Mcdonald Porter's Five Forces Analysis

1194 Words 5 Pages
Register to read the introduction… Some of the newer entrants include chains of Sushi restaurants like Sushi Itto and organic fast food restaurants like O!Burger. To stay competitive McDonalds need to constantly analyse what these new entrants are providing to the public in terms of product and …show more content…
They believe that the “stool is only as good as any one of its legs” (McDonalds Canada, 2006). McDonalds maintains a close relationship with its suppliers (being one leg of the stool) so as to ensure that the overall product does not fall below the standard set. McDonalds prefers to source its products and supplies locally and, in Canada, they use over 120 local suppliers. This helps to provide a stable supply of consistent products, reduce costs and provide local employment. Their Canadian purchases represent more than 90% of total purchases in any given year (McDonalds Canada, 2006). While McDonalds suppliers are generally large and successful businesses in their own right they each have a solid understanding which enables McDonalds to consistently buy at the most economical prices, thus reducing the bargaining power of their …show more content…
In regards to McDonalds Canada these forces are continually changing, yet some are easier to control than others. It appears that McDonalds has an affective supplier arrangement which helps to reduce any bargaining power that the suppliers may have over the company. They are able to rely on predictable and competitive prices and product. Substitute products are abundant, McDonalds reduces the threat of these products by producing a consistent and cost effective product in over 24,500 restaurants around the world. In addition to these consistent products they also offer culturally specific menu items which helps to retain customers. McDonalds has a very large, constantly changing, customer base, which in turn means McDonalds must change with them. They are able to have consistently high sales by providing what the customer wants. For example, an explosion of salad alternatives has emerged in the past five years to cater to health concerns expressed by the

Related Documents