Hello class,

The five forces analysis tool was developed by Harvard professor Michael Porter. The tool is commonly applied in the development of business strategy and is used as a method for understanding interfirm competition in various sectors$.$ Porter was dissatisfied with other strategic analysis tools such as SWOT and PEST analyses and so developed the field of strategic theory by introducing this tool. The tool explains how three external and two internal forces combine to shape the intensity of competition, and hence attractiveness of any given marketplace. It tends to be used in application, as a preliminary qualitative assessment of the firm$$s strategic positioning with a view to using more developed tools at later stages of analyses. $($Harper$,2022).$ Originally published in the Harvard Business Review $($HBR$)$ as $$How competitive forces shape strategy$,$ in $1979,$ it was Porter$$s first HBR publication and it revolutionized strategic analysis.

According to Porter, the nature of competitiveness in a given industry can be viewed as a composite of five forces: rivalry among competing firms, bargaining power of suppliers, bargaining power of consumers, potential entry of new competitors, potential development of substitute products, $($David$,$ et$.$ al$.,2024)$

For this discussion, we are to rank the forces as to relative importance for the hypothetical strategic planning at McDonald$$s and the fast$-$food industry. McDonald$$s is of course a world leading brand that despite its core level of consistency is continuously innovating and formulating strategies for its business model to maintain an edge in the highly competitive fast$-$food industry. In my opinion, I rank the five forces from $1$ to $5,$ where I believe that $1$ is the most important force and descending to $5$ which I see as the least important force to consider.

$1.$ Bargaining Power of Consumers

The bargaining power of consumers is how a customer can switch from one supplier to another depending on their different product range prices and preference. The power of consumers over McDonald$$s is comparatively high. A customer has many choices from different fast$-$food restaurants depending on their preference. Due to customers$$ change in preferences, McDonald$$s competes in terms of offering a quality menu and low price. As such, McDonald$$s should ensure in maintaining loyal customers by having proper marketing expenditures and considerations in the pricing strategies to be competitive, $($Raj & Singh, $2020).$

$2.$ Rivalry Among Competing Firms

The force of rivalry among competing firms is very high in the fast$-$food industry. McDonald$$s has been around since $1948$ and may have paved the way for new entrants to the industry but today there are several long$-$standing fast$-$food organizations that directly compete with McDonald$$s$.$ Burger King and Wendys are among the largest competitors. For McDonald$$s to maintain a competitive advantage it must continue to invest in strong marketing initiatives and maintain and drive price competition to stay competitive. The competitors have demonstrated that they too must do the same. For example, every January, when new years resolutions are fresh on people$$s mind, losing weight being among the top goals, the fast$-$food industry offers incredibly low prices to entice customers to try their products. Specialty meals, buy one get one, buy one get one for $$1,$ to name a few. Product placement is another strategy that is used to gain a competitive advantage. Whether it is Burger King in the Iron Man movie franchise, or $$The Fifth Element$$ for McDonald$$s$.$ The children$$s movie $$Mac and Me$$ was described as an advert for McDonald$$s disguised as a movie. The point is rivalry among competitive firms is very strong and product placement is one of the many tools that each uses to promote their own brand.

$3.$ Potential Development of Substitute Products

The force of potential development of substitute products is relatively high for McDonald$$s$.$ The sheer variety of options for consumers to choose from is staggering. Nothing beats a home cooked meal, and eating out offers so much more variety than before. With travel shows that highlight food, the idea of trying new food, especially street food, has gained enormous popularity. However, McDonald$$s maintains a key advantage insofar as among its main attractive qualities for consumers are its reliability, convenience, and value for money. It does maintain consistency in its core products, its staple sandwiches and fries are distinct and though replicated, they are enjoyed by a loyal following of customers. Innovations and new product offerings are consistently offered to adhere to consumer demand. For example, McDonald$$s introduced $$healthy$$ options in response to a growing desire among consumers for nutritious options that are also convenient and good value.

$4.$ Potential Entry of New Competitors

The threat of potential entry of new competitors to enter the fast$-$food industry and gaining a competiti