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1. Introduction
The quick service restaurant (QSR) industry in South Africa is undergoing major transformations attributed to increasing globalization and domestic market trends. The global and domestic market trends driving this industry include growing competition, westernization of diets, food safety, demographic changes, periodic surges in domestic food demand, technology innovations, and increasing demand for food sustainability value creation ([36] Pingali, 2007; [30] Maloni and Brown, 2006; [2] Amaeshi et al. , 2008). These trends have resulted in a major restructuring of the food industry and value chain realignment to enhance competitiveness ([20] Haggblade, 2011). The ability of the QSR industry to respond swiftly to these challenges is central to its future survival and growth. The aim of this paper is to examine the rise of South Africa's QSR industry (also known as the fast food industry) with emphasis on the influence of globalization and domestic trends on value chain reconfiguration and competitive strategy making. This study is based on the premise that failure to craft and execute proactive competitive market positioning strategies that deliver long-term sustainable competitive advantages spells negative consequences for the industry in terms of poor customer reputation, market share erosion, and diminishing profitability prospects.
The ongoing restructuring in South Africa's QSR industry has transformed the food industry landscape, food consumption patterns, and the intensity of industry competition. South Africa has experienced a 69 percent rise in gross national income per capita (i.e. from $3,610 to $6,090) between 1994 and 2010 (World Bank). In addition, the country has seen an increase in its black middle class, labor force participation by women, and rural-urban migration. These key domestic market trends are being manifested through increased consumerism and fast food consumption. Just like in other emerging economies where per capita incomes have been rising, the tradition of eating home-cooked meals has declined in South Africa. As both household incomes and standards of living rise, more people are affording to eat out. Globalization and westernization of diets is also driving fast food consumption patterns ([36] Pingali, 2007). Further, the fast food industry suffers tremendous pressure periodically from foreign tourists and other international visitors to improve its meal solutions, service offerings, customer responsiveness, and global competitiveness.
The QSR industry was previously dominated by an oligopolistic market structure...