Analysis Of Mcdonald's The Fast Food Industry

When Ray Kroc first laid eyes on the McDonald brothers' technologically advanced Speedee Service System, he saw it "through the eyes of a salesman" (Schlosser, 35). McDonald's has continued the tradition of viewing technology as a means of increasing revenue while decreasing the pay of the workers manning their restaurants. When the food borne illness outbreaks of E coli. and others emerged, the meatpacking industry regarded technology through the same lens. The industry has proved that they are more interested in profit than safety, overlooking safety concerns using technology. Both Kroc and the food industry perceived technology as a moneymaker, not a tool to improve mankind's safety and well-being.

McDonalds is a role model for other industries regarding its dominance over the value chain. The company is both vertically and horizontally integrated. McDonalds is known for purchasing farms, to raise and ultimately slaughter animals, to produce the meat for their products. This type of dedication to the value chain is what has made McDonalds so successful. McDonalds also owns the logistics and transportation lines that bring products to the restaurant. McDonalds has even created their own health insurance company to supply employees with health insurance, for a cost. It appears McDonalds is attempting to control the entirety of its value chain to, reduce its cost while maintain quality and in turn pass along some of that cost, these savings can be turned into a perceived value by the customer resulting in brand loyalty.

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

• Discussing the two forces of competition, which are threat of new entrants and threat of substitutes, and identifying the most significant of those forces for McDonald’s Corporation.

The oligopolistic market structure proves to be very efficient for the franchise in making its pricing decisions and developing and executing its own strategies. Actually, the structure enables McDonalds to know its rivals well and keenly examine their strategies and

McDonald’s has been in business since 1955. It has positioned itself in the market as a low-priced, fast food restaurant focusing on hamburgers and other convenience foods. The company is currently faced with competition from Chipotle, a restaurant which offers fast and healthy Mexican food in the fast-casual dining segment. Both restaurants are competing for customer dollars and while they both offer fast convenience there are differences in their food offerings. McDonald’s has always offered a fast, basic meal at a low price. In comparison, Chipotle offers fresh, quality Mexican food fast at a low price. Analyst have suggested that Chipotle would bring an end to the fast food burger chains that have long dominated the industry. McDonald’s must determine if Chipotle is a competitive threat and if so how to address the threat in the market.

Chapter ten begins with the author talking about his visit to Plauen, Germany. He then gives a description of the population before, during, and after World War 2, informing its readers that Plauen was abandoned after Britain bombed the city. Plauen was occupied by the U. S.A. and the Soviet Union during and after the war, and was a common place where protests broke out. According to the book, after the war ended McDonald’s was the first corporation to open a new building in the city.

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

McDonalds is by far one of the largest and most influential fast food chains in the world. This one corporation can change and influence a very large amount of the United States economy all on its own. If McDonalds were to go bankrupt and close all of its restaurants then millions of people would lose their jobs. McDonalds provides health care and other basic benefits to all of its full time employees, and without these benefits then these people would go uninsured and could not make it. McDonalds also makes up a very large amount of capital put into the United States economy by its customers. Many people who cannot afford to go to a nice sit-down restaurant opt to the much cheaper alternative and decide to go to McDonalds to buy food. A large

McDonald's has had a global impact on the food industry. McDonald's developed a revolutionary idea known today as fast-food. This impact began in 1930 when Maurice and Richard McDonald left New Hampshire seeking to make a fortune in Hollywood, started up a drive-in restaurant in San Bernardino. Unlike so many other food-service operations at the time, McDonald's came up with new ideas that turned the usual slow paced dinner into a finely tuned engine.

Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand

In 1954 Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in San

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).

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.

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.