poter analysis

1. Assumptions
 OperatinginIndianlandscape
Porter five forces
1.Competition in the industry - strong
 Saturated market with low profit margins
 Switching cost is low which makes it easy for customers to transfer
restaurant’s
 The growing awareness among customers about healthy foods
 Frequent lockdowns because of COVID-19 and strict restrictions on
resturants
2. Potential of new entrants into the industry – Moderate
 The brand development cost for creating something equivalent to Macdonald
would be high
 The capital investment in setting up restaurants of similar convenience in
prime locations is high
 But it is easier to setup small and medium business easily
3. Power of suppliers - weak
 Large number of suppliers available which weakens the power of individual
supplier
 Lack of vertical integration in suppliers so they do not control the supply
chain network
 MacDonald’s CSR activities and stakeholder management approaches helps
to maintain good relationship with suppliers
4. Power of customers - strong
 Low switching cost so MacDonald’s not able to price the products high
 There are several choices and restaurants and kiosk’s available in food
segment
 Indian mentality of judging MacDonalds as unhealthy instead preferring
homemade foods
5. Threat of substitute products - strong
 There are several substitute products available especially in the Indian
market
 The substitute available are also cheaper than the MacDonalds products. So
able to maintain high performance to cost ratio
