2. Critically discuss the factors you need to consider when planning to open and operate a food business.

Answers

Food Industry

1. Homogenization and heterogenization are two aspects of globalization which had also impacted the food industry. A large number of researchers are of the opinion that rising homogenization is mainly resulting in extinction of cultural diversity. In simple terms, homogenization on a global scale may be explained as the choice of the consumers of specific products from all over the globe which may or may not align with their own culture, traditions and preferences (Heimen and Lowengart 2014). This can be exemplified with the help of a case scenario. The food industry of McDonalds had gained appreciation since the time of its first outlet in the year 1955 under the governance of Ray Kroc in Des Plaines, Illinois (near Chicago) in United States. The food menu provided by the organization to consumers was based on their food preferences of the local people as well as the fast food culture of US. However, with gradual increase of years, the quality and taste of the food products of McDonalds was liked by people not only of the Western decent but was also liked by people all over the world. The eastern countries also became a fan of the food products of McDonalds (Misra and Surico 2014). Here it should be seen that although they have different food choices and different cultural traditions in preparing their food, but yet their liking for the McDonalds food product resulted the organization to set up stores in eastern countries. The brand dominated the fast food culture of many cultures like India, china and many others where people allowed the domination for the change of taste that brought innovation for their taste buds. The dominance of McDonalds on a global scale comes under the concept of global homogeneity which thereby means that even although, local cultures of food exists, however a dominant culture of food irrespective of religion, economic and social status dominated globally providing consumers with international products (Balogh et al. 2016). Process of globalization has also led to the development of concept of the cultural heterogeneity. It is usually developed through the increased emphasis on the elements of the local culture as well as also dependent on the religion tradition food, role of family as well as shared history. It has been seen that the customers who can afford food form the global organization belong to elite classes as the price of such food products can be afforded by such people only. Local people residing in a specific cultural society will obviously settle for their staple food as they have less money to afford international market. Therefore although the dominant culture of a particular food brand may dominant the entire world but locally or regionally, restaurants which sell staple food products will obviously gain attention due to the much lesser money or may be due to personal food choices of the local people. Hence providing a mixed state of taste with both international and local food is a good option. In such a scenario, when a restaurant incorporates a particular global culture within their preserved local or regional culture, it may lead to cultural heterozenization (Yue, Zhao and Kuzma 2015). This can be explained by an example. Often as Indians are lovers of spice and different sweet, sour and hot sauces in their food, McDonalds in the Indian sector are introducing products like ‘Mc aloo tikki’, using pudina sauce in their burgers and many others. Many western restaurants are also using Indian spices in their culinary items so that they can attract the Indian citizens of the locality in that part of the western country. This leads to cultural heterozenisation.

2. While staring a food business, certain important considerations are to be kept in mind.

• The first point that should be taken into consideration is to make proper strategies to properly fight the competition and come out victorious with the correct amount of profitability. As there is large number of restaurants of various kinds in every locality of different nations, every new entrant should have unique selling points which will make it stand out from the rest of the competitors resulting in higher success (Mullins 2013).
• The second requirement would be to test the products before releasing them to a large scale. Every new entrant should start with the salebility of the product on a small scale to the local community or the market before making major investments like signing a lease or buying major equipments. The initial customers would mainly serve as the test markets which will mainly act as the proof of connect during the business planning stage (Heinz 2013).
• The new entrants should make sure that as they are establishing a new food center, they must comply with all regulations so that they did not get entangled in different legal obligations. At first they should know that what specific regulation are applying on them and following that they should take proper measurements. This is necessary so that no obligations harm the reputation of the company before it been starts to see the face of profit.
• Creating a proper as well as realistic cash flow forecast is extremely important for starring with the food business. This is because in food business, it relatively takes a longer time to generate revenue and therefore a person coming into the business requires good amount of funds. Therefore, every individual should have a planned amount of budget in hands before setting with the flow (Collis and Hussey 2013).
• A new entrant should try and find out a stalwart in the food industry as a guide. Often valuable insight is very much necessary during starting and running of the business so that they can potentially save form huge loss of money due to making of costly mistakes. Even if the investors do not enter into a mentoring program, they can still take the help of advisors (Grimm, Hoffster and Sarkis 2014). These may include people within the same industry or professionals like accountant or lawyer. Moreover, the new entrant may also enter into the business after attending networking events which also help in meeting the relevant contacts in the community.

References:

Balogh, P., Békési, D., Gorton, M., Popp, J. and Lengyel, P., 2016. Consumer willingness to pay for traditional food products. Food Policy, 61, pp.176-184.

Collis, J. and Hussey, R., 2013. Business research: A practical guide for undergraduate and postgraduate students. Palgrave macmillan.

Grimm, J.H., Hofstetter, J.S. and Sarkis, J., 2014. Critical factors for sub-supplier management: A sustainable food supply chains perspective. International Journal of Production Economics, 152, pp.159-173.

Heiman, A. and Lowengart, O., 2014. Calorie information effects on consumers' food choices: Sources of observed gender heterogeneity. Journal of Business Research, 67(5), pp.964-973.

Heinz, H.J., 2013. Principles and practices for the safe processing of foods. Elsevier.

Misra, K. and Surico, P., 2014. Consumption, income changes, and heterogeneity: Evidence from two fiscal stimulus programs. American Economic Journal: Macroeconomics, 6(4), pp.84-106.

Mullins, J., 2013. The New Business Road Test: What entrepreneurs and executives should do before launching a lean start-up. Pearson UK.

Yue, C., Zhao, S. and Kuzma, J., 2015. Heterogeneous Consumer Preferences for Nanotechnology and Genetic?modification Technology in Food Products. Journal of Agricultural Economics, 66(2), pp.308-328.