Fast Food Industry
Fast Food Chains
The purpose of the study is to analyze the application of concepts and theories of managerial
economics in relation to the actual data and information from the fast food industry and
Two fast food chains have been studied and analyzed throughout the project. MacDonald’s
and Burger King have been chosen as part of Fast Food industry because both companies are
the biggest and closest competitors of each other; they both provide an insight of the frame of
the industry, advantages and disadvantages of franchise system and production techniques,
demand and supply chains, keys of success and weaknesses that could bust or hinder growth
in short- and long-term.
The study concentrates on demand and supply structure in the industry, market forms in
which the industry can operate optimally, scope of production, production techniques, cost
structures, prevailing market conditions and their impact on the firm, and financial analysis of
To collect the relevant data, the companies’ annual reports were critically analyzed and
evaluated for exact position to be sorted, the current market conditions to be measured and
their possible future effects on the firms working environment to be evaluated.
McDonald’s is located in 117 countries and on 6 continents and operates over 32,000
restaurants worldwide. McDonald’s is the clear market leader in the fast food industry. For
2010 the company recorded $24 billion in sales, the highest in the industry, with continues
increase year over year (“McDonald's Corporation”, 2010).
Burger King has more than 12,100 restaurants in 76 countries. As with McDonald’s,
approximately 90 percent of restaurants are owned and operated by independent franchisees.
The company has the second highest sales in the industry with generated sales of $2.5 billion
(“Burger King Holdings, Inc”, 2010).
McDonald’s and Burger King concentrate on burgers in their menus. However, while
McDonald's has diversified into salads, paninis and cappuccinos, the Burger King menu
remains firmly rooted in burgers, fries and fizzy drinks (Clark, 2010). Furthermore,