McDonalds

External (OT) Analysis

Industry/Competition Opportunities

* Demand for quick, easy meals is continuing to increase: The on-the-go lifestyle of people is continuing to increase drastically and the need and desire for quick, easy meals is also increasing. People are always hurrying, always on the run, and they are having more and more difficulty finding time for actual sit down meals. As this on-the-go lifestyle continues, the “fast food” industry has a great opportunity to continue increasing its business with these particular consumers (Coulter).

* Overall money spent on fast food is continuing to increase: In 1970, Americans alone spent over $6 million on fast food alone. This number has been rapidly increasing over the years to last year’s total of over $100 million spent on fast food. The industry is continuing to see support of consumers in an increasing pattern (http://www.mcspotlight.org/media/press/rollingstone1.html).

Industry/Competition Threats

* New competition from venues offering “healthier choices” for a quick meal: As consumers are looking for these healthier choices for their quick lunch or dinner, the typical “fast food” industry is seeing more and more competition from venues that previously were not a threat. These new venues are better equipped to offer the healthier choices, and in order to keep up, the “fast food” industry is having to look into ways to do the same (Coulter).

* Other food industries trying to break into the breakfast market: For the “fast food” industry, the breakfast market is a big money maker. Currently however, many companies outside of this industry are trying to pull from this market as well. The increased competition for consumers’ breakfast business could potentially hurt the “fast food” industry as they could loose significant business to other industries (Coulter).

Economic Opportunities

* Increasing median household income in the United States allows for more money to be spent eating from the “fast food” industry: The median household income in 1990 was recorded to be $29,943, and number which jumped to $34076 in 1995 (http://www.census.gov/Press-Release/state13.prn). In 2006, the median household income was again recorded even higher, at $48201 (http://en.wikipedia.org/wiki/Household_income_in_the_United_States). As income increases, so does disposable income, which allows for more money to be spent by household in the “fast food” industry.

Economic Threats

* Increasing median household income in the United States could draw business away from the “fast food” industry and into more expensive food industries: With the median household income continually increasing, the fast food industry could suffer due to households choosing to eat at more expensive venues. Just like more income means more disposable income, the consumers could choose to put that extra disposable income into higher priced restaurants (http://en.wikipedia.org/wiki/Household_income_in_the_United_States).

* Increasing prices are causing the industry to struggle to keep its prices low: Fast food is expected to not only be a quick and easy option for people to get their meals, but it is also expected to be cheap. As the prices of the different ingredients and products that are used in the final product increase, the industry is struggling to maintain that “cheap option” image (Coulter).

Demographic Opportunities

* Continuing population increase helps ensure consumer increase: As the world’s population is a quickly increasing number, the number of potential consumers for the “fast food” industry is also increasing. In 1988, the world population was recorded to be around 5 billion. In 2000, this number jumped to around 6 billion. As of 2007, the world’s current population is estimated at 6,602,224,175

(https://www.cia.gov/library/publications/the-world-factbook/print/xx.html).

* Longer life expectancy can help retain consumers: The average life expectancy for white males in the United States in 2004 was 80.8 years, up from 72.03 in 1950. The average life expectancy age is a number that has been steadily increasing over the years. This increase in consumer life expectancy allows for current consumers to be retained longer (http://www.infoplease.com/ipa/A0005140.html).

Demographic Threats

* Aging population seems to prefer sit-down, full service dining: As the industry is seeing the population age, it is becoming clear that the aging consumers are partaking less and less from the “fast food” industry. Rather, this part of the market is turning to other