McDonald's Expansion

McDonald Expansion Strategy

McDonald Expansion Strategy

Question 1)

There have been challenges for the fast food industry in recent years that have been pressuring profit margins. The industry as a whole has proven robust enough to withstand these challenges, though some players have done better than others.

Over the last decade there has been increased focus on the quality of food served in fast food restaurants. Typically highly processed and industrial in preparation, much of the food is high in fat and has been shown to increase body mass index (BMI) and cause weight gain. Popular books such as Fast Food Nation and documentaries like Super Size Me have increased public awareness of the negative health consequences of fast food. Fast food companies have responded by adopting healthier choices and have had some measure of success, but the shadow of bad press still hangs over the industry.

Rising commodity prices have also significantly crunched many fast food franchises. With food and beverage inputs making up approximately 33% of costs, higher prices for livestock, corn, wheat and more have seriously shrunk margins over the past decade. In such a fiercely competitive space it is impossible to force a price increase on customers, so profit margins are often south of 10%. The recent economic recession did lower commodity prices, but the recession brought on its own complications, and now prices for commodity inputs are on the rise again.

Question 2)

McDonalds is the words largest fast food corporation, serving more then 57 million people in 119 countries daily with more then 31,000 restaurants world wide in which 6,899 are owned by company and 20,499 are operated as franchise and 3,960 are operated by affiliates.

McDonalds employing more then 1.5 million people worldwide, only in UK Company owned restaurant employed 43,492 in 2004 in which hourly paid employers are 2,292. 2,291 restaurant management and office staff nearly 500. and nearly 25,000 people employed in franchises.

In 2003 McDonalds owned donates pizza, McDonalds owned a majority of stake in chipotle Mexican grill until October 2006, in 2007 McDonalds sold Boston market to sun capital partners.

Andrew j. McKenna is the chairman of McDonalds Corporation since April 2004, aprill Harrell Perrine president blur cross and blue shield of Florida, Jim Dalton vice president Dalton agency, Ryan Schwartz treasurer Zurich insurances,inc. bill van zante secretary McDonalds.

The corporation revenues come from the rent, royalties and fees paid by franchises, McDonald revenues grew 27% over 3 years ending in 2007 22.8 billion and 9% growth in operating income to 3.9 billion.

We know that McDonald is one of the market leaders in the fast food industry around the world. McDonald has grown a lot globally which has posed some problems and challenges in the path of McDonald's success and future progress. Since from being a local fast food player of America to a global company McDonald has grown a lot and so are its responsibilities. With the time many more fast food companies have made there place posing a stiff competition to ...