Swot Analysis Of Mcdonald's Vs. Burger King Essay

1358 Words 6 Pages
The McDonald brothers' first restaurant, founded in 1937 in a parking lot just east of Pasadena, Calif., didn't serve hamburgers. It had no playground and no Happy Meals. The most popular item on the menu was the hot dog, and most people ate it sitting on an outdoor stool or in their cherished new autos while being served by teenage carhops.
That model was a smashing success--for about a decade. Then America's tastes began to change, and the Golden Arches changed with them. As cars lost some of their romance, indoor restaurants took over. When adults became bored with the menu in the 1960s, a new sandwich called the Big Mac wooed them back. As consumers grew weary of beef, McDonald's introduced bite-size chunks of chicken in the early
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The company that once seemed a half-step ahead of pop culture today is unable to construct even an appealing new lunch sandwich. Its last successful new product was the Chicken McNugget, which launched in 1983. In the '90s, the company has careened from tests with pizza and veggie burgers to confusing discount promotions such as last year's Campaign 55. Earnings in 1997 inched up 4%, to $1.6 billion, on sales of $11.4 billion, up 7%. That's well below projections McDonald's itself made just a few years ago.
For a company that enjoyed sizzling growth for five decades based on its ability to read and shape popular trends, the breadth of its problems is astonishing. Since 1987, McDonald's share of fast-food sales in the U.S. has slipped almost two percentage points, to 16.2%. The drop has come even as the company has increased its number of restaurants by 50%, far outpacing the industry's expansion rate. The result: Domestic sales have climbed only 18% since 1989, while operating profits haven't even kept pace with inflation. They've risen just 2% a year in that period. That trend has slashed U.S. per-store profits by 20% since 1989--or a huge 40% after inflation. Meanwhile, nearly every other top consumer brand, from Disney to Marlboro, has prospered.
''MENU TWEAKING.'' McDonald's has chalked up that dismal record despite the fact that it owns one of the best known brands on the

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