Swot Analysis Of Mcdonald's Vs. Burger King

The McDonald brothers' first restaurant, founded in 1937 in a parking lot just east of Pasadena, Calif., didn't serve hamburgers. It had no playground and no Happy Meals. The most popular item on the menu was the hot dog, and most people ate it sitting on an outdoor stool or in their cherished new autos while being served by teenage carhops.

That model was a smashing success--for about a decade. Then America's tastes began to change, and the Golden Arches changed with them. As cars lost some of their romance, indoor restaurants took over. When adults became bored with the menu in the 1960s, a new sandwich called the Big Mac wooed them back. As consumers grew weary of beef, McDonald's introduced bite-size chunks of chicken in the early '80s and within four years was the nation's second-largest poultry seller.

The changes were vital, but never radical. McDonald's gave us what we wanted before we even knew we wanted it, whether it was movie tie-ins or Egg McMuffins. Along the way, it built one of the world's best-known corporate icons and its most ubiquitous store. The philosophy was neatly summarized by Ray Kroc's brash vow: whatever people ate, McDonald's would be the ones to sell it.

But now, two years shy of Kroc's benchmark for the far-off future, that goal seems less assured than ever. Forget for a moment all the recent talk about Burger King Corp. and Wendy's International Inc. stealing customers from McDonald's. With a 42% share of the U.S. fast-food burger market, McDonald's still easily outpaces its rivals. Nonetheless, the problems under the famous Golden Arches are far more serious than a failed Arch Deluxe here or a french-fry war there. Quite simply, McDonald's has lost some of its relevance to American culture--a...

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...60s, which rewards managers who start young and stay for life. Headhunters, noting that virtually no alumni from the McDonald's Oak Brook (Ill.) headquarters can be found running other companies, say it isn't where they look for talent. ''They are no longer the beacon of great success they used to be,'' says a Chicago-area recruiter.

Wall Street seems to share that sentiment. Over the past two years, while the Standard & Poor's 500-stock index grew by 63%, McDonald's shareholders could have made more money in an insured savings account. Had you invested $100 in the company two years ago, you'd be holding $103 today. Of the world's 10 most powerful brands, as ranked by Interbrand, a New York consultant, only beleaguered Eastman Kodak Co. has had a worse run over that period (table, page 71). Shareholders of Gillette Co., meanwhile, have more than doubled their money.