Managerial Economics

Managerial Economics

admin / January 29, 2019

1. Introduction

The purpose of this paper is to investigate a specific industry and select a representative company from that industry. To organize the paper, this report has selected global fast food industry considering the growth rate, customer base, and competition in the market. The paper will consider McDonald’s Corporation as a representative company of the industry.

1.1 Industry Overview

The global fast food industry instigated its journey at the inauguration of the industrial age; it obtained massive consumer attention along with the materialization of several big businesses in the industry.

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The globalization of the corporate world has boosted the industry to play a major role in causing economic growth to the participating countries as more people prefers fast food because of its time saving approach.

In 2007, the international growth rate of the industry was 4.1 percent, whilst the sales increased by $106.9b; in the following year all the giant players enjoyed rising sales volume with McDonald’s sales increasing by 3.07 percent, KFC’s sales by about 10 percent, and Burger King’s also by 10 percent.

More surprisingly, in spite of the economic crisis, the global fast food industry has showed significant developments in its profit margin in both 2008 and 2009.

A glance of the profit margins of the major players in the US industry will provide a more clear perception of the fast food industry’s success in 2009 in global perspective:

Key CompetitorsProfits 2009
McDonald’s Corporation?22.75bn
Yum! Brands, Inc.$11bn
Starbucks Corporation$9.8bn
Wendy’s/Arby’s Group, Inc.$3.6bn
Burger King Corporation$2.54bn

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