In Addition, McDonald’s has interactive kiosks that allow customers to order customized food according to their preferences. Hence, allowing McDonald’s to be cost leaders in the market. However, McDonald’s has utilized technology effectively to lower cost of production by teaming up with Echelon corporation and using Echelon’s Internet server to improve their kitchen equipment to lower energy consumption and increase data efficiency. This shows that McDonald’s faces a strong force of competitive rivalry. In addition, customers of McDonald’s can easily switch to other restaurants. There exist a high number of fast food restaurants of various sizes like Subway, KFC, Nando’s that aggressively market their product and pose a threat to McDonald’s. In case of McDonalds a few factors determine its force of competitive Rivalry.
Threat of substitute products or services is moderate.Ĭurrently, the fast food industry is saturated and McDonalds faces tough competition from big names in the industry like Starbucks and Burger King.Rivalry among existing competitors is moderate.The influence of the five force to McDonalds overall as follow below: market being the largest in terms of number of restaurants, revenues and operating income International Leads Market operating in Australia, Canada, France, Germany, and the United Kingdom which includes the most established markets with strong economies the High Growth Market holding potential of higher restaurant expansion and franchising operates in China, Italy, Korea, Poland, Russia, Spain, Switzerland, and the Netherlands while Foundational Market being the market which spans over the most diverse geographical area with potential to operate under a largely franchised model. market, International Lead Markets, High Growth Markets and Foundational Market. McDonald’s is operating under a new organizational structure starting from July 2015, categorized into four markets based on similar characteristics, challenges, and opportunities for growth. The company has also introduced different menus like salads, fish, smoothies and fruits in response to changing customer tastes in order to lock-in customers.
McDonalds primary products include burgers, french-fries, soft drinks, milkshakes, wrap and desserts. McDonald’s Corporation, incorporated in the year 1964, operates and franchises McDonald’s restaurants.Ī McDonalds restaurant is operated by a franchisee, an affiliate, or the McDonalds corporation itself. In the year 1955, a businessman Ray Kroc joined the company as a franchise agent and bought the company from the McDonald brothers. It was founded as a barbeque restaurant in 1940 by Richard and Maurice McDonald. It has over 36,000 restaurants found in 120 countries all over the world, serving 68 million customers each day. McDonald’s is an American fast food restaurant chain with its global headquarters in Oak Brook, Illinois.
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