McDonald's Financial analysis

Business Strategy Analysis: McDonald’s Corporation is the world’s largest fast-food chain in the restaurant industry, serving on average 69 million customers a day. Their stores are corporate or franchised owned, with franchising being highly beneficial to their success by producing 32% of their total revenue1. McDonald’s is in a highly competitive industry with market saturation because of low barriers to enter. The industry competes on price, quality, and service. McDonald’s faces competition with full-service restaurants and fast-food restaurants in the area. Their main competitors are Burger King, YUM! Brands, and Wendy’s International. The industry has faced scrutiny on the quality of their products because of a more health concise society. McDonald’s strategy for success is based off of cost efficiency, product development, and marketing and promotions. These factors help form the strong brand that McDonald’s is today. Since their establishment with Ray Kroc, they have focused on driving their success from the 3-legged stool principal representing: McDonald’s employees, the owner/operators, and their suppliers2. The stool needs all three to have a good balance in order to function, without either one of the legs success cannot be achieved. All three of them work together to create new products, to reduce costs, and to achieve outstanding customer service. There is commitment in helping all three legs of the stool to succeed. The suppliers play a key role by providing high quality products and forming trusted relationships with them. The franchiser represents McDonald’s by being in control of own operations. They are highly beneficial because they allow McDonald’s to grow at a much faster rater and in new markets to create a global brand. Also, economies of scale can be obtained by offering their products at a lower cost since it is a large scale. McDonald’s has implemented Plan to Win, which features five elements: People, Products, Place, Price, and

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