Mcdanald's Case Study

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The Marketing Environment: McDonalds Corporation

Debra Smith

BU100

Kaplan University

August 1, 2006

The Marketing Environment: McDonalds Corporation

McDonalds is one of the great American corporations. But as with all corporations dependent on public goodwill and consumer trust, they must deal with various events and forces in the environment. This paper deals with the major forces in the environment as they affect McDonalds.

Competitive Forces

McDonalds is the world’s number one fast-food company by sales, with more than 31,800 flagship restaurants serving burgers and fries in more than 100 countries. Almost 30% of its locations are company-owned; the others are run by franchisees. Sales in 2005 were $20,460.2 million and 447,000 people were employed world wide. [i]

McDonalds’ major competitors are Burger King, the number two hamburger chain, and Wendy’s, number three. McDonalds also competes with Yum Brands, Inc., “which actually is the largest fast-food operator in the world in terms of number of locations, with more than 34,000 outlets in more than 100 countries. Yum Brands restaurants include the number 1 chicken fryer, KFC (with more than 13,500 units), top pizza joint Pizza Hut (about 12,500), and quick-service Mexican leader Taco Bell (more than 6,000). Yum Brands also operates the Long John Silver’s seafood chain, along with several hundred A&W root beer and burger stands”[ii]

Economic Forces

McDonalds is an elastic good and has many substitutes, from the competitors mentioned above to food cooked at home. Given that it is less expensive to cook at home, people whose incomes are squeezed may decide to avoid fast food all together.[iii] On the other hand, the continuing need for two worker families makes it difficult to...