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Business Analysis McDonalds & Burger King

Mounia Belkoura, Hau Ping Cheng, Lan Ki Cheng

Table of Contents
PART I: DESCRIBE TWO PUBLICLY TRADED BUSINESS RIVALS2
PART II: OPPORTUNITY3
1. DESCRIBE THE INDUSTRY3
2. GEOGRAPHIC AREA5
PART III: INDUSTRY ANALYSIS6
1. FIVE FORCES ANALYSIS6
2. LOW POWER COUNT7
3. KEY SUCCESS FACTORS8
4. ECONOMIES OF SCALE & HIGH POWER THREAT10
PART IV: STRENGTH ASSESSMENT11
1. RAW DATA ON KEY SUCCESS FACTORS11
2. CONVERTED SCORE OF KEY SUCCESS FACTORS14
3. AVERAGE CONVERTED SCORE ON KEY SUCCESS FACTORS14
4. SUSTAIN COMPETITIVE ADVANTAGES15
REFERENCES16

PART I: DESCRIBE TWO PUBLICLY TRADED BUSINESS RIVALS
1.
This research paper is a business analysis on the two publicly traded corporations, McDonalds and Burger King. Both of them are competing in fast food industry. Fast food industry is one of the largest food services sectors around the world. This industry focuses on the lower prices strategy in order to attract customers worldwide. Therefore, S&P Industry surveys suggests that “Our view is that restaurants will be largely unable or unwilling to raise prices much, if at all, for fear of losing customers to the competition” (Restaurant Industry Survey, Standard and Poor’s). On the other hand, the fast food industry is facing great criticisms from different health organizations and most people blame the fast food for causing health problems such as obesity and diabetes to the teenagers and adults nowadays. Recently, the San Francisco Board of Supervisors “passed a ban on restaurant toy giveaways unless the aforementioned meals meet certain healthy nutritional standards for calories, sodium and fat” (Mckinley, The New York Times). The authority urged the fast food industry to balance the nutrition needs for kids. With the economic downturn, fast food industry is still making money because “During a recession, the spike in unemployment generally leads to declines in consumption levels. When personal consumption expenditure is high, consumers will be more likely to spend money on eating out at fast food restaurants. This driver is expected to increase over the next year, providing a potential opportunity for the industry” (Fast Food restaurant in the US, Industry Performance, IBISWorld). McDonalds, the largest fast food restaurant in the US is located in 2111 McDonald's Dr., Oak Brook, IL 6052. It could generate 22,745 million total revenues during the recession period according to the annual 10-K report. Burger King, the second largest fast food restaurant located in 5505 Blue Lagoon Drive, Miami, Florida 33126 still earned 2,537.4 million total revenues during the past fiscal year according to its 10-K report. In general McDonalds and Burger King compete with all types of food retailers on the basis of prices, convenience, food qualities and customer services. PART II: OPPORTUNITY

1. DESCRIBE THE INDUSTRY
McDonalds and Burger King are competing in the dynamic food retail industry. Customers have various choices of food. They have the powers to determine the whole industry’s directions and developments. McDonalds and Burger King are working to maximize the market shares and increase the revenue across countries. Moreover, fast food industry is still the leading food retail sector in the United States and this attracts lots of local and regional companies to join the industry. The capital and technical requirements of setting up a fast food restaurant is not that huge in compared with other industries. Therefore, McDonalds and Burger King are not only competing with the large food retail companies, they also need to compete against the small business within the United States. On the other hand, increasing among of people show their concerns on the health issues related to the fast food restaurant and some people even criticize the excessive calories provide by this kind of restaurants. According to the performance research,...
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