Analysing Mcdonalds (Fast Food Outlets) Using the Porters 5 Forces Model – Sometimes Called the Competitive Forces Model.

McDonalds is a fast food restaurant and its purpose is to provide the best and fastest customer service so in this way it will give the organisation a good reputation and help them to make more profit.

About everyone at some age, at some point or another, and in some country has gotten a sample of American's symbol for fast food through the golden arches of McDonald's. This report will attempt to analyze the external and internal sectors that affect the company's success. The external analysis will provide opportunities and threats while the internal analysis will show indicators of strength and weakness. It will then follow up with critical issues, strategic alternatives, recommendations and implementation. The case studied is found in Appendix 2 of Mary Coulter's "Strategic Management in Action" book.

Porter (1980) emphasized that suppliers to an industry may be powerful if they are more concentrated than their customers and their customers do not command a significant share of their business because their customers do not represent a potential long-term or major relationship, for example, one-off or small customers versus regular or bulk buyers.

| McDonald’s is a food service retailer and aimed at making profit and its restaurants are owned and operated by local people worldwide. Its mission is becoming a leader in food sector and best customer service according to their needs. Their main product is food.

In contrast with McDonalds their success is from globalization. Since the early 1940’s McDonalds has been a burger business, and accomplished to be the first one’s to become global. McDonalds has invested into several community organizations that helped the business to earn trust from the communities and gave more of a positive outlook towards their restaurants. They support their own employees, their families, and other groups of society in every country where it has business. McDonalds has website links to promote healthy living for kids, teens, and Latin and African Americans. McDonalds Happy Meals, McDonalds for teens, Me Encanta, and 365Black. They have corporate governance, which shows in detail of their operational structure. There is a whole webpage that is dedicated to explain about what is their drive to stay successful, what the board of

The bargaining power of buyers is affected by the concentration and number of consumers, when buyer power is strong, they gain the power to choose between producers and ultimately equip themselves with bargaining power which then the producers will have to conform to in order to produce profit, under these conditions the buyer has the most influence in determining the price of products. Also when buyers have strong bargaining power in the exchange relationship, competition can be affected in several ways. Powerful buyers can bargain for lower prices, better

The McDonalds Corporation’s strong internal workings also serve as benefits. In 2005, Fortune Magazine listed McDonald's as the "Best Place to Work for Minorities." McDonalds also invests more than $1 billion annually in training its staff, and every year more than 250,000 employees graduate from McDonald's specialized training facility called Hamburger University [4]. McDonalds also offers scholarships and opportunities to earn college credits for their employees who are still in school [5]. Internally McDonalds also has high standards for food safety regulations. While this might not be more to avoid lawsuits than to take care of their customers, McDonalds claims to go above and beyond national regulation to bring its customers a clean and health dining experience [5].

The main problem from McDonald's case, McDonald's Polishing the Golden Arches, is how to classify McDonald's strategy through Plan to Win into one of the five generic competitive strategies. Before we solve this main problem, we should determine the chief economic and business characteristics, the five forces analysis, and also the driving forces of the fast-food industry. After that we identify the strengths, weaknesses, opportunities, and threats by using SWOT analysis. Finally, we classify McDonald's strategy into one of the five generic competitive strategies.

The second force that acts on the industry is the threat of new entrants. Fortunately for McDonald’s and it’s over 30,000 restaurants world-wide, the corporation has set itself in a position of dominance. Using a growth strategy, “McDonald’s is continuously expanding its reach which makes it increasingly difficult for new fast food restaurants to enter the industry, through franchising, McDonald’s is able to reach nearly every corner of the globe” (Shell, Ellen Ruppel).

REFERENCES•www.mcdonalds.com, accessed on 18 July, 2008•www.mcdonldsindia.net, accessed on 18 July, 2008•en.wikipedia.org/wiki/McDonald's, accessed on 19 July, 2008•http://www.associatedcontent.com/article/263943/mcdonalds_strategic_marketing_mix.html?cat=4, accessed on 19 July, 2008•www.kfc.com, accessed on 25 August, 2008

Products and Services: McDonald has to continuously evolve its menu to meet the emerging customers need and to attract new customers. Currently, nutritional value has become very important for customers.

McDonalds obtained an additional customer base and this had a positive impact on sales. Also McDonalds have sponsored past Olympics and this increased the demand of a product especially the Big Mac, they also gained free publicity and this also increases the customer base. This avoids customers to switch to competitors and this means that they will obtain a healthy and stable profit for the future. In the past year if a customer bought a meal from McDonalds the customer would receive a cup as part of their purchase. This increased the amount of customers they get and it also made McDonalds stand out from its competitors. A unique selling point of products differentiates McDonalds from its competitors because they will be more customers visiting the restaurant and this will result to increase of sales.

Since McDonald’s is the most well know fast food chain in the world with a market cap of 69.35 billion, brand recognition is their biggest strength. The secret of McDonald’s success is its willingness to innovate and maintain consistency in the operation of its many outlets. In recent years McDonald’s has introduced Premium Salads, Snack Wraps, fresh Apple Dippers in the United States, and Corn Cups in China. Also, McDonald 's products are priced so low that economic conditions are almost insignificant.

line with the existent nature of McDonald's premises and business model. Thus, it is recommendable to

Since Richard and Maurice McDonald founded in 1948, McDonald's has grown from a small restaurant in California into one of the most recognized brands in the world with a chain of outlets that spans the globe. For over 50 years, McDonald's defined the fast food industry while indelibly etching its golden arches logo on the face of both American and global culture through such icons as character Ronald McDonald and the Big Mac sandwich. Millions of people started their very first jobs at McDonalds while even more began to have their eating habits redefined by the chain. Concepts like the drive-thru window were introduced along with the Happy Meal for children in order to provide a fast, affordable, and enjoyable dining. Ray Kroc, saleman