Management Strategies on Mcdonald's Corporation

Assignment

Report of case study on Management Strategies
of
McDonald's Corporation

Jun 2006

Table of Content
INTRODUCTION 1
ORGANIZATIONAL BACKGROUND 1
LOW THREAT OF ENTRY 2
Economies of scale, Learning Curve and Experience Curve 2
Brand differentiation 3
Cost and technology advantage 3
Access to distribution channels 4
HIGH THREATS FROM SUBSTITUTES 4
Price and quality 4
Better performance/service 5
Different industry(Similar product) 5
HIGH THREATS FROM THE BARGAINING POWER OF BUYERS/CUSTOMERS 6
Forcing down prices 6
Customers’ wants and needs 7
Healthy life style 7
Fast-and-Convenient Service 7
LOW THREATS FROM THE BARGAINING POWER OF SUPPLIERS 8
Forward integration 8
LOW RIVALRY AND COMPETITION AMONG COMPETITORS 8
Competitors 8
Industry growth 9
Product/Service 9
HIGH THREATS FROM STAKEHOLDERS 9
Local Communities 10
Social Welfare 10
Interest Groups and Suppliers: Environmental protection 10
RECOMMENDATION 11
CONCLUSION 12
REFERENCES 13
APPENDIX 14

Introduction
This report is to study McDonald's Corporation using Michael Porter's Analysis on strategies used to deal with the competitive environment.

Organizational Background
McDonald’s restaurant established in Illinois in 1955, more than 30,000 restaurants in 119 countries worldwide, serving 47 million customers per day. In December 2005 reached a record high of more than US$20 billion revenue and 398,000 employees. McDonald's is the largest quick service restaurant organization in the world1.

This report uses the Five Forces Model from Michael Porter to analyze McDonald’s Corporation Ltd.

Source: Michael Porter Five Forces Model, www.brs-inc.com/porter.asp

This model studies the relationship between competitors within the same industry, such as potential competitors, suppliers, and buyers.   Give alternative solutions to enable the management to develop an appropriate strategy.

Five forces analysis looks at five key areas namely “The threat of... [continues]

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