McDonald’s is one of the leading and most famous fast food companies globally. In 2020, the profit of this giant amounted to almost five billion U.S. dollars, and the revenue of the organization amounted to almost twenty billion U.S. dollars (“Net income of McDonald’s Corporation worldwide from 2005 to 2020”, n.d.). However, the net income decreased to six billion U.S. dollars compared to l last year. The leading indicators of the company’s efficiency, which also depend on emerging trends, are the percentage of product defects, profit, cost of goods, the satisfaction of customers and employees. Following these indicators, the company has the opportunity to develop the competence to reduce costs that affect its financial performance. These aspects often negatively affect the performance of any company, especially such a large one. The efficiency of the organization’s work consists of the fact that employees’ salaries have increased despite the rise in the price of some resources. Moreover, the decline in the company’s indicators can positively impact its profits.
Trends for the company:
- Traffic keeps shrinking
Despite the difference from the indicators and success that companies do not have customers, customer turnover is the first trend that needs to be considered.
- Delivery challenges related to promotional pricing
Many companies that are offering promotional pricing to obtain a market share, and that situation appears to be adverse for the company since its competitors Domino’s and McDonald’s.
- Clues for the financial steps forward
Research shows that “McDonald’s has 44% of operating margin” (Kalogeropoulos, 2020, para. 7). However, the core profitability figure hold steady for the last year. It grew seven years ago and it was powered by the chain’s refranchising initiative. This may cause stakeholders to be unwilling to continue their activities due to the impossibility of growth.
References
Kalogeropoulos, D. (2020). McDonald’s earnings: 3 trends to watch. The Motley Fool. Web.
Net income of McDonald’s Corporation worldwide from 2005 to 2020. (n.d.). Statista. Web.