The given study is about the Mc Donald Corporation which is one of the largest retail chain in fast food restaurants

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Background and History

Mc Donald Corporation is one of the largest retail chain in fast food restaurants and serves  more than 60 million customers in more than 100 countries. It is headquartered in the United States.   McDonalds, which belong to restaurant industry, is one of the leading global food service retailers that deal with fast foods. McDonald’s number 1 Store Museum was the first McDonald’s restaurant opened in Des Plaines, Illinois in April 15, 1955 by McDonald’s Corporation founder, Ray Kroc. Affiliate, a franchisee or the actual corporation itself operates the restaurant today(Baines, Brown, Benedettini &Ball, 2012).In addition, the restaurant has more than 36,000 local restaurants that serve more than 68 million people. The restaurant serves more than 100 countries with 80% of the restaurant been franchised.  The restaurant and its franchisees employ approximately 1.9 million (its website). The restaurant’s current president and Chief Executive Officer is Steve Easterbrook who took over after Don Thompson. The restaurant reflected a net income of $1.07 in last year, which was a decline of 30% from the previous year. According to Collett Miles (2013),Mc Donalds revenues have grown  by close to 28 per cent over the last 5 years to $ 34billion, and 10 per cent growth in the operating income to $ $3.5billion. McDonalds deals with the selling of chicken, French fries, soft drinks and desserts among others. The company has also developed new menu due to the changes in the consumer tastes and preferences.

Porter Five Forces

With fast food outlets showing up at every corner, the restaurant has analyzed the Porter’s five forces model in order to survive and grow in its high competitive industry.  

1. Bargaining power of buyers.  Considering the growing economy, people have adequate income to purchase the food products offered at McDonalds. The restaurant offers good product and services at cheaper prices, menu with numerous tastes that customers expect as well as improving their experience in fast food industry.

2. The bargaining power of suppliers. McDonalds has managed a high bargaining power of its suppliers. The restaurant and most of its outlets are strategically placed in order to be accessible than other restaurants. Its main suppliers are the soft drink industries. The restaurant usually looks for soft drink companies that have a high match its needs and have a high brand value.

3. The threat of substitute products and services. In order to conquer the threat of substitute products, McDonalds have introduced of Mc Delivery that gives a customer good service, faster and ensures they easily buy any of its many products at the nearest retailer.

4. Intensity of rivalry among competitors. McDonald has managed to stand out among its rivals due to larger size(Collett Miles, 2013). Although most of McDonald competitors have been active in improving their business performance by launching many outlets, introducing and improving their products through innovation, the restaurant has been in forefront in its innovation as well as diversifying its product in order to stay ahead of the competition.


1. Ensuring Coherence in Strategic Direction

McDonalds has maintained strategic focus and direction in order to sustain the company’s competitive edge in the market.The strategy the restaurant is using to sustain competitive advantages is expanded menu, having more than 36,000 outlets, lowest total costs, celebrity endorsements, and sponsorship in music and Olympics (Sharma, A. K. (2013).The company has social responsibly has its key factor. For example, it participates in World Children’s Day that benefits local Children events.

2. Value Chain Analysis

The value chain analysis seeks to determine the ability of business in delivering maximum value to the end customers.The value chain analysis of McDonalds includesthe inbound logistics, operations, outbound logistics, marketing, sales, and services. 

1. Inbound logistics. McDonalds has been able to purchase raw materials from its pre existing suppliers and thus, increasing capital and labor that enhance production.  The company has engaged in backward vertical integration to replace its suppliers. This helps in reducing costs and promoting the quality of products supplied in the company.

2. Operations. The managers of McDonald’s stores changed the design of its restaurant kitchen in order to accommodate different equipments and layouts for preparing a wide variety of foods in the markets. 

3. Outbound logistics. Mc Donalds has been committed towards providing quality foods and superior service in the markets.  Within the restaurant level, McDonalds is focused on energy conservation, sustainable packaging and management of waste. 

4. Marketing and Sales.  McDonalds still maintains an extensive advertising campaign that includes common media, sponsoring events and other local events. In spite of all, television has taken the central role in its advertising strategy.

5. Services.  McDonalds also provides additional services to the customers including Free Wifi to check emails and connecting with friends.  It also has a gift card that give customers a more convenient way of paying for their products. 

6. The supporting services include thetechnology development, human resource management, procurement, and the firm’s infrastructure.

In order the company to maintain and improve its competitive position, the company needs to utilize ICT to create a wider interactive marketing where it can attract and maintain customers. In addition, it needs to differentiate further its product in order to stay ahead of the competition.

Course of Action

If I would be able to advise the company, I would recommend continuous improvement strategies and increased marketing campaigns. Such strategies would be crucial in sustaining competitive advantage and gain future growth(Sharma, 2013). The successful implementation of the strategies includes the following steps identifications of problems, identify alternatives, collect data on the various options, select the suitable strategy, implement and continually review the strategy.


Personally, I think the case study of McDonald is useful in understanding the various factors that influences competitiveness as well as the strategic direction and growth of the company’s retail chain stores in the United States.  I have learned that it is important to develop clear strategic direction in order to improve the company’s commitment to the strategies.

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