COMPANY BACKGROUND
 The First McDonald’s was built in 1940.
 Ray Kroc was the First Franchisee appointed by the original
McDonald brothers, Dick and Mac.
 He opened his first restaurant in Des Plaines, Illinois.
 The company motto became “Quality, Service, Cleanliness and
Value” (QSCV)
CURRENT STATUS OF COMPANY
 McDonald's is the world's #1 fast-food company by sales
 Serving burgers and fries, it operates more than 34,000 flagship
restaurants
 It serves in more than 119 countries on six continents.
 On a day-to-day basis, more than 47 million customers world-wide
are served
 Employs more than 1.5 million people.
 More than 80% of McDonald’s restaurants worldwide are owned and
operated by independent local men and women.
PORTER’s FIVE FORCES ANALYSIS
 Formed by Michael E. Porter of Harvard

Business School in 1979.
Helps in analyzing the Industry and the
Business Strategies being taken by the
Company.
PORTER’s FIVE COMPETITIVE FORCES
Competition Within Industry:




KFC, Pizza Hut, Dominoes, Subway
Sandwiches Prepared Meals.
Fast Food Centers.
Online presence – Company Info, Home Delivery, Better Combo
Deals.
New Entrants:
 McDonald’s has market dominance (over 30,000 restaurants
world-wide)
 Economies of scale force new entrants to enter at a cost
disadvantage.
 High Competition
 Easy To Entry For New Comers.
PORTER’s FIVE COMPETITIVE FORCES
Threat Of Substitutes:




Fast Food Centers.
Healthier Alternatives.
Unique Products
Substitute for Coffee, Cold Drinks available at Cheaper Rates.
Bargaining Power Of Customers:
 Pay Attention to Customer Demands and Trends.
 Offer Specialty Products for Certain Segments.
 McDonalds Focus on Special Tastes and Preferences on Customer
Choice.
 Customer May Shift From Mc Donald’s To Another Brand as They
Have High Bargaining Power.
PORTER’s FIVE COMPETITIVE
FORCES
Bargaining Power of Suppliers:
 McDonald’s relies on strong Supplier and Distributor
relationships.
 Help Suppliers lower costs.
 Develop New Supplier Base to reflect Customer
Diversity.
 Suppliers include: Coca-Cola, Heinz.
CONCLUSION
 The goal is to become customers favourite
way and place to eat and drink by serving the
best.
 Due of its financial power McDonalds could
move into to other industries/products at any
time.
 Due to its high demand, company can
introduce new products or items i.e. Product
Development.
THANK YOU