McDonalds is one of the most recognized brands in the world, and has been highly successful over the course of its history. The company current has revenues of $22.7 billion and assets of $30.2 billion (MSN Moneycentral, 2010). This report will utilize a number of tools to analyze the strategy of McDonalds, and how the firm deals with its environment.
The first tool to consider is Porter's Five Forces. This tool outlines the different cost and price drivers within the industry. Pricing power both on the supply side and the demand side is critical to maintaining profitability. The five forces are supplier power, buyer power, threat of new entrants, threat of substitutes and intensity of rivalry (QuickMBA, 2010). McDonald's has tremendous power over its suppliers for a couple of reasons. Its volume is great, and many of its suppliers are dependent on this volume. The inputs are not especially differentiated, which gives McDonald's switching power to hold as leverage over its suppliers. McDonald's has moderate pricing power over its customers. The company has a strong brand, and this drives business to McDonalds. Competition reduces this pricing power, but consumers are less price sensitive with McDonalds than they are with many other fast food chains.
There are few barriers to entry, although it should be noted that McDonalds enjoys significant economies of scale and it is difficult for competitors to build to that level. There is a high threat of substitutes, in other burger chains, other fast food and other eating options entirely. That there are a number of other players in the industry results in a highly intense rivalry. Firms compete on brand, on food type and on price in this industry, so to succeed means being better than rivals at all of these things at once. Overall, this is an unfavorable industry in which to operate because other supplier power, most of the forces imply a lack of pricing power from which to derive...
According to Kerin, et al., (2003) all employees posses some form of power to interrupt the smooth running of operations by deciding to be uncooperative in the production processes, or just by terminating their services. Workers may abide to the power of the company, though they usually maintain a strong interest in their employment. Thus, employees and employers, to certain degree, are interdependent. As such, the company cannot depend only
McDonald's Corporation: Assessment Of Process Strategies Assessing McDonald's Process and Location Strategies: Best Practices in Quick Service Resturants (QSRs) McDonalds' Corporation has over decades of experience with its supply chains, sourcing and procurement networks learned how to create an optimally balanced fulfillment network to support is thousands of QSR locations globally. In order to achieve the economies of scale the company has been able to rely on for continued profitable operations, the focus
But if you're looking at it as how many nutrients are you getting for a dollar, it's the least economical." New findings on the biological effects of fast food suggest that obesity isn't simply down to a lack of an individual's self-control. Some scientists are starting to believe that eating too much of foods that are excessively high in fat and sugar such as those from fast food restaurants can
McDonald's Restaurants Order 'McDonalds Restaurants From as far back as 3500 BC to around 2900 BC, according to the History of Communication, at About.com, the author, Mary Bellis, notated that the Phoenicians developed the alphabet within this time frame while the Sumerians found cuneiform writing which was a form of pictographs of accounts on tables made of clay, and Egyptians had built hieroglyphic writing. It wasn't until 14 AC when the Romans
On the job, workers have complained that "clock card entries being altered by managers to save on labour expenses," is rife, as is being forced to work beyond the stated limits of their shift. Retention McDonald's employees and managers have alleged that retention is deliberately kept low, to avoid paying benefits and raises, and because new, less well paid workers can easily fill the rote jobs. "Most of the crew in store
McDonald's Corporation This is an attempt to study the history and development of one of the great institutions of United States and a part of the images of the country that has spread in the whole world. As is well-known, the dominance of the world by United States came after the Second World War when the traditional leaders of United Kingdom and Germany lost their predominant positions due to the destructions
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