Over the past couple of years, McDonald’s has experienced challenges resulting in a decrease in revenue and profits. Reports show that the industry McDonald’s operates in, including its competitors, are seeing a change of demand, shifting toward a healthier segment of fast food. This report aims at analyzing and accounting for why McDonald’s is declining in revenue, both in their internal and external environment. It will account for McDonald’s on a global scale, where in specific sections, such as regarding corporate governance and when discussing the Herfindahl Index (pp. 18), it will instead focus on the U.S. market for a more precise analysis.
This paper starts by presenting the initial foundation of McDonald’s, as well as the liability of newness and application of Boeker’s imprinting and traditionalizing forces. From there, Mintzberg’s Configuration Theory and Greiner’s Life Cycle Model, with accounts of Penrose’ release of managerial resources, are discussed to show the structural change and the leadership crises McDonald’s has encountered. Also how there is a clear correlation between Mintzberg and Greiner. Furthermore, the horizontal and vertical boundaries are reviewed, together with Williamson’s Transaction Cost Economics. The last analysis section will focus on the industry lifecycle and Porter’s Five Forces, where also the resource-based view is explored, including the VRIN and SWOT models. Lastly, a discussion about the concluding findings will be provided.