Mcdonalds Five Forces

McDonalds Five Forces

McDonalds is one of the most known fast food restaraunts in the world. Boasting profits of 21 billion last year they far exceed the income of their rivalries. Because they boast such high profits allows the McDonalds to focus more on customer service and not so much on intense cutthroat strategies. One thing that has allowed McDonalds to continue to grow in the recent years has been recession planning, from downsizing the company fleet to smaller more economically sound vehicles, and bringing down the advertising costs the company has grown its profit. So as the character of rivalry force comes into play McDonalds does the leader not need to be as competitive as the others?

With Burger King bringing in an average annual income of $11 billion it is the closest threat to McDonalds. Other very well known companies such as Wendy’s only bringing in $3.4 billion the idea those new companies could come into the industry on a worldwide level as McDonalds. That being said smaller markets and local diners and hot spots have the opportunity of taking away income from districts but not from the companies as a whole. These smaller entrants could not advertise on the scale of the larger companies which limit the possibility of them competing.

The threat of substitutes in this situation is complex. Being an avid fast food eater myself I know that 90% of the time I want a quarter pounder, there is barely ever a suitable substitute. For the most part substitutes are far and few between when it comes to the taste of a hamburger. That being said there are many places you can find a cheap burger, but the taste for the price is what brings customers back. When the recession first hit the dollar menu was a major source of income for fast food restaraunts. McDonalds, Burger King and Wendy’s all threw their hats into the ring to what was to be called the Dollar Double Cheeseburger War. All stayed in the fight but today only McDonalds is still offering the...