Fast-food restaurants are famous for their short food preparation time and are best known as quick service restaurants (QSR). They represent one of the main segments of the food industry with over than 200,000 restaurants; and according to the National Restaurant Association, American sales of fast-food equaled $163.5 billion in 2009. The overall fast-food market was about to cross $170 billion in 2010. There is an extensive amount of the fast-food restaurants today, where McDonalds appears to occupy one of the leading positions in terms of rivalry. It was one of the first QSR to appear in the middle of 20th century and, hence, was one of the most popular. It stays that way these days and is surely the biggest fast-food company in the world according to the Forbes magazine. However, the number of competitors is growing every year especially in the USA where fast food industry is a part of the culture. The following Table 1 is the Competitive Profile Matrix for McDonalds including its two major competitors Burger King and Yum! Brands, Inc.

Table 1

Competitive Profile Matrix for McDonalds

 

McDonalds

Yum!

Burger King

Critical Success Factors

Weight

Rating

Weighted Score

Rating

Weighted Score

Rating

Weighted Score

Brand Name

0.10

4

0.40

3

0.30

3

0.30

Product Quality

0.09

2

0.18

3

0.27

3

0.27

Public Image

0.07

3

0.21

3

0.21

3

0.21

Market Score

0.09

4

0.36

3

0.27

3

0.27

Price Competitive

0.05

3

0.15

2

0.10

2

0.10

Innovation

0.03

3

0.09

3

0.09

3

0.09

Advertising

0.06

4

0.24

2

0.12

3

0.18

Market Expansion

0.07

4

0.28

3

0.21

4

0.28

Customer Service

0.06

3

0.18

3

0.18

3

0.18

Financial Position

0.05

4

0.20

3

0.15

2

0.10

Sales Distribution

0.07

3

0.21

3

0.21

3

0.21

Strategic Partnerships

0.04

3

0.12

2

0.08

2

0.08

Number of Locations

0.09

4

0.36

4

0.36

3

0.27

Corporate Social Responsibility

0.05

4

0.20

3

0.15

3

0.15

Geographic Coverage

0.08

4

0.32

4

0.32

3

0.24

Total

1.00

 

3.5

 

3.02

 

2.93

Findings

First column of the table contains all key success factors of the fast-food industry (i.e. Brand Name, Market Share, Advertising, etc.). The second column presents weights of each factor ranging from 0.0 not important to 1 most important. The factors that have the greatest influence on the organizational performance have greater weights. The sum of all weights has to equal 1. The third, fifth and seventh columns contain the rating from 1 to 4 of each critical success factor for all three companies. Thus, rating 1 represents the major weakness while rating 2 is the equivalent to the minor weakness. Similarly, rating 3 expresses minor strength while rating 4 represents major strength. Hence, the weakness receives rating 1 or 2, whereas strength gets rating 3 or 4. The weighted scores in columns four, six, and eight are calculated by multiplying each factors score by its rating. The total weighted score is received by finding the sum of all weighted scores for each variable.The McDonalds competitiveness is evaluated based on its overall strength rating. The company has greater competitive advantage if the overall ratings are higher than the scores of the lower-rated rivals. At the same time, if the difference between the companys overall rating and the scores of higher-rated competitors is bigger the company has greater net competitive disadvantage. Hence, the competitive profile matrix presents that the total McDonalds weighted score is higher than Yum! Brands, Inc. and Burger King. This means that McDonalds possesses the strongest competitive position. At the same time, Burger King has the lowest weighted score compared to McDonalds and Yum! Brands, Inc., which means it has net competitive disadvantage (MBA Lectures, 2010).The apparent competitive advantage of McDonalds is its brand name. The weighted score for it is 0.40 while Yum! Brands, Inc. and Burger King both have 0.30. Brand name has the largest weight of 0.10, which determines how recognizable the image of the company is. Hence, McDonalds biggest strength is in its name that is the most recognizable to the customers and investors. Even though McDonalds product quality factor, which is 0.09 points of total weight, has the lowest weighted score of 0.18 in comparison to its rivals, the market score and the number of locations factors, which are also 0.09 points of total weight in the industry, are both 0.36 that is significantly higher in comparison to its rivals. In other words, McDonalds has a competitive disadvantage in some critical success factors of the low weight but has a competitive advantage in all of the critical success factors of the high weight in the industry. Interestingly, all of the companies have equal public image weighted score. Nevertheless, the fact remains that McDonalds possesses the highest total weighted score of 3.5 in comparison to Yum! Brands, Inc. with its 3.02 weighted score and Burger King with the lowest 2.93 weighted score.

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The Competitive Profile Matrix for McDonalds supported the idea of the Forbes magazine ranking of this QSR to still remain number one in the fast-food industry. Revenue of McDonalds for 2012 was $27.79 billion. Burger King is not even close enough to its largest competitor with its $2335.7 million in revenue for the year 2012. Moreover, the revenue of McDonalds kept growing since 2010, while the revenue of Burger King fell since that year. Yum! Brands Inc. in turn presents more favorable picture in terms of sales than Burger King yet not good enough in comparison to McDonalds. Its revenue was $13.16 billion in 2012. In general, the revenue depicts almost exact situation presented in the Competitive Profile Matrix. McDonalds has the competitive advantage to both Burger King and Yum! Brands, Inc.DiscussionThe external assessment of McDonalds seems to be favorable to enhance positive strategic prospects for this world leading QSR. McDonalds stands out for its brand name, innovation, and fast spread across numerous geographic regions.The discovery of new business opportunities is the biggest strategic prospect for McDonalds. Management, investors, and customers made and will keep making McDonalds a company with even stronger competitive advantage. For instance, it keeps broadening its product portfolio. McDonalds has already offered high quality coffee and healthy drinks creating competition for Starbucks and local cafeterias.McDonalds as any other company has opportunities to grow. Fast food that is offered by this firm is considered unhealthy and in fact harmful for the human body. The trends of healthy lifestyle are growing. Having a stable popularity in terms of brand name and billions in sales, the company has all chances to offer food that would cost more but would be much healthier. Hence, it could help to follow the society trends. Besides, the fast-food industry is increasing. McDonalds has an opportunity to increase within it in terms of globalization.Even though McDonalds has numerous rivals, its strong competitive advantage is apparent. For now, the company possesses a good standing among all other QSRs occupying the highest positions in the fast-food restaurants rankings. Regarding the macro environment, there is no legislation in the USA that would not allow this restaurant to operate or enter the market, even though the company was sued for being the cause of increased obesity. McDonalds is affected by the economic environment such as latest recession in 2008, which caused many people turn to cheap fast-food with no opportunity to purchase more expensive healthy food. Finally, it is a well-known fact that McDonalds and fast-food industry in general became a part of the culture of American people. Thus, the company must follow the trends of the society and perform to meet new needs directly.McDonalds remains the leader among all of the famous fast-food restaurants, and it keeps growing in terms of sales. The Competitive Profile Matrix presented the fact that the company has strong competitive advantage over at least Burger King and Yum! Brands, Inc. Moreover, McDonalds keeps working on improving its strategic prospects as well as enhancing opportunities.

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