For the McDonalds restuarants and corporation for the future (information resear

ID: 433704 • Letter: F

Question

For the McDonalds restuarants and corporation for the future (information research paper)

A. Driving forces of change

B. Relevant economic trends & forecasts

C. Market trends & forecasts ("Markets" are sources of demand for an industry's products &/or services.)

D. Industry analysis

1. Major competitors

2. Is the industry concentrated or fragmented?

- Herfindahl-Hirschman Index (industry concentration)

3. BCG matrix & explanation

4. Ansoff’s matrix & explanation

5. Five forces analysis

6. Critical success factors

E. Summary of findings

Explanation / Answer

The Mcdonalds restaurant and corporation revenue is showing a downward trend in the recent years. The decline in revenue is the key force driving change. This is highlighting the need for innovation in the menu, customer service and making changes in the business model accordingly.

A. Driving Forces of Change:

McDonald's faces the key issues of competition, consumers, and substitutes. They need to continuously innovate and give new customer experience by constantly changing and customizing the menu. They also face strong competition from the offers and promotions conducted by their competitors. New product offerings will attract new customers and retain the existing customers. They need to implement high-quality standards to address competition and substitution in the already saturated. The threat of new entrants is always a cause of worry. Consumers easily move to a new fast-food company. The cost of capital investment is also low. The key strength is to that the brand image is very strong and needs to be maintained.

McDonald's is planning to start selling from kiosks where they are installing a self-serving kiosk in every McDonald store in the US. The customer can place an order on the kiosk and then collect the food from the counter or wait for an employee to serve him on the table. The consumer can place an order from the menu displayed on the kiosk and get the food. The restaurants also have free Wi-Fi making the environment more enjoyable. The consumers like the newly renovated look and this method of ordering are enjoyed by the Millennial and Gen X who are comfortable with computer interface.

Economic trends and forecast:

The change in the economic trends and forecasts are dipping. To discuss the downward trend in revenue which showed a downward slope from 28.1 billion in 2013 to 22.8 billion in 2017. The number of outlets in the same period increased from 34500 t0 37200. The share of directly run outlets decreased from 19.1% in 2012 to 8.4% in 2017. The number of official employees also fell from 440,000 outlets in 2012 to 235,000 in 2017 without any change in the business operations. They are indicating an optimistic trend in 2018 where the sales per outlet will increase by 4.1% instead of the current trend of 3%.

C. Market trends & forecasts:

The key trends in the fast food segment are as follows:

1. The industry will reach $ 850 billion by 2024.

2. The expected growth rate is 5.5% per annum.

3. It is a good alternative to homemade food and is easily accessible and served.

4. They are growing rapidly as most working people want ready to eat options and with fast-paced life and high net disposable income support the fast food consumption.

5. The key items which will show an upward trend include pizza, sandwiches, burgers, pasta, and seafood.

6. The main consumption is from USA, UK, Europe, and Mexico

7. The emerging markets include the developing nations like Africa, India, South America etc

The main competitors are as follows:

Brand

Stores

No of countries present

Revenue in 2017

IN $

Star Bucks

27399

22.4 billion

Yum Brands Inc

44000

135

5.8 billion

Chipotle

2250

4.5 billion

Subway

46000

110

11.3 billion

Panera

1900

7.5 billion

Burger King

14000

100

1.2 billion

Wendys

6537

1.27 billion

*”As per guidelines can answer up to 4 parts of a question.”