1.

The threat of entry of new competitor: MODERATE to HIGH

- McDonalds made an entry barriers by providing good quality products and
services recognized worldwide
- Trends turned toward McDonalds compare to KFC, Burger King because
cheaper price, but also thanks to the adapted products for each country
- The Corporate symbol created by McDonalds makes it difficult for competing
firms to penetrate the fast food market
- Easy to access market with low startup costs
2. The bargaining power of supplier: LOW
- Different suppliers have different bargain powers in the fast food industry.
Beverage industry: Pepsi or Coca Cola.
- Worlds largest fast food chain
- High bargaining power OVER suppliers, since some are efficiently operating thanks
to McDonalds
3. The bargaining power of customers (buyers): LOW
- Products similarity with other fast food companies
- Industry limitations
- High brand image through uniqueness and differentiation: less chances of switching
4. The threat of substitute products or services: MODERATE
- The customers are used to have the option of choosing the best value products,
since the market as a whole consists of many differentiated fast food companies
- Values of substitutes matches fast food products and buying preferences.
- Introduction and good performances of local fast food firms
- Healthiness issue makes customers look for healthier substitutes
5. The rivalry among existing firms in the industry: HIGH
- McDonald however is the largest company in the fast food industry
- McDonald traditional competitors include many fast food outlets across the globe.
Burger King, Wendys and Yum Brands are the greatest competitors.
- In general, McDonald and its main competitors are active in making fresh moves to
improve their market standing and business performance by introducing their
product innovation and launching many outlets franchise.
- Price dumping is normally a good way to attract new customers, or stealing
customers from competing companies, and since it have been a growing consumer
trend to go after these value meals, then it is a product category that have been
adapted from most of the global fast food companies.
- The high level of competition forces the individual competitors to copy of each
other
- The main competition goes through branding and advertising