Mcdonalds Porters Five Forces Model Essay

1184 Words5 Pages
Analysing McDonalds (fast food outlets) using Porters 5 Forces model – sometimes called the Competitive Forces model. Introduction McDonalds Canada opened in 1967, thirteen years after McDonalds had taken the United States by storm. This was the first restaurant to be opened outside of the United States. It was in 1965 that McDonalds went public and offered shares on Wall Street. Since then it has been important for McDonalds to continually monitor its performance, to make sure it is competitive and profitable while also being aware of its immediate community responsibilities. This can be achieved by using the Porters 5 Forces model so the company is able to determine where its business needs to change or improve in order to stay…show more content…
Some of the newer entrants include chains of Sushi restaurants like Sushi Itto and organic fast food restaurants like O!Burger. To stay competitive McDonalds need to constantly analyse what these new entrants are providing to the public in terms of product and service. Threat of Substitute Products Substitution of McDonald’s products and services is always possible, but we need to look at the ease in which these can be substituted by the consumer. If we are looking simply at the supply of food for consumption it can be seen that alternatives are generally available. We may choose; however, to look at the convenience of having food available as well as a place for children to play and having close washrooms, thus McDonalds is managing to provide all of these to the customer in one location. It is the provision of all of these products and services under one roof that manages to set McDonalds apart from its competitors. Bargaining Power of Customers The bargaining power of customers is, on one hand, one of the strongest forces in this model, and one that is least able to be manipulated. If McDonalds is not providing what customers are looking for then theyt will take their business else where. The consumer is there to be served, and a business would not survive if it did not provide what a customer needed. However, on the other hand, if McDonalds looses one customer through
Open Document