Question

Mc Donald's and like natural ways of life have gigantic financial support and a great deal of political sponsorship too. they go to the area and set up stores. with their cash power, they promote and produce in mass making the nourishment item modest and well known. In this way, the opposition is done, and the costs fall quickly. The economy scale is utilized with the goal that the mass and mass creation prompts a lot less expensive creation cost to large ties prompting misfortunes to the remainder of the opposition. Along these lines, the utilization of these two strategies has prompted the change of the nourishment business where the littler makers are not ready to confront the opposition.

Reply with a discussion either to agree or disagree with the above?

Answer 1

I agree with the discussion. McDonalds have been in the industry from long time and have huge financial support and political sponsorship. They focus on economies of scale to get higher revenues and build the profit line. It is very easy for them to go out in any area and set up a store. They just have to replicate the store design and furniture which is much cheaper for them compared to opposition. Due to high volume, the marginal cost for each additional unit is much lesser leading to high profitability. Hence, the opposition is removed from the competition and they are able to enjoy monopoly in the area.