Mcdonald's Corporation Case Analysis

1624 Words Aug 10th, 2008 7 Pages
McDonald’s Corporation Case Analysis
Name left out
BUSN 412 Business Policy
July 27, 2008









CASE ANALYSIS
MCDONALD’S CORPORATION
COMPANY NAME: McDonald’s Corporation
INDUSTRY: Fast Food
COMPANY WEB SITE: http://www.McDonald’s.com/corp.html
COMPANY BACKGROUND:
The first McDonald's was built in 1940 by the brothers Dick and Mac McDonald.
In 1954 Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in San
Bernardino, California. The following year, 1955, Kroc opened his first restaurant in Des
Plaines, Illinois and the McDonald’s’ Corporation was created. By 1957 a company motto had
been created; Quality, Service, Cleanliness and Value (Q.S.C. & V.) In 1961 Kroc bought out
the McDonald brothers for all rights
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Threats: McDonald’s has a few threats that are a concern to them. The growing strength of the competition from Burger King and Wendy’s, among others, has decreased their market share. They need to think of new and appealing food items. The more health-conscious consumers become, the less likely they will want to stop at McDonald’s for lunch.
PORTER’S FIVE FORCES MODEL:
The threat of new entrants: According to our text, the threat of new entrants is the possibility that the profits they make in an area may be eroded by new competition. The McDonald’s by me competes with Burger King, Wendy’s, Dairy Queen, and other smaller places like Zel’s. Each time a new place opens the less business they will have. For the other company, there will be a barrier to entry. They will have to use product differentiation to bring in the customers…to make them overcome their loyalty to McDonald’s (Dess, p. 53).
The bargaining power of buyers: Buyers have more control over an industry than one might think. They want lower prices, higher quality, and more services and this makes the competitors play against each other. The profitability suffers as each competitor tries to make their product or service better (Dess, p. 54). McDonald’s has a $1.00 menu as does Burger King and Wendy’s. Each time I go into either of them there is a better item added to the $1.00 menu. For instance, McDonald’s has the scrumptious Double Cheeseburger and Wendy’s has the…