Taking a Look at Macdonald's Restaurants

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Table of Contents
McDonald’s Corporation 2
Brief Description 2
Business Model 2
Calculations of ROE 3
Porter’s five forces 3
Competitive Rivalry 3
Threat of Substitutes 4
Threat of new entrants 4
Buyer’s power 4
Supplier’s Power 4
Sustainable Competitive Advantage 5
Long term Prediction 5
References 6

McDonald’s Corporation
Brief Description
McDonald’s Corporation headquartered in United States is the largest chain of fast food restaurants and with more than 34,000 local restaurants around the globe [1]. It has around 1.8 million employees and was founded in May 1940 in San Bernardino, California and in April 1955 in Des Plaines, Illinois [1]. Some of the top selling products of the firm are burgers, French fries and other fast food products which are commercialized by the firm. Don Thompson is the current acting president and Chief Executive Officer of the firm.
Business Model
The firm describes its business model as follows “Our business model is depicted by our three-legged stool of owner/operators, suppliers, and company employees, is our foundation, and balancing the interests of all three groups is key”[2]. The business model of this firm is very spread out and distributed as it earns revenue by different means. McDonald’s Corporation owns around 15% of restaurants directly the rest of all are joint ventures or in some collaboration. It generates revenue from investment in properties and by the franchiser and operator of restaurants.
McDonald’s in addition to franchise and marketing fees also collects rent under the franchise agreements which makes it business model different from the other fast food restaurants. Its business model is flexible as it differs territorially in countries and this makes it very power...

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...ng to my understanding McDonald’s Corporation will have a long term success because of them having resources and capabilities which gives them high Value. This could help them exploit opportunities and outperform its competitors. The firm may not have answer to the Rarity and Imitability but the business of fast food restaurants is such that its loyal customers may help it to stand for a long time.

References
1. McDonald’s The Leading Global Food Service Retailer: AboutMcDonalds.com. (n.d.). Retrieved from http://www.aboutmcdonalds.com/mcd/our_company.html
2. McDonald’s Mission and Corporate Values: AboutMcDonalds.com. (n.d.). Retrieved from http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html
3. Retrieved from https://en.wikipedia.org/wiki/McDonald's#Business_model
4. Retrieved from uiccreativesolutions.wikispaces.com/McDonald's+Five+Forces

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