Bus 305: Discussion # 2- Company Strategy & the Marketing Environment

Please read the TIME article summarizing an interview with McDonald's CEO, Chris Kempczinski. This reading reflects strategic thinking and planning taking place at the corporate level. Upon completion of this discussion forum, you should be able to analyze a company's position in the market using the BCG Matrix and assess its growth strategies using the Ansoff Matrix. Url:https://time.com/5873626/mcdonalds-coronavirus-chris-kempczinski/

Below is a table depicting McDonald's recent market share:

Top five fast food brands By global market share Mcdonald's KFC Subway 7-Eleven Burger King 15% 12 CO O 2009 2011 2013 Source: EuromonitorPearson Sign In x Course Modules: x Topic: Discussion x = Bus 305: Discuss x Abbreviated IBIS | x Microsoft Word - X Bus 305: Confirm x Search results - a x + @ File | /Users/abrildelcielosanchez/Downloads/Abbreviated%20IBIS%20World%2072221%20Fast%20Food%20Restaurants%20in%20US.pdf GRUAIA G Google YouTube Ng Gmail $4 Service Learning <_> Canvas: CSUMB O Dashboard | CSU... 6 California State U... P Bus306: Principle. @ Grammarly MyHealth at Stanf... S dignity - Home Microsoft Word - 72221A Fast Food Restaurants in the US Industry Report 2 / 6 90% + Fast Food Restaurants in the US August 2020 About This Industry IBISWorld Industry Definition This industry comprises restaurants where patrons pay for quick-service food products before eating. Purchases may be consumed on-site, taken out or delivered. This industry excludes coffee and snack shops. Most industry WHERE KNOWLEDGE IS POWER establishments also sell beverages, such as water, juice and sodas, but usually not alcohol. I INDUSTRY REPORT 72221A Major Players There are no major players in this industry Fast Food Restaurants in the US Main Activities The primary activities of this industry are: Operating quick-service restaurants Operating fast food services Operating drive-thru and take-out facilities On the go: an improving domestic economy will boost industry revenue The major products and services in this industry are: Burgers Thi Le | August 2020 Sandwiches Global Pizza and Pasta Chicken OtherFast Food Restaurants in the US August 2020 Supply Chain Key External Drivers Consumer spending Consumer Confidence Domestic trips by US Index residents Healthy eating index Urban population Animal Food Soft Drink, Baked Consumers in the US Production in the US Goods & Other Grocery Wholesaling in the US Frozen Food Production in the US Restaurant & Hotel Equipment Wholesaling in the US Dairy Product Production in the US Computer & Packaged Software Wholesaling Soda Production in the in the US Grocery Wholesaling in Brand Production in the the US US Fast Food 1st Tier Buyers 2nd Tier Suppliers 1st Tier Suppliers Frozen Food Restaurants in Baking Mix & Prepared Wholesaling in the US Food Production in the the US UIS Dairy Wholesaling in the US Major Household Appliance Manufacturing in the Egg & Poultry US Wholesaling in the US Computer Beef & Pork Manufacturing in the Wholesaling in the US LIS Confectionery Sugar Processing in Wholesaling in the US the US SIMILAR INDUSTRIES Specialty Food Stores in the US Chain Restaurants in the US Single Location Full-Service Caterers in the US Restaurants in the US Street Vendors in the US Bars & Nightclubs in the US RELATED INTERNATIONAL INDUSTRIES Global Fast Food Restaurants Fast Food and Takeaway Food Fast-Food Restaurants in China Takeaway & Fast-Food Restaurants Services in Australia in the UK Pizza Delivery & Takeaway in the Fast Food Restaurants in Canada Fast Food and Takeaway Food Restaurants and Takeaways in UK Services in New Zealand IrelandFast Food Restaurants in the US August 2020 Industry at a Glance Key Statistics Key External Drivers 1 -2015-30 Annual Growth $239.0bn 2.7% 0.6% Consumer Confidence Index Consumer spending 0.9% -15.2% Annual Annual Annual Growth Urban population Domestic trips by US residents Growth Growth 2014-2825 0.0% 2018-2020 2020-2021 Healthy eating index -0.4% 3.4% Industry Structure $8.8bn POSITIVE IMPACT Capital Intensity Concentration Low Low Annual Annual Growth Industry Globalization Growth 2015-2020 Low / Excady 2015-2020 -9109% O MIXED IMPACT Life Cycle Revenue Volatility 3.7% Mature Medium Profit Margin Angulation & Policy Technology Change Medium Annual Annual Growth