Premium Essay

Porter Five Analysis

In: Business and Management

Submitted By victorychen
Words 5502
Pages 23
McDonald’s Corporation
Analyst Maria Jose Abuawad
April 23, 2013

Pros:









Cons:

Figure 1 1 Year Performance MCD vs. S&P 500




Ticker
Exchange
Industry
Sector
Classification
Market Cap.
52 Week Price range
Recent Price
Current P/E
Projected 2015 P/E
Projected 2015 EPS
Dividend Yield
Debt Rating
Beta

MCD
NYSE
Restaurants
Consumer Staples
Income and Capital
Appreciation
US $99.3 Billion
$83.31 - $99.78
$99.05
18.48
17.5x
$7.24
3.10%
A
0.34

Recommendation:

HOLD

Strong brand
Economies of scale
Cohesive franchisee system
International growth opportunities
High profit margins
Pays a dividend
Market share leader
Vulnerable to currency exchange
Highly competitive industry
Obesity propensity
Porter’s Five Forces:







Threat of Competition: HIGH
Threat of New Entrants: LOW
Threat of Substitutes: HIGH
Power of Suppliers: MODERATE
Power of Buyers: MODERATE

Brief Overview
McDonald’s is the leading global foodservice retailer with more than 34,000 local restaurants serving nearly 69 million people in 119 countries. The company operates in the United States, Europe, the
Asia/Pacific, the Middle East, Africa, Canada, and
Latin America. The restaurants offer various food items, soft drinks, coffee, and other beverages, as well as breakfast menus. McDonald’s employs 1.8 million people. It also franchises 80% of its restaurants. The company was founded in 1940 and is based in Oak
Brook, Illinois.1

1

Yahoo Finance

1

Portfolio Considerations
Equity
Holding
Period
Total Return
(%)

Equity
Holding
Period Total
Return ($)

Equity YTD
Appreciation
Return (%)

Equity
YTD
Total
Return
(%)

PE
Ratio
TTM

Equity
Percentage

Dividend
Yield

Ticker

Cost
Per
Share

Altria Group Inc

MO

34.17

33.61

0.9496296...

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