Porter's Five Forces Of Mcdonalds

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Industry analysis:The Fast Food Industry (McDonald’s)

NAICS 72221: Fast Food Restaurants. This industry is made up of establishments focused on the sale of prepared food and drinks for immediate consumption on or near the premises. Institutional and caterers and industrial organisations are also included in this business.

Related Industries:

Full-Service Restaurants

Grocery retailers

Grocery wholesalers

Packaged food manufacturing

Sub industries include:

Eating places Ice cream, soft drink and soda fountain stands, Coffee shop, Concessionaire Delicatessen (eating places) Frozen yogurt stand, Drive-in restaurant, Hamburger stand and Hot dog stand.

(Barnes, C. (2014))

McDonald’s is the global leader in the fast food industry. It has achieved this position as a result of effectively responding to the five forces of its industry environment. Michael Porter’s Five Forces Model identifies the most important external factors that influence business organisations . The environment of the fast food industry interacts with McDonald’s to affect the potential and success of the firm. McDonald’s current global success showcases that they are effective in identifying these five forces and overcoming issues they posses.
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In order for McDonald’s strategies to operate effectively they must align with the external factors in the fast food restaurant industry.

Competitive Rivalry (Strong Force)

McDonald’s faces high levels of competition because the fast food industry is highly condensed. This element of Porter’s five forces analysis examines the effect of competing firms in the industry. There is a strong force of competitive rivalry for McDonald’s due to the following factors:

•High number of firms (strong force)

•High aggressiveness of firms (strong
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