Question

How does McDonalds Corporation develop or analize this factors? (they are focused on the bargaining power of suppliers): 

FACTOR 1:

the suppliers are more concentrated than their rivals in the sector 

EXAMPLE:

Microsoft and Intel have bargaining power due to their dominating market shares and the fragmentation of their computer manufacturing customers. 

FACTOR 2:

The participants of the sector face the costs of changes

EXAMPLE:

A supplier has more bargaining power if it is difficult for shareholders to switch to competing suppliers.

FACTOR 3:

Suppliers offer differentiated products

EXAMPLE:

If customers believe that suppliers' products differ significantly, competition is reduced and prices tend to increase.

FACTOR 4:

Few substitutes for the supplier's products

EXAMPLE:

The suppliers of patented pharmaceutical products that offer unique benefits have a great bargaining power.

Thank you

Answer 1

The probable reason for MacDonalds success and growth was obvious:

• They entered a virtual vacuum. Other than Dairy Queens and A & W drive-ins, there were only random restaurants offering the sort of fast food that younger Americans were looking for as they cruised in their 1962 Chevies.

• They were consistent and tasty. Although the early McD's had no dining room, they offered good tasting hamburgers, fries, and shakes at a very low price and a high degree of consistency.

• They always understood the concept of location. If there was a major thoroughfare like Roosevelt Road [Chicago] or Excelsior Boulevard [Minneapolis], McDonalds was there, always with ample parking and easy access.

• Promotion. In the early days, store signage trumpeted the number of burgers sold worldwide and the company was willing to co-sponsor events like Disney movies and attractions.

• Franchise system. The greatest advantage of McD's then and today is the usage of the franchise system which finances growth by attracting individual investors who own franchises. This makes the stores more efficient than corporate-owned expansion and creates a natural incentive to run an efficient business and it means you don't have to incur debt or finance growth out of operations.

• All of these factors worked to make this chain the most successful individual franchise in the world.