Final MC Donald

McDonalds Case study
By:

Yadira McCullough
Balakrishna Velineni
Norberto Roman
Sudaramurthy
Vallinayagam
Sanjay Kalingu

Agenda
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Executive summary
Environmental factors
Porters Five Forces
Case Questions

Executive Summary
• One of the key ongoing issues is the nutritional values of fast food it offers its consumers.
• McDonald’s also faces the issues of:
– Providing consumers good quality food at
– Good prices with profitable growth in a competitive fast food industry.

Porters Five Forces
Threat of Suppliers:
•McDonalds and its suppliers are dependent on each other
•McDonalds took the initiative to create a sustainable supply and develop quality and food safety standards.
•For Example when McDonald’s decided to introduce healthy food items it:
– It chose Peterson Farmers to supply its apples, blue berries and cherries.
– McDonalds’ chicken supplier, Tyson began using better quality chicken to supply the ingredients for its chicken nuggets.

Threat of Buyers:
•Due to low switching cost of buyers
•McDonalds’s developed a framework that allows them to adapt locally
•McDonald’s also focus in specific products for each market segment depending on the current trends, health, prices and innovation

Porters Five Forces Contd …
Threat of Rivalry
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Intensity of rivalry is high
Main competitors are Burger King, KFC & Wendy’s
Introduced Mccafe coffee beverages to compete with Starbucks coffee
Zero switching costs lead to heavy competition
Introduced breakfast menu to compete with breakfast chain restaurants
Introduced healthy foods in the menu to compete with Subway and improve the brand image

Threat of new Entrants
– Threat of new entrants is low to moderate
– It’s difficult to compete with McDonald’s with their product differentiation, low cost products and better customer service
– It is one stop food chain for breakfast, coffee and regular menu and at the same time provide healthy snacks – Large capital investment needed in marketing, advertising