Medium / Increasing Growth 2014-2020 2018-2020 A NEGATIVE IMPACT -21pp Industry Assistance Barriers to Entry Low / Increasing Low / Increasing Competition 192k High / Increasing Business Annual Annual Annual Growth Growth Growth 2014-2028 2015-2020 2620-2024 Key Trends 0.7%% 2.0% Some consumers have remained less willing to spend on meals outside of the home All dining areas are required to temporarily close to curb 92 4m the spread of the virus EmplayTrain . The profit margin is forecast to fall in 2020 due to a Annual Annual Annual Growth faltering demand and a supply chain disruption Growth Growth 2014-2028 Despite continued growth in industry revenue, Intense 2015-2020 2020-2024 competition will likely persist 0.6%% 2.7% . Industry profit is expected to revert to the pre-crisis level Companies that offer healthy options will likely experience strong establishment growth $66.3bn Many major chains have also invested in ment allematives and other dietary changes Annual Annual Annual Growth Growth Growth 2014-2828 2015-2020 2020-2024 1.1% 2.9% IBISWorld.comFast Food Restaurants in the US August 2020 Products & Services Segmentation 33,69% 11.29t 8.99% 8.5%% 10.9% 26.99% Burgers Sandwiches Global Pizza and Pasta Chicken Other Fast Food Restaurants BouIDR: 1815World Major Players SWOT There are no major players in this industry S STRENGTHS Low & Increasing Level of Assistance Low Imports Low Customer Class Concentration Low Product/Service Concentration Low Capital Requirements W WEAKNESSES Low & Increasing Barriers to Entry High Competition Low Profit vs. Sector Average Low Revenue per Employee O OPPORTUNITIES High Revenue Growth (2020-2025) Healthy eating index T THREATS Low Revenue Growth (2005-2020) Low Revenue Growth (2015-2020) Low Outlier Growth Low Performance Drivers Consumer spendingFast Food Restaurants in the US August 2020 Executive Over the five years to 2020, the Fast Food Restaurants industry has Summary grappled with shifting consumer preferences and a saturated food service landscape that have kept prices low. The addition and popularity of fast-casual restaurants have also boded well for this industry as a whole, helping the industry maintain revenue growth before taking a hit in 2020. Nonetheless, intense internal and external competition has forced fast-food operators to emphasize low prices in a battle to attract consumers. This has been intensified by falling consumer sentiment, resulting from economic fallout following the COVID-19 (coronavirus) outbreak in 2020. Moreover, the mandatory shelter-in-place order imposed in most states has led to an abrupt drop in industry demand, causing industry revenue to decline an estimated 16.0% in 2020. As a result, industry revenue has declined an annualized 0.4% to $239.0 billion over the five years to 2020. Eating habits have changed as people have become increasingly health-conscious, demanding alternatives to traditional fast food options. While major fast food retailers have expanded their healthy offerings, the general trend toward health awareness has decreased demand for traditional fast food restaurants in favor of growing fast-casual restaurants. Many major chains have invested in meat alternatives and other dietary changes to attract nontraditional consumers as part of a long-term strategy to adjust to the changing consumer landscape. Consequently, industry profit, measured as earnings before interest and taxes, was relatively volatile over the past five years as industry players adjusted their product mix. Industry revenue is expected to recover over the next five years as the domestic economy improves. While competition will likely remain high, the industry's revenue growth is anticipated to be robust when restrictions are eased. Nevertheless, fast food restaurants will likely continue to operate in a slow-growth environment, as many segments of the industry have reached a saturation point. Successful operators are expected to adapt to changing consumer preferences as the traditional concept of fast food evolves to include a wider variety of options. Nonetheless, industry competition will likely keep prices low, cutting into overall revenue growth over the next five years. As a result of these trends, industry revenue is expected to increase at an annualized rate of 3.4% to $281.9 billion over the five years to 2025