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McDonald's Financial analysis

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McDonald's Financial analysis
Business Strategy Analysis: McDonald’s Corporation is the world’s largest fast-food chain in the restaurant industry, serving on average 69 million customers a day. Their stores are corporate or franchised owned, with franchising being highly beneficial to their success by producing 32% of their total revenue1. McDonald’s is in a highly competitive industry with market saturation because of low barriers to enter. The industry competes on price, quality, and service. McDonald’s faces competition with full-service restaurants and fast-food restaurants in the area. Their main competitors are Burger King, YUM! Brands, and Wendy’s International. The industry has faced scrutiny on the quality of their products because of a more health concise society. McDonald’s strategy for success is based off of cost efficiency, product development, and marketing and promotions. These factors help form the strong brand that McDonald’s is today. Since their establishment with Ray Kroc, they have focused on driving their success from the 3-legged stool principal representing: McDonald’s employees, the owner/operators, and their suppliers2. The stool needs all three to have a good balance in order to function, without either one of the legs success cannot be achieved. All three of them work together to create new products, to reduce costs, and to achieve outstanding customer service. There is commitment in helping all three legs of the stool to succeed. The suppliers play a key role by providing high quality products and forming trusted relationships with them. The franchiser represents McDonald’s by being in control of own operations. They are highly beneficial because they allow McDonald’s to grow at a much faster rater and in new markets to create a global brand. Also, economies of scale can be obtained by offering their products at a lower cost since it is a large scale. McDonald’s has implemented Plan to Win, which features five elements: People, Products, Place, Price, and


Bibliography: Burger King (2012). SEC Form 10-K for the Year Ended December 31, 2012. "Gilead Sciences Inc." Stock Analysis on Net. N.p., n.d. Web. 2 Dec. 2013. . Healy, Paul M. and Krishna G. Palepu. “Business Analysis & Valuation”. Chapter 5 and Chapter 6. 2013 Lundhol, Russell and Richard Sloan "Making Over McDonald 's | Fast Company | Business Innovation." Fast Company. N.p., n.d. Web. 01 Dec. 2013. . "McDonald 's CEO Thompson on Growth Strategy: Video." Bloomberg.com. Bloomberg, n.d. Web. 02 Dec. 2013. . McDonald’s Co. (2012). SEC Form 10-K for the Year Ended December 31, 2012. McDonalds Corp Stock Report. S&P 500 CapIQ Net Advantage. Nov 30, 2013. "MCD Cash Flow | McDonald 's Corporation Common S Stock - Yahoo! Finance." MCD Cash Flow | McDonald 's Corporation Common S Stock - Yahoo! Finance. N.p., n.d. Web. 02 Dec. 2013. . "McDonald 's McCafe Line Exceeding Expectations | QSRweb.com." McDonald 's McCafe Line Exceeding Expectations | QSRweb.com. N.p., n.d. Web. 02 Dec. 2013. . "McDonald 's Mission and Corporate Values :: AboutMcDonalds.com." McDonald 's Mission and Corporate Values :: AboutMcDonalds.com. N.p., n.d. Web. 24 Nov. 2013. . "MCD:New York Stock Quote." Bloomberg.com. Bloomberg, n.d. Web. 02 Dec. 2013. . Mourdoukoutas, Panos. "Starbucks And McDonald 's Winning Strategy." Forbes. Forbes Magazine, 25 Apr. 2013. Web. 28 Nov. 2013. . Ritchel, Matt. "The Long-Distance Journey of a Fast-Food Order." New York Times. N.p., n.d. Web. 02 Dec. 2011. . "This Is How McDonald 's Plans To Take Over The World." Business Insider. N.p., n.d. Web. 01 Dec. 2013. . Wendy’s International (2012). SEC Form 10-K for the Year Ended December 31, 2012. Yum! Brands (2012). SEC Form 10-K for the Year Ended December 31, 2012.
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