McDonalds - Five Forces Analysis

McDonalds - Five Forces Analysis

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Short description of Porter's Five Forces analysis for…

Intensity of Existing Rivalry

Exit barriers are low (McDonalds) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...
Large industry size (McDonalds) Large industries allow multiple firms and produces to prosper without having to steal market share...

Bargaining Power of Suppliers

3
Critical production inputs are similar (McDonalds) When critical production inputs are similar, it is easier to mix and match inputs, which reduces...
High competition among suppliers (McDonalds) High levels of competition among suppliers acts to reduce prices to producers. This is a positive...
Volume is critical to suppliers (McDonalds) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...

Threat of Substitutes

Bargaining Power of Customers

Large number of customers (McDonalds) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

20
Geographic factors limit competition (McDonalds) If existing competitors have the best geographical locations, new competitors will have a...
Strong distribution network required (McDonalds) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
Strong brand names are important (McDonalds) If strong brands are critical to compete, then new competitors will have to improve their brand...
Customers are loyal to existing brands (McDonalds) It takes time and money to build a brand. When companies need to spend resources building a brand,...

What is Porter's Five Forces Analysis?

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