5C analysis of McDonald’s (5C’s of McDonald’s)
This is a detailed ‘5C analysis of McDonald’s’. It aims to evaluate how five strong forces such as company, competitor, customer, collaborator, and climate influence the business activities and strategies of McDonald’s.
McDonald’s is an American company. It started as a small drive-in restaurant, however, today it has around 34,000 restaurants in 118 countries and territories across the world. It has over 14 thousand restaurants in the USA alone, and 1200 in the UK. It serves more than 3.8 million customers every day (McDonald’s, 2021).
There is no doubt that millions of people around the world trust McDonald’s; however, there are also many people who consider its products junk and unhealthy. McDonald’s operates on a geographical structure, and its markets are North America, South America, Asian & Oceanic Markets, European Markets, and African Markets. This structure helps it address the local needs of the customers effectively.
The net income of McDonald’s in 2019 was around $6.03 billion; however, it was far less in 2020 i.e. $4.73 billion (Lock, 2021). For more information on the company, please read SWOT analysis of McDonald’s.
Collaborators of McDonald’s
McDonald’s works with a big number of suppliers. It needs a lot of food and non-food items to run its daily operations. It focuses on long-term and trusted relationship with them as any disruption in the supply chain may cause it a big harm. This long-term approach is helpful for the suppliers too as they can concentrate on developing their business further.
However, relationships with suppliers and franchisees are not always hassle free. For, instance, McDonalds once considered suing Tyson Foods, Pilgrim’s Pride, and others for artificially inflating chicken prices. Likewise, 52 Black former franchisees considered suing the restaurant over racial discrimination (Lucas, 2020).
Customers of McDonald’s
McDonald’s serves over 3.8 million customers each day. It targets customers from different walks of life. However, the main target group is family with children. This helps it increase the revenue; however, it also requires it work in different ways to make everyone happy.
The customer satisfaction rate good; however, it is virtually impossible for any restaurant to make everyone happy. For instance, McDonald’s ranked the lowest in Australia’s Roy Morgan customer satisfaction poll in 2018. Likewise, many people protested it in Chicago for its low wage schemes, and harassment, and called it the ‘Donald Trump of corporations’ (Lydersen, 2017).
Competitors of McDonald’s
The quick service restaurant industry is very competitive. There are so many players on the global stage vying for the market domination. The main competitors of McDonald’s in the UK, the US, and indeed many other countries are Chipotle Mexican Grill, Burger King, KFC, Pizza Hut, Domino’s, Starbucks, Dunkin’ Donuts, and Papa John’s Pizza.
McDonald’s was the most valuable fast-food brand in the world in 2020 with a value of around $129.3 billion followed by Starbucks with a brand value of around $47.8 billion (Lock, 2021). Competitors of McDonald’s (Competitor analysis of McDonald’s) is a useful read for more information.
The last factor to examine in the 5C analysis of McDonald’s is the climate which is also called context. There is no doubt that a number of macro forces affect the restaurant. Rules and regulations, socio-cultural aspects, and economies of the countries and territories where it operates are some of those factors. For instance, it offers different types of food in different countries to address the local needs. PESTEL analysis of McDonald’s is a good read to explore the topic further.
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Last update: 28 April 2021
Lock, S. (2021) Net income of McDonald’s Corporation worldwide from 2005 to 2020, available at: https://www.statista.com/statistics/219420/net-income-of-the-mcdonalds-corporation (accessed 27 April 2021)
Lucas, A. (2020) 52 former franchisees sue McDonald’s for racial discrimination, available at: https://www.cnbc.com/2020/09/01/52-former-mcdonalds-franchisees-sue-chain-for-racial-discrimination.html (accessed 27 April 2021)
Lydersen, K. (2017) Thousands of protesters brand McDonald’s the ‘Trump of corporations’, available at: https://www.theguardian.com/business/2017/may/24/mcdonalds-chicago-protest-low-wages-harassment-trump (accessed 25 April 2021)
McDonald’s (2021) Our company, available at: https://corporate.mcdonalds.com/corpmcd/home.html (accessed 27 April 2021)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.