Operating Cost Analysis

McDonald's operating costs and expenses worldwide from 2015 to 2022, by type
(in million U.S. dollars)

During the 2022 financial year, McDonald's recorded 13.81 billion U.S. dollars in
operational expenditures and expenses. The primary components of the company's
fees and expenses are the expenses related to managing its own restaurants,
including costs for food and paper, salary and employee benefits, and charges for
occupancy and other operational activities.(Statista Research Department,2023)

McDonald's large scale hinders the organization's ability to control spending from the
head office effectively. The firm offers an array of astute individuals who will discern
this sooner than its competitors. McDonald's has taken action by creating cost-
control tools to help the corporation achieve its cost-control objectives at each branch
and in every country. Consequently, McDonald's garnered widespread attention
globally, as many media outlets reported that the corporation had surpassed the
earnings forecasts of the public, analysts, and other stakeholders. The rise in profits
resulted in the successful implementation of cost management measures at
McDonald's.Consequently, the company's profits were very substantial. Yield
increases with any decrease in spending, as profit is calculated by subtracting costs
from revenue. McDonald's experienced a successful year due to the diligent efforts of
the company's operations management and cost control staff.

McDonald's cost management specialists have effectively managed expenditures by

implementing drive-through windows and offering home delivery options. It
significantly reduces the expenses of McDonald's establishments globally. These
initiatives aim to decrease the costs associated with providing services to consumers
at McDonald's establishments. When McDonald's caters to a customer at one of its
establishments, several predetermined and fluctuating prices are involved. The
expense associated with building and maintaining a dining room in a restaurant
is constant. The restaurant will need to rent a larger facility to accommodate more
people, resulting in a rise in leasing fees. The facility incurs additional fixed expenses
for maintenance personnel, janitors, and an increased workforce dedicated to
assisting clients. Variable costs encompass the expenditures associated with
cleaning dishes, sauces, lighting, and other activities provided to visitors for their
entertainment.McDonald's achieves significant cost savings by constructing compact
drive-through establishments and operating a meal delivery system to customers'
residences. That contributed to McDonald's earnings in 2009 surpassing the
forecasts of experts.

McDonald's has also started utilizing technological innovations to save costs. It

entails the implementation of surveillance cameras and other devices to deter
employee and consumer theft. McDonald's has incurred substantial financial losses
due to employee theft. The pilfered products necessitated replacement by the staff,
resulting in heightened costs and placing the business in a precarious financial
situation. However, cost management personnel have utilized technological
advancements to address these challenges. McDonald's has achieved cost reduction
on a global scale by implementing additional strategies, including using recycled
paper and implementing an environmentally friendly initiative. McDonald's has
reduced its packaging and material costs by 50% using recycled paper. The
company's expenses are decreasing, leading to continuous growth in earnings.

Benchmarking Between McDonald’s and Burger King

(Yadav,P. (2023))

We are comparing McDonald's to Burger King. We will evaluate the history, menus,
brand tactics, and longstanding rivalry of McDonald's and Burger King. Analyze
McDonald's to Burger King's marketing, consumer preferences, and cultural effects.
McDonald’s history.

Let's start comparing McDonald's story and Burger King's.The fascinating tale of
McDonald's, a fast food company that changed the business. McDonald's developed
from a little drive-in restaurant in 1940 to a worldwide phenomenon. McDonald's
learned how it achieved success, from its Golden Arches and efficient fast food
manufacturing system to its focus on consistency and customer experience.
McDonald's discovered how it became a household brand and symbol of ease and
affordability.

In parallel, Burger King is a competitor burger restaurant that has shaped fast food.
Burger King, founded in 1954, perfects burgers flame-broiled. Burger King has
evolved from its Whopper to new items that meet customer tastes. Burger King's
discovered how customization and indulgence have set it apart.

We'll explore their delicious menus and distinctive dishes as we compare McDonald's
and Burger King. The Big Mac, crispy fries, and Happy Meals at McDonald's appeal
to a broad spectrum of tastes. The Whopper is Burger King's signature flame-grilled
burger with delicious sides and desserts. These menu decisions have molded both
brands' identities and devoted followings.

McDonald's and Burger King use various brand and marketing techniques to attract
customers. McDonald's promotes consistency, family-friendliness, and memorable
ads. Burger King, on the other hand, uses bigger, more controversial marketing
tactics. See how these techniques engage target audiences and shape brand image.
Customer preferences and cultural effects are essential when comparing McDonald's
versus Burger King. McDonald's is known for its cost, convenience, and family-
friendly atmosphere. Burger King, however, is known for indulgence, customization,
and personalization. These businesses have changed customer tastes and affected
popular culture with iconic slogans, personalities, and partnerships.

As we conclude the McDonald's and Burger King comparison, we are reminded of

their lasting effect on cuisine. Burger King offers customization, strong tastes, and
indulgence, whereas McDonald's offers convenience, consistency, and family
appeal. Improving McDonald's could involve several aspects, such as enhancing the
nutritional value of its menu items, increasing sustainability efforts, and improving the
overall customer experience. At the same time, Burger King should diversify or widen
the product mix to address current product-mix limitations. Increase service quality.
Improve products to address changing consumer preferences favoring a healthy
lifestyle to improve business.