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Compare products of McDonalds to Burger King

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Topic Fast food chains

1) Identify the product, industry, and two firms in the selected industry.

The product is Hamburger. The industry is Fast Food Chains and the two firms are McDonalds and Burger King.
2) With the help of industry reports and related articles, collect information about the:

Types of products that can be produced in the industry.

Both fast food chains produce hamburgers. McDonald's has the Big Mac, which consists of two all beef patties, special sauce, lettuce, cheese pickles on a sesame seed bun. Burger King has the Whopper which is flame broiled and can be special ordered. (Hayes 2004)

The prevalent demand and supply structure in the industry.

McDonald's is the hamburger leader with 31,000 locations worldwide and Burger King comes in a close second with 11,200. (Hart 2007) The demand is there and McDonald's has the franchise power to expand its market share demographic. Today's consumer wants a healthy meal even if it's fast food. McDonald's Big Mac rates higher overall. "McDonald's hamburger has only 9g of total fat; while Burger King's hamburger had 12g. I was also interested in the salt content of each of their hamburgers. McDonald's hamburger has 520g of salt; while, Burger King's hamburger has 560g of salt." (Hart 2007)
The market forms in which the industry can operate optimally.

This industry operates optimally in all locations worldwide. The consumer wants a good, reputable hamburger and both companies offer that. Personal taste will be the deciding factor. (Johnston, 2004)

Johnston, David (2004) In the New Economics: Fast-Food Factories?
The power of Beef John Hayes 2004
Hart, Brian (2007) Who makes the better hamburger?

I have to collect information with the help of annual reports of the firms about the following I have to state the following:
? Scope of production and techniques used in production.
? The cost structure required to produce the product.
? The prevailing market conditions and their impact on the firm.
? Performance with reference to sales and profits over 3-5 years.
? Reasons why you chose the two firms.
? Tasks performed to collect relevant data.
? The inferences drawn from your research.

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Solution Preview

The response addresses the queries posted in 672 Words, APA References

Fast Food Chains: McDonalds & Burger King

Both the firms i.e. McDonalds and Burger King have the vast scope of production because both the fast food chains want to capture a large market share by offering higher quality products in a short duration of time. Both the firms expand its operations through franchises, which is another great reason for the vast scope of production. Both the fast food chains use the cost effective techniques (Burger king Holdings, Inc, 2008), value based techniques and hygiene techniques (McDonald's Corporation, 2008) in order to provide fresh and healthy food at the reasonable rate because both the firms want to offer good customer service.

Both the firms have to follow the cheaper cost structure to produce the product, so that it will be easy for the firms to offer products at the reasonable price. But the cost structure of the firms must cover the required elements of the costs i.e. material, labor and expenses. Material cost includes the cost of raw materials i.e. burger base, cheese, beef, potatoes, etc. Labor is another most important element of cost that covers skilled & efficient employees, service providers, ...

Solution Summary

The response addresses the queries posted in 672 Words, APA References

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Ratio Analysis between McDonalds and Burger King years 2010 and 2011

Ratio Analysis portion of the case study report and submit it as an attachment here. Note that your Ratio Analysis should include ratios for the years 2010 and 2011 and should include comparisons between McDonalds and Burger King.

Organize your ratio analysis per the following outline:

1. Liquidity
-Current ratio
-Quick ratio
-Comments on liquidity

2. Asset management
-Total Asset turnover
-Average collection period (ACP)
-Comments on asset management

3. Debt management
-Debt ratio
-Times interest earned
-Comments on debt management

4. Profitability
-Net profit margin
-Return on Assets (ROA)
-Return on Equity (ROE)
-Extended Du Pont equation
-Comments on profitability to include your comments on the sources of ROE revealed by the Du Pont equation

5. Market value ratios
-PE ratio
-Market to book ratio
-Comments on the market value ratios

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