The fast food sector in the current generation is reaching new heights, with increased activity in many outlets around the world. Despite the large number of companies offering their services to clients, certain companies, such as McDonald's, Chipotle Mexican Grill, and Cosi Inc., are vigorously pursuing the top spot in America's fast food business. The organizations provide certain distinctive services to their clientele, which helps them keep their competitive edge in the worldwide market. Hewings clearly points out that the changing economic models and structures tend to favor the uniqueness of an institution aiming to provide the masses with services different from other players in the same field (Hewings, 2011). In this context, the author defines the business approaches which have been exercised by Chipotle Mexican Grill, McDonald’s and the Cosi Inc. Hence, in this perspective it is true to note that the industrial analysis focuses on the primary unique attributes which the specific fast food institutions are bringing into the market in order to come up as the best player in the market.
Vision, Mission, and Values
The management team in any business entity primarily aims to conquer the impossibilities experienced in the market while ensuring they operate in accordance with the vision, mission and the values of the company. In his analysis Kowalscheck affirms that the guiding principles of the mission, vision and the values any given business serve as the building block that holds all the operations in the institution (Kowalscheck, 2013). The implication of this statement is that the level of performance of a firm is somehow directly proportional to the set goals and mission. McDonald’s mission is to provide best quality burgers to a wider client base locally and internationally. For the corporation, their vision is to become the first-choice burger joint and other fast foods they offer. On the part of the values, the firm upholds honesty, trust, diligence and commitment in all their undertakings.
Chipotle Mexican Grill Inc. is a fast-food chain which provides the Mexican market with fresh organic food. The firm has a strong and implementable vision, mission and values which have been the main factors which have propelled its performance in the global market. The mission of the enterprise is to provide fresh burritos, tacos and other fast food ingredients to their customers. The vision of the institution is to become the only trusted organic fast food provider in the region and across the globe. They can achieve all these through the set of values they uphold which include openness, integrity and diligence. Cosi Inc. which is based in Boston is a restaurant which is widely associated with the production of homemade flatbread. The vision of the institution is to become the best restaurant company in the whole of America. On the other hand, their mission is providing amazing flatbread to amazing people which will make them come back for more. Some of the core values they uphold include team-player mentality, accountability and compassion passion in their endeavors.
Analysis
An analysis of the larger economic environment it is essential to note that the level of competition is very high among the first rising fast food restaurants. The combination of all the aspects of production in a conventional and a more conventional way provides the firm with a competitive edge above the other players in the market (Porter, 2008). A PESTEL analysis on McDonald’s proves that the external elements including quality production of foods evidently works to increase the client base for the restaurant. The social orientation of the restaurant seeks to move from the middle class and begin associating with the lower and the high classes without segregation. The political orientation of the region is suitable to encourage the growth and expansion of the firm into other neighboring states. Considering the fact that the food restaurant is in line with all the legal requirements of the state the operation management aimed at increasing profitability is a sure business move to venture. The analysis using the PESTEL module mirrors the conditions set by Porter’s five forces affecting the business setting (Porter, 2008). Some of the major problems the restaurants face include a threat to new entrants which is evident with the first growing Cosi Inc. which is fast gaining mileage in the region. On the other hand, Cosi also brings stress to the overall functioning of McDonald’s by acting as a perfect substitute for they reduce and this is dangerous to the operations of the firm (Roy, 2009). The bargaining power of the suppliers and the industrial rivalry also affects McDonald’s when fast-casual restaurants like Choptle Mexican Grill Inc. begins gaining a welcoming client base in the American market.
Performance Review
Despite the huge levels of competition McDonald’s is still able to produce a positive scorecard and showcase its profit potential in new and existing markets. Osterwalder in his case study points out irrespective of the recession and inflation cases recorded in an economy, the profitability should not be an issue to debate (Osterwalder and Pigneur, 2013). For McDonald’s the global comparable sales for the fourth quarter increased by close to 3% which includes the High growth and the foundational segments. Additionally, the operating income increased by 7 % (recorded by constant currencies). All these elements prove that the profitability index in the fast-food company is increasing irrespective of the rivalry being experienced from other fast-growing firms.
On the other hand, despite the fast-growing state of both Chipotle Mexican Grill Inc. and Cosi Inc. the two firms are facing difficult economic times which jeopardize their profitability. A separate scenario in Choptle Inc. of the availability of E. coli bacteria reduced the profitability margin from 40% to 35%. In the event, the restaurant lost trust in most of their reliable clients and thus they have to scheme methods of bringing back the projected sales so as retain the projected profitability figures (Kowalscheck, 2013). Cosi Inc, on the other hand has not quite yet captured the real market for the homemade flatbread and this is the reason they do not have a certain profitability scale to compete against McDonald’s.
Recommendations
For McDonald’s to realize its optimal potential it is advisable that they consider diversifying the type of burgers they offer their customers. Additionally, the restaurant can consider dealing in organic foods which will ease in taking the Choptle Mexican Grill Inc out of the market. Moreover, increasing the advertising channels to reach the most remote areas in the region will serve to increase the sales of the corporation. Conclusively, by following all the analysis of Porter and PESTEL, the firm will definitely secure its place as the top fast-casual restaurant globally.
References
Hewings, G. (2011). Understanding and interpreting economic structure: Porter’s five force analysis. Berlin: Springer.
Kowalschek, R. (2013). Airbus A380 (Porters Five Forces): Market Analysis. Munich: GRIN Verlag GmbH.
Marne L. A., Rothaermel F. T. (2017). McDonald’s corporation. New York, NY: McGraw Hill Education Publication.
Osterwalder, A., & Pigneur, Y. (2013). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. New York, NY: John Wiley & Sons.
Porter, M. E. (2008). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press.
Roy, D. (2009). Strategic foresight and porter's five forces: Towards a synthesis. London, New York, NY: Grin Verlag Ohg Publications.
Appendix A
Mission, Vision and Value Statement
Company
Mission
Vision
values
McDonalds Corporation
We provide best quality burgers to the clients
To become the first-choice burger joint in the world
Honesty
Trust
diligence
Choptle Mexican Grill
We provide quality and trusted organic fast foods to the clients
To become the first organic food provider in America
openness
integrity
diligence
Cosi Inc
We provide high quality homemade flat bread in the world
To surpass all other fast food joints and share their nutritious food with amazing people
team-player mentality
compassion
compassion
Appendix B
PORTER’S FIVE FORCE ANALYSIS
Threat of new entrants
Low barriers to entry
Federal licensing required
Bargaining power of suppliers
The buying volume is beneficial
Huge numbers of suppliers
Bargaining power of Buyers
Lots or retails stores
Marketing power of burgers exists
Rivalry of existing competitors
Highly competitive
Low market share for the buyers
Threats of Substitutes
There are substitutes for burgers
Appendix C
PESTEL Analysis
Legal/political
Government interference and licensing of the fast foods joints
Control of trade into other states
Economy
All the companies tend to comply with the flexibility of the economy and they always channel ways to maintain the fast food business
Social
The goods produced are customer friendly and concur with the ethics and norms of the different societies where they are stationed.
Technological
Electronic advertisement tends to improve the marketing scheme for the various companies
Ecological
The various companies keep in mind the importance of maintaining a green environment with the minimal use of chemicals.
Appendix D
Competitive Analysis
Fast-food joint Ranking in America and the overview of the number of outlets (StatArea 2016)
Rank
Fast food chains
Fast foods
outlets
1
McDonald’s
7523
6577
2
Choptle Mexican Grill Inc
5341
3400
3
Cosi Inc
4538
2089
