The junk food industry and McDonalds

The obstacles to entry are very high for new entrants, in fast food industry McDonalds they have achieved high economies of size and also have better usage of recycleables and distribution programs. so new entrants may find that a high cost of investment is required in securing seed and equipment. So these factors will be dangers of new entries for new entrants. However in junk food industry is increasing and presenting an increase in sales at the mean time because of their affordable prices with market meltdown, it creates it appealing to home based business.

BARGAINNG Vitality OF BUYERS

In fast food industry McDonalds is maintain the quite low bargaining ability of buyers. In this case recognized to be quite low risk for McDonald's as consumers have little control over the versions in the merchandise offerings, price, and host to distribution. However, Mom company should take place and any necessary version made. The business should keep customers satisfied, as transitioning cost is quite low and the probability of switching to some other brand in case of dissatisfaction is relatively low. But also for that possibilities are extremely low because McDonald has generated its image one of the consumers through brand, differentiation, quality, variety, environment, customer support, marketing promotions and uniqueness.

BARGAINING Vitality OF SUPLIERS

In this case Supplier electricity is quite high in this junk food industry because there is lesser volume of suppliers, and customers cannot turn to other brands because every brand has generated its image in the consumer's head, that is why consumer cannot swap to other brands. On the other hand, McDonald has established long term relations using its suppliers and McDonalds has significant amounts of effect over their suppliers, because of the fact that it supports them and trains them, the threats from suppliers are quite low. Because of the level of McDonald's operations, suppliers are keen to maintain their agreements with company. McDonald's internationalization may possibly also mean better sales potential for suppliers.

THREATS FROM SUBSTIUTE PRODUCTS

Substitutes product means, which can do the similar function as the original product can do. In this field It could be argued that the risk of substitutes to McDonald's comes from pizza hut, KFC, Din more, burger's ruler and other home fast food businesses. However, the majority of the above businesses do not have the same stranded of convenience that McDonald's provide, and folks heading to McDonald's for eating and entertainment. This makes the list of alternative products quite long specially ENTERTAINMENT & ADMOSFIER.

INDUSTRY FOR RIVALRY AMONG EXISTING COMPETITORS

Every companies looking for competitive advantages. It is the forces that contains their company above others in their business and gives them power of survive in market. On the list of every organization's competition is dependant on the type of business. The amount of firms within the fast food business is low due to the established presence of McDonald's, Burger King, Pizza Hut, Dine More and KFC. However, using marketplaces, McDonald's will face competition from set up competitor fast food stores. for example McDonald's and KFC, and they provide evenly attractive products and services, If buyers don't get customer satisfaction from McDonald's, they'll go to KFC or somewhere else so they must to be regularly satisfied as well as should be very impressive and unique in the products at regular intervals to appeal to and maintain the clients.

RELATIVE Ability OF OTHER STAKEHOLDERS

In every business organizations or industry has stakeholders. It is very important that multinational companies highly consider and value their general public or stakeholders.

Stakeholder for McDonald's Sri Lanka includes.

Customers

Franchise Holders

Employee

Suppliers

Community groups

Share holders

Investors- since McDonalds is a open public company, our shareholders are key stakeholders. Shareholders, it's a one of the lovely broad category but not quite as extensive. Shareholders can be individuals, companies, pension money, mutual cash, etc. Every trader is managed on their own and with company support as well. McDonald's promise the traders or shareholders money that is better than what they could easily get it from some other place in junk food industry.

Employees-, McDonald's employees rely on us for income and benefits, The employees produce and sell the products and services to the exterior consumers. Fundamentally, employees are selling a big part of the lives and must get fair pay and especially Professionals are reassured a good salary if indeed they can form the company and make it profitable. They regularly help 50 to 60 time in weekly.

Community- McDonalds needs the community to survive in competitive market. Because the community builds path way, provides electricity, security, communication and technology and everything. In turn, company are appreciated to keep the community's environment clean and inexperienced.

Suppliers- if any organizations that cannot survive without good suppliers. McDonald's must use their suppliers with good marriage and pay them a fair price because of their products and services. And in addition already McDonald has generated long term relationships using its suppliers and McDonalds has a great deal of effect over their suppliers.

Customers- individuals are one of the important stakeholders, McDonalds should provide fast, successful, good food and customer services on the consistent basis. Then only organization can successfully survive.

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