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Operators compete on the basis of price, location, food quality and consistency, style and presentation, and food range. New products are constantly being introduced because variety greatly affects consumer demand. Service is also expected to increase in quality. Restaurants are constantly implementing strategies such as drive-thru. The competition between franchises and locally operated fast food restaurants adds to the competition. Even though the single-location fast foods account for a small share of restaurants their share of industry revenue is larger. They have successfully established their restaurants in high traffic locations and at the same time in marketing their brands. Threat of New Entrants – Low The fast food industry is made up of large chains that already count with economies of scale, distribution channels, and technological advances. On the other hand, low start-up costs make it easy to compete in the industry. Although there are many competitors entering the market, on the global scale the giants like McDonald’s are still in advantage.
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Vulnerable to currency exchange because McDonald’s franchises and restaurants are located all around the world. At the same time supplies are bought from all around the world so the company faces increased currency risks. Trading at its 52 week high right now. MCD is not an attractive stock to purchase at the moment, but because of the dividend yield and sustainable growth it is one to keep. Overweight in the portfolio with regards to equity stocks. Highly competitive industry affects revenues and growth potentials. Companies competing in such a highly competitive industry are faced with increasing …show more content…
Janney said some complained about excessive coupons and discounts. Meanwhile, McDonald's emphasis on the Dollar Menu, which began last year, has had a ripple effect in the industry. Burger King recently said it's retooling its strategy and is now touting a deal for a $1.29 Junior Whopper, among others. Wendy's also revamped its value menu last year, saying it wants to offer customers more options. The focus value menus and deals, which have long a staple in the traditional fast-food industry, is in contrast to attempts by the same chains to evolve and adapt to changing tastes. As more people flock to places such as Chipotle and Panera McDonald's has also tried to freshen up its offerings and raise the image of its food. In addition to the chicken McWraps, for example, the company is rolling out a version of its Egg McMuffin made with egg whites next week. Such items are generally more expensive, and CEO Don Thompson noted that they could help improve margins in coming quarters. For the three months ended March 31, the global sales drop included a 1.2 percent decline in the U.S. The sales figure fell 1.1 percent in Europe, the company's biggest region by sales. It fell 3.3 percent in the region encompassing Asia, the Middle East and Africa, reflecting weakness in Japan and a 4.6 percent drop in China. The company blamed the decline partly on the aftereffects of the recent scare of the chicken supply for KFC, which is owned by Y
Vulnerable to currency exchange because McDonald’s franchises and restaurants are located all around the world. At the same time supplies are bought from all around the world so the company faces increased currency risks. Trading at its 52 week high right now. MCD is not an attractive stock to purchase at the moment, but because of the dividend yield and sustainable growth it is one to keep. Overweight in the portfolio with regards to equity stocks. Highly competitive industry affects revenues and growth potentials. Companies competing in such a highly competitive industry are faced with increasing …show more content…
Janney said some complained about excessive coupons and discounts. Meanwhile, McDonald's emphasis on the Dollar Menu, which began last year, has had a ripple effect in the industry. Burger King recently said it's retooling its strategy and is now touting a deal for a $1.29 Junior Whopper, among others. Wendy's also revamped its value menu last year, saying it wants to offer customers more options. The focus value menus and deals, which have long a staple in the traditional fast-food industry, is in contrast to attempts by the same chains to evolve and adapt to changing tastes. As more people flock to places such as Chipotle and Panera McDonald's has also tried to freshen up its offerings and raise the image of its food. In addition to the chicken McWraps, for example, the company is rolling out a version of its Egg McMuffin made with egg whites next week. Such items are generally more expensive, and CEO Don Thompson noted that they could help improve margins in coming quarters. For the three months ended March 31, the global sales drop included a 1.2 percent decline in the U.S. The sales figure fell 1.1 percent in Europe, the company's biggest region by sales. It fell 3.3 percent in the region encompassing Asia, the Middle East and Africa, reflecting weakness in Japan and a 4.6 percent drop in China. The company blamed the decline partly on the aftereffects of the recent scare of the chicken supply for KFC, which is owned by Y