Economic Analysis of McDonalds

Abstract

The paper covers the economic analysis of one of the leading company in fast food industry named as McDonald. The studies show that the company has large market share and competitive advantage in the industry. Different international factors are affecting the performance of the company. McDonald remains stable during the global economic crises with smart business strategies although the company faced declining trend during recessions of US economy in 2008. The company has some threats but simultaneously the doors of opportunities are also open. Financial highlights of the company reflect that that the company possesses strong position in the market.

Abstractii

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Economic Analysis of McDonalds4

Introduction4

Discussion4

Competitive Structure and Resources4

Market structure of the Company4

Market Shares of the Major Players in the Fast Food Industry6

Macro and International Influences on McDonald6

Changes in Market Structure and Industry Forecast7

Evidence of Higher Cost of Production8

Threats8

Potential for Growth of the Company9

Company Performance10

Conclusion12

References13

Economic Analysis of McDonalds

Introduction

McDonald is one of the leading fast food franchises in the United States ad as well in different countries of the world. The main products are cheeseburgers, hamburgers McNuggets and French-fries (www.mcdonalds.com). This company has 32,000 restaurants in 117 countries in which 75% are owned by independent ownership. McDonald global success strongly depends upon the use of franchising. Franchising is the way to deliver the local products to the people of different culture. The study covers the main economic issues related to the company like market structure, company performance, company stability and future opportunities and threats for the company. The study also gives light to financials of the company. Being a leading fast food restaurant in the world the performance of the company is significant, and from the past few years the company is also driving large amount of revenue from (APMEA) Asia/Pacific/Middle East and Africa

Discussion

Competitive Structure and Resources

Market structure of the Company

Being a World's fast food company McDonalds operates according to geographic structure. McDonalds operates in five geographical divisions which includes United States, Europe, Asia/Pacific, Canada and Latin America. The most important strategic approach of McDonald to compete at international level is that it does not only satisfy the needs of local consumers in various geographic areas but also continues “maximum local development”.

Actually the company produces different products in different areas and even it offers different prices of products. Fast food industry has become one of the thriving industries in the world. The global fast food industry is active with multiple competitors. The industry is operating in a monopolistic market structure where many buyers sell products with product differentiation. The main key players in this industry are McDonalds, Burger King, Wendy's International and YUM! Brands Inc. McDonalds is facing different market structure at international level like in United States and Europe it operates in monopolistic competition, but in developing countries, McDonalds operates in oligopolistic competition like only few sellers are present in the market. With the huge demand of healthier food items competitors among fast food industry have to adopt changes in their menus in order to remain healthy competitor in the ...