McDonalds Case Study

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- We place the customer experience at the core of all we do.

- We are committed to our people.

- We believe in the McDonald's System.

- We operate our business ethically.

- We give back to our communities.

- We grow our business profitably.

- We strive continually to improve.

Currently McDonald's is implying a global strategy that is called "Play to Win," which is designed to create a consistently excellent service for customer experience in McDonald's restaurants. The five key facets that are emphasized by McDonald's experience are people, products, place, price, and promotion.

McDonalds commit to these values to guide their decisions and behaviours as stated below:-

- TeamworkWe promote and support a diverse, yet unified, team. We hire experienced, qualified people who work together to meet our common goals.

- RespectWe honour the rights and beliefs of our fellow associates, our customers, our shareowners, our manufacturers and our community. We treat others with the highest degree of dignity, equality and trust.

- AccountabilityWe accept our individual and team responsibilities and we meet our commitments. We take responsibility for our performance in all of our decisions and actions.

- IntegrityWe employ the highest ethical standards, demonstrating honesty and fairness in every action that we take.

- InnovationWe are creative in delivering value to our fellow associates, customers, and community. We anticipate change and capitalize on the many opportunities that arise.

- DiversityWe value diversity in our stakeholders.

- EmployeesThe Welfare and Quality of Life of all employees is extremely important, as are their opportunities for Growth, Security, Empowerment, and Teamwork. Safe Behaviours and Attitudes are crucial.

- StockholdersOur Board of Directors is committed to the long-term prosperity of the company and its stockholders.

- CommunityWe are a good neighbour and citizen. We don’t pollute. We pay our taxes. We do business locally, and we are philanthropic.

Question 2:-

Identify and explain the Competitive Force of McDonalds using the Porter’s Five Force with relevant examples.

Porter’s five force is used to identify and analyze five competitive force that shape in every industry, it also helps to determine the industry’s strength and weakness. These forces are known as competitive in the industry, potential of new entrants into the industry, power of suppliers, power of customers, and threats of substitute products.

Competitive Rivalry or Competition with McDonald’s (Strong Force)

McDonald’s faces tough competition because the fast food restaurant market is already saturated. This element of the Five Forces analysis tackles the effect of competing firms developed in this industry environment. In McDonald’s case, the strong force of competitive rivalry is based on the following external factors:

- High number of firms (strong force)

- High aggressiveness of firms (strong force)

- Low switching costs (strong force)

The fast food restaurant industry has many firms of various sizes, such as global chains like McDonald’s and local fast food restaurants. Also, most medium and large firms aggressively market their products. In addition, McDonald’s customers can experience low switching costs, which means that they can easily transfer to other restaurants, such as Wendy’s, Burger King or even KFC. Thus, this element of the Five Forces analysis of McDonald’s shows that competition is among the most significant external forces on the business.

Threat of New Entrants or New Entry (Moderate Force)

New entrants can impact McDonald’s market share. This element of the Five Forces analysis refers to the effects of new players on existing firms. In McDonald’s case, the moderate threat of new entry is based on the following external factors:

- Low switching costs (strong force)

- Moderate capital cost (moderate force)

- High cost of brand development (weak force)

Because of the low switching costs, consumers can easily move from McDonald’s toward new fast food restaurant companies for example Burger King and KFC. Also, the moderate capital costs of establishing a new restaurant makes it moderately easy for small or medium-sized firms to affect McDonald’s. However, it is expensive to build a strong brand that could match the McDonald’s brand. Thus, this element of the Five Forces analysis shows that the threat of new entrants is a considerable issue for McDonald’s.

Power of McDonald’s Suppliers (Weak Force)

Suppliers also influence McDonald’s. This element of the Five Forces analysis shows the impact of suppliers on firms. In McDonald’s case, the weak bargaining power of suppliers is based on the following external factors:

- Large number of suppliers (weak force)

- Low forward vertical integration (weak force)

- High overall supply (weak force)

The large population of suppliers weakens the effect of individual suppliers on McDonald’s. This is especially so because of the lack of regional or alliances among suppliers. In relation, most of McDonald’s suppliers are not vertically integrated. This means that they do not control the distribution network linked to McDonald’s facilities. Also, the relative abundance of materials like flour and meat reduces suppliers’ influence on McDonald’s. Thus, this element of the Five Forces analysis shows that supplier power is a minimal issue for McDonald’s.

Power of McDonald’s Customers/Buyers (Strong Force)

McDonald’s must address the significant power of customers. This element of the Five Forces analysis deals with the influence and demands of consumers. In McDonald’s case, the