Last update on 2024-03-05

McDonalds (MCD) Explained

An Overview of MCD: Its Business Strategy, Core Products, Major Competitors, and Essential Insights into its Role in the Restaurants Industry

McDonalds is the largest restaurant owner-operator in the world, with 2021 system sales of 112 billion across nearly 40,000 stores and more than 100 markets. McDonalds pioneered the franchise model, building its impressive footprint through partnerships with independent restaurant franchisees around the world. The firm earns more than 60% of its revenue from franchise royalty fees and lease payments, with the remainder coming from company-operated stores across its three core segments: the United States, internationally operated markets, and international developmental/licensed markets. McDonalds owned 55% of the real estate and 80% of the buildings in its franchise system as of the end of 2021, offering it substantial leverage in maintaining quality standards and consistency.

Current Business Strategy

McDonald's continues to focus on enhancing customer experience through innovation and technology, expanding its global presence, modernizing its restaurants, emphasizing sustainability, and menu diversification to cater to changing consumer preferences. The company aims to drive growth through digital integration, delivery services, and a focus on core products while exploring new market segments.

Most known Products

Here is the list of the 5 most well-known products of McDonalds (MCD):

• Big Mac: A signature burger consisting of two beef patties, special sauce, lettuce, cheese, pickles, and onions on a sesame seed bun.
• McNuggets: Bite-sized pieces of processed chicken meat that are breaded and fried, served with various dipping sauces.
• French Fries: Thinly cut and deep-fried potatoes, known for their crispy exterior and fluffy interior, often seasoned with salt.
• Happy Meal: A children's meal that includes a main item (like a hamburger or nuggets), a side (like fries or apple slices), a drink, and a toy.
• McFlurry: A soft-serve ice cream dessert mixed with pieces of candy, cookies, or other sweet toppings, served with a spoon.

Competitors

Here is the list of the main 5 competitors of McDonalds (MCD):

• YUM: Yum! Brands, owner of KFC, Taco Bell, and Pizza Hut, represents direct competition in the fast-food industry offering diverse food options which cater to different customer preferences.
• SBUX: Starbucks competes in the quick-service segment, particularly in the breakfast and coffee segments, emphasizing high-quality coffee products and a unique customer experience.
• QSR: Restaurant Brands International, which owns Burger King, Tim Hortons, and Popeyes, directly competes with McDonald's in the fast-food burger and breakfast segments.
• WEN: The Wendy's Company is a direct competitor in the fast-food hamburger segment, known for its fresh, never frozen beef hamburgers and its presence in similar markets as McDonald's.
• CMG: Chipotle Mexican Grill is a competitor in the fast-casual segment, offering a higher quality of food with an emphasis on organic ingredients and customizable meals, appealing to health-conscious consumers.