model
3.1. The threat of Competing Products
Due to their proximity, restaurants are still in a cutthroat sector. In addition, restaurants in Canada offer a wide variety of pricing and have varying quantities of services and amenities. Canadian eateries may stand out from the crowd by providing enticing perks like free Wi-Fi, swimming pools, self-service options, and delivery to attract and retain consumers (Tai et al.,2020). New services or advertising campaigns introduced by restaurants might increase competitiveness in the food service sector. Because of this, many Canadian eateries have closed or merged with franchises. There is a lot of rivalry in the sector from places like grocery shops, delis, clubs, and convenience stores that sell food.
3.2. Bargaining Power of Buyers
In the food industry in Canada, customers are notoriously picky. This is because consumers nowadays are looking for good returns on their investments. As a result, food restaurants in Canada offers these kinds of services as add-ons to attract and retain a steady stream of consumers. It is possible that Canadian restaurants diners may demand discounts if they order food online and have it delivered to them. Customers now have more leverage in negotiations with restaurants because to these services (Walker, 2021). This suggests that providing first-rate services and goods is crucial to fostering customer loyalty for most food restaurants in Canada.
3.3. Rivalry among existing competitors
Increasing levels of competition can be traced back to a number of factors, including but not limited to: shifting consumer preferences and the introduction of new products and services; the proliferation of rival businesses; the rising cost of raw materials; and the rising cost of employee benefits and insurance. Canada is home to a wide variety of international cuisines, including German, Chinese, Italian, and African.
Many factors distinguish one restaurant from another, including menu variety, food quality, service, cleanliness, adherence to health department records, pricing point, ambiance, and overall dining experience (Suttikun, 2021). Even with stiff competition, food-restaurant business in Canada has been successful in meeting the needs of its consumers while also expanding to take advantage of economies of scale.
3.4. Barriers to Entry
The high cost of starting a business in the restaurant industry is the primary obstacle to new entrants. For a restaurant to succeed, it needs cutting-edge gadgetry, top-notch service, and innovative advertising. However, some promotional channels, like the Internet, may cut down on the price of promotion in the beginning. After the competition enters the market, it may be challenging for restaurants in Canada to stand out from the crowd with their offerings. When trying to stand out from the competition, most restaurants focus on their service, location, view, and amenities. This demonstrates to patrons that dining at restaurants in Canada is a worthwhile investment.
3.5. Bargaining power of suppliers
The availability of ingredients, cleaning staff, and other necessities could be impacted as a result. Changes in the makeup of the working-age population could have an adverse impact on the availability of workers in Canada’s hospitality sector. Restaurants may pay more or receive less of a certain ingredient because of the market’s lack of available alternatives or a shortage of available suppliers. This opens the door for suppliers to negotiate cost increases. Farmers, traders, and other businesses that provide food and other goods to restaurants are essential to the success of the restaurant business. The market scarcity and lack of alternatives for farm commodities give suppliers bargaining power. The industry’s profitability is in jeopardy due to the suppliers’ bargaining leverage. It’s possible that the bargaining strength of various suppliers varies widely.
This PESTLE and Porter’s five analysis of Canadian eateries identifies numerous possibilities for expanding the industry. Canada’s restaurant industry should expand its presence in fast-growing nations, experts say. Growth in the service sector can be stimulated, for instance, by expanding the number of food-related businesses present in rapidly developing Asian nations. The increasing purchasing power of consumers is another factor addressed by this suggestion, which the PESTEL study identifies as a positive for the restaurant industry. However, this PESTLE research suggests that Canadian eateries should increase their CSR initiatives to take advantage of emerging environmental prospects. Reducing the food industry’s ecological footprint should be a top priority. Further goals include elevating the status of the brand and improving the general opinion of Canadians towards the restaurant and food industries.
Oraman, Y., Unakitan, G., Konyali, S., Basaran, B., & Abdikoglu, D. I. (2018). WHAT EXTERNAL AND INTERNAL FACTORS AFFECT THE ORGANIC FOOD SECTOR?. New knowledge Journal of Science, 7(2), 33-44. http://science.uard.bg/index.php/newknowledge/article/viewFile/359/pdf_80
Rust, R. T., & Huang, M. H. (2012). Optimizing service productivity. Journal of Marketing, 76(2), 47-66.
Suttikun, C. (2021). “Where Should We Eat?”: How Health Consciousness Moderates the Influences Driving Intentions to Purchase Healthy Food. Journal of International Food & Agribusiness Marketing, 1-29.
Tai, C. L. P., Sou, R. O. P., & Lam, C. C. C. (2020). The role of information technology in the food industry. In Food and Society (pp. 393-404). Academic Press.
Walker, J. R. (2021). The restaurant: from concept to operation. John Wiley & Sons.
World Bank. (2018). World development report 2019: The changing nature of work. The World Bank.