Porter's Five Forces Analysis of McDonald's Corporation Summary. In this Five Forces analysis, McDonald's experiences the...

  
 

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Porter's Five Forces Analysis of McDonald's Corporation Summary. In this Five Forces analysis, McDonald's experiences the effects of external factors at varying intensities, based on the variations among markets around the world. For example, the U.S. market presents a competitive landscape different from that of the European market. The company must implement strategies to meet these external factors and minimize their negative impacts. Recommendations. The results of this Five Forces analysis show that McDonald's Corporation needs to prioritize the strategic issues related to competition, consumers, and substitutes, all of which exert a strong force on the company and its external environment. The other forces (the bargaining power of suppliers and the threat of new entrants) are also significant to the business, although to a lower extent. In'this regard, a recommendation is to strengthen the business by building on the strengths enumerated in the SWOT analysis of McDonald's Corporation. The company's managers must focus on reducing the effects of competitors and substitutes on revenues and market share. McDonald's marketing mix or 4Ps partly supports such effort. Also, it is recommended that McDonald's make its product innovation process more aggressive. While the food service industry is saturated with aggressive firms, new products can attract new customers and retain more customers. In relation, based on this Porter's Five Forces analysis, McDonald's can implement higher quality standards to address the forces of competition and substitution. 1. Competitive rivalry or competition - Strong Force 2. Bargaining power of buyers or customers - Strong Force 3. Bargaining power of suppliers – Weak Force 4. Threat of substitutes or substitution - Strong Force 5. Threat of new entrants or new entry - Moderate Force Instructions: Part I. Follow the McDonald's example and apply 5 porters' five analysis to the NBK company based on the above list with explanation. Level of force: Weak, Moderate Explain why: or Strong? 1. Competition Level: 2. Bargaining power of buyers Level: 3. Bargaining power of suppliers Level: 4. Threat of substitutes Level: copyright ©American College of the Middle East, 2021 5. Threat of new entrants Level: Part II. Calculate the Gross Profit Margin ratio and interpret results. Gross Profit Margin Ratio = Gross Profit/Revenue * 100% XYZ - Statement of Profit and Loss 2020 year Revenue Cost of goods sold Gross Profit 225,600 (50,000) 175,600 Operating and administrative expenses (12,000) Depreciation/Amortization Interest Income Finance costs Profit for the year (900) 15,000 (10,020) 167,680 Porter's Five Forces Analysis of McDonald's Corporation Summary. In this Five Forces analysis, McDonald's experiences the effects of external factors at varying intensities, based on the variations among markets around the world. For example, the U.S. market presents a competitive landscape different from that of the European market. The company must implement strategies to meet these external factors and minimize their negative impacts. Recommendations. The results of this Five Forces analysis show that McDonald's Corporation needs to prioritize the strategic issues related to competition, consumers, and substitutes, all of which exert a strong force on the company and its external environment. The other forces (the bargaining power of suppliers and the threat of new entrants) are also significant to the business, although to a lower extent. In'this regard, a recommendation is to strengthen the business by building on the strengths enumerated in the SWOT analysis of McDonald's Corporation. The company's managers must focus on reducing the effects of competitors and substitutes on revenues and market share. McDonald's marketing mix or 4Ps partly supports such effort. Also, it is recommended that McDonald's make its product innovation process more aggressive. While the food service industry is saturated with aggressive firms, new products can attract new customers and retain more customers. In relation, based on this Porter's Five Forces analysis, McDonald's can implement higher quality standards to address the forces of competition and substitution. 1. Competitive rivalry or competition - Strong Force 2. Bargaining power of buyers or customers - Strong Force 3. Bargaining power of suppliers – Weak Force 4. Threat of substitutes or substitution - Strong Force 5. Threat of new entrants or new entry - Moderate Force Instructions: Part I. Follow the McDonald's example and apply 5 porters' five analysis to the NBK company based on the above list with explanation. Level of force: Weak, Moderate Explain why: or Strong? 1. Competition Level: 2. Bargaining power of buyers Level: 3. Bargaining power of suppliers Level: 4. Threat of substitutes Level: copyright ©American College of the Middle East, 2021 5. Threat of new entrants Level: Part II. Calculate the Gross Profit Margin ratio and interpret results. Gross Profit Margin Ratio = Gross Profit/Revenue * 100% XYZ - Statement of Profit and Loss 2020 year Revenue Cost of goods sold Gross Profit 225,600 (50,000) 175,600 Operating and administrative expenses (12,000) Depreciation/Amortization Interest Income Finance costs Profit for the year (900) 15,000 (10,020) 167,680

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Answer McDonalds is a globally wellknown chain of fastfood restaurants that is comprised of both companyowned and franchised restaurants The company s... View the full answer