Macdonald's strategic report

Macdonald's strategic report

  • Submitted By: weewee123
  • Date Submitted: 05/01/2016 4:42 AM
  • Category: Business
  • Words: 4951
  • Page: 20
















McDonald’s is one of the largest fast food chain in the world. There are approximately 35,000 McDonald’s stores across 119 countries, and they jointly serve around 68 million customers a year (McDonald’s, 2014). Each McDonald’s is either run by a franchisee, or by the McDonald’s Corporation itself – only 15% are owned and operated by McDonald’s themselves. With franchising we see McDonald’s granting franchisees the right to use their brand, reputation and business mode in exchange for a fee of the profits. With this business model, franchisees have a motivation to maintain quality in both service and food due to their own invested capital into each store. Additionally, the franchisee has less of a financial burden and can enjoy economies of scale of worldwide advertising, distribution, and management (Hill and Jones, 2008) for the store being franchised. There is a relatively stringent application process involved in becoming a McDonald’s franchisee – including a high level of integrity, business experience within the food industry, the time and ability to complete a minimum of nine months franchisee training, a full time commitment to the opportunity, and a high level of investor capital (McDonald’s, 2014). This ensures the strong commitment of their franchisees and has perhaps contributed to the strength of the McDonald’s brand in the fast food industry (Moskowitz, 2014).
PESTLE Analysis Political/legal - The fast food industry is often a target for government initiatives aimed at improving health and reducing obesity, particularly in European countries. In 2003, after a report by the Scientific Advisory Committee on Nutrition (SACN) on the link between general levels of salt intake among the UK population and heart disease, the UK government introduced initiatives to reduce the amount of salt in many foodstuffs, including many products within the fast food industry. In response, McDonald’s reduced the overall salt content of...

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