Porter's Five Forces - McDonald's

Extract

[...] These are what are called “fast good", which have appeared especially in the upscale neighbourhoods of larger cities. The principle is the same, but the menus offered are all organic or vegan and are not harmful to health. However, the prices are much higher, and these restaurants are, therefore, reserved for a more affluent elite. F. Summary Table Porter's Forces Threat Intensity New Entrants Low Substitute products High Bargaining power of suppliers Moderate Bargaining power of clients High Intra-sector competition High III. [...]

[...] It is a question here of determining the threats, which weigh on the McDonald's group, and which can take various forms, such as the potential arrival of new entrants in the market or substitute products as well as the existing competition, which is very keen in all domains. This analysis also takes into account the bargaining power of customers as well as suppliers. Porter's strengths are useful to any business wishing to develop a new strategy or modify an existing one to better align with customer expectations. II. Porter's 5 forces of McDonald's A. New Entrants In the case of McDonald's, the threat from new entrants is relatively low. [...]

[...] The future risks, seeing the emergence of new trends, in terms of fast food, as is already the case today in the largest cities. The prices will be readjusted over the years, and this way of eating in a healthier way will become more and more widespread, leaving few possibilities for the players to increase the prices. When we talk about the negotiating power of customers, that is what we are talking about, knowing how to adapt and offer menus in response to consumers' expectations, in order to continue to retain them and remain among the favourite brands of the French, and customers in a large majority of countries. [...]

[...] McDonald's has every interest to be ever more productive and to develop systems to be faster than the competition, and otherwise more efficient, in terms of menu preparation as well as in terms of speed of packaging or deliveries. Some countries have developed robots in the kitchen that take care of all the frying part. Finally, the group's marketing strategy must always be more focused on the relationship with the customer and his experience within the restaurant, and at this time, his experience in the drive-through and home deliveries. The trends are clearly evolving, and it is on this evolution that the next communication campaigns should be based either in classic fashions or on social networks. [...]

[...] The Bargaining Power of Clients As in many industries, clients' bargaining power is high; this is also the case when they have a very wide choice. The greater the supply, the more demanding demand can be. In the specific case of the McDonald's group, the customer cannot influence the prices because they are set nationally as McDonald's is a restaurant chain. The bargaining power of customers extends to something other than prices and can go as far as the creation of new recipes, in particular, that are more in line with current expectations. [...]