McDonald's is a fast food restaraunt distributing burgers, fries, chicken, breakfast, salads, wraps, etc. to billions of people across the world. While there are thousand of competing restaraunts available to the public, McDonald's goal is to serve people as quickly as possible. The restaraunt originally started in 1940 as a barbeque restaraunt. In 1948, it changed its policy, and the McDonald's fast food chain was founded (2012). McDonald's has grown over the years, making changes that are appealing to new and old customers. Some of these changes included introducing the kids happy meal in 1979 and introducing indoor seating in 1962. Roy Kroc joined the McDonald's team in 1955. Since then the late Roy Kroc purchased the chain and turned the company into a woldwide franchise (2012).
McDonald's aims their advertisements to parents and children. The McDonald's commercials try to influence parents to take their children to their restaraunt. The commercials imply that the restaraunt is a family friendly place that will make kids happy. It appeals to children with the commercials featuring the Playplace designed for children. In the past McDonald's strongly advertised Ronald McDonald and his friends including Grimace, the Hamburglar and Mayor McCheese to name a few. The demand for fast-food restaraunts such as McDonald's has increased since the typical household now possesses two parents in the workforce, as opposed to one. With the increase in technology, people's lives are becoming more hectic making a restaraunt such as McDonald's very convenient and an easy choice. The supply for McDonald's is increasing as demand increases. McDonald's employees 17,500 British and Irish farmers, which meet the needs required by the demand (2008, Jan 4). The primary stage of production would be the raising of the farm animals for meat. The secondary stage of production would include the creation of the patties, chicken burgers, chicken nuggets, etc. in order to sell them to the company. The tertiary stage includes the selling of these products to the consumers. The prices of McDonald's products are amont the cheapest in the fast food industry. Their goal is to provide "good food at affordable prices" according to chief executive Steven Easterbrook. The fixed costs for McDonald's would be the cost of the building, the cost of creating the kids playplace, and the utilities required for operation. The variable costs include the cost of the product required to make the meal such as buns, pickles, cheese, meat, etc., the cleaning supplies required for the upkeep and the wages for the employees. "McDonald's revenue grew 27% over 3 years ending in 2007 to 22.8 billion, and 9 percent growth in operating income to 3.9 billion" (2012, January 27). In September 2011, the gross profit margin was 44.8%, making a very large profit for a billion dollar company.
McDonald's strongest competitiors include fast-food restaraunts such as Dairy Queen, A & W, Burger King, Wendy's etc. The competitive advantage McDonald's has over their competitiors is the speed of customers receiving their order, the price of their product and the appeal to children threw kids meals and the play place. Implementing these three advantages has made the franchise a very successful, very popular company. A disadvantage McDonald's struggles with is PETA publicly petitioning against how the animals providing meat are treated (2012, January 27). This will be a constant stuggle for the company as animal rights activists will never support animals being killed for meat. McDonald's has became a very successful fast-food restaraunt largely due to exceptional advertising appealing to families across the world.
References:
McDonalds: Getting to know us. 2010-2012. http://www.aboutmcdonalds.com/
Riley, Jonathan. 2008, January 4. http://www.fwi.co/
McDonald's. 2012 Jan 27. http://en.wikipedia.org/
McDonalds Corp (NYSE:MCD). 2007. http://finapps.forbes.com/
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