McDonald’s Corporation attempts to reach out to several different target markets for each of its products. Through countless hours of research and market segmentation, the company is able to form an analysis as to whom, their particular products should target. Additionally, the company uses product positioning to focus on meeting the needs that matter the most to customers, and attributes that are crucial to sustainability in the fast-food industry. In this paper, I will discuss how the product positing chart I have created aligns with McDonald’s corporate strategy, in addition to identifying weaknesses in the company’s positioning. Secondly, I will be describing the relevance of the EPS/EBIT analysis chart I have included, and why it is significant
…show more content…
Based off the calculations that I have done for the EPS/EBIT analysis and because McDonald’s is such a large corporation, the best alternative for the company if a recession, normal, or boom year is expected is a 50-50 or combined financing. Common stock financing should be used in the moderation or high earnings situations because of the risk that are involved; but both options are worthwhile in the low earnings situation, because between the two, the company will be able to meet their expectations. The most profitable for the company would be the common stock due to the EAT, but the best alternative would be the debt because of high EPS. “When additional stock is issued to finance strategy implementation, ownership and control of the enterprise are weak; this can be a serious concern in today’s business environment of hostile takeovers, mergers, and acquisitions” (David, 2011, p.263). In order to have enough flexibility for unexpected changes in the market or economy, it is best for McDonalds to pull from both areas to compensate for future needs (David, 2011). Additionally, the EPS/EBIT analysis chart is important with respect to strategy implantation because anytime the company wants to implement a new strategy; they need to be able to determine if they will have enough capital (David, 2011). This can be done by examining the chart to determine which type of financing will best fit the
Based off the calculations that I have done for the EPS/EBIT analysis and because McDonald’s is such a large corporation, the best alternative for the company if a recession, normal, or boom year is expected is a 50-50 or combined financing. Common stock financing should be used in the moderation or high earnings situations because of the risk that are involved; but both options are worthwhile in the low earnings situation, because between the two, the company will be able to meet their expectations. The most profitable for the company would be the common stock due to the EAT, but the best alternative would be the debt because of high EPS. “When additional stock is issued to finance strategy implementation, ownership and control of the enterprise are weak; this can be a serious concern in today’s business environment of hostile takeovers, mergers, and acquisitions” (David, 2011, p.263). In order to have enough flexibility for unexpected changes in the market or economy, it is best for McDonalds to pull from both areas to compensate for future needs (David, 2011). Additionally, the EPS/EBIT analysis chart is important with respect to strategy implantation because anytime the company wants to implement a new strategy; they need to be able to determine if they will have enough capital (David, 2011). This can be done by examining the chart to determine which type of financing will best fit the