Discuss the firm’s ability to sustain LR profits that demonstrates an understanding of industry structure and isolating mechanisms.


Make a simple Power Point with bullet points.

The speaker notes should last for about 10 min and should contain the following content / information:

Per the HBS Case Study about McDonalds Corporation and Porter’s article “What is Strategy”, explain how McDonald’s is positioned to compete against its rivals: Cost or benefit leader? Broad or narrow focus? Describe the distinctive resources and capabilities that McDonald’s has; and how those capabilities are leveraged to fit its strategic position.

Discuss whether McDonald’s can sustain its competitive advantage. Which of the isolating mechanisms (i.e., impediments to imitation or early-mover advantages) will be key to its long-run profitability? Apply ideas, definitions from Porter’s article “What is Strategy?” as well as the ch.9 and 11 from the attached book and PowerPoints (which are “complimentary” to the book’s chapters 9 and 11). Use economics definitions in your analysis, apply AS MUCH AS POSSIBLE.

Things to think about: discuss, what kind of market structure McDonald’s is? Is the demand elastic? What is McDonald’s strategy? Are they lower cost, differentiated, or focus leader? How so? Margin strategy? Shared strategy? How so? Do they have competitive advantage?

Even though, there’re no barriers to entry (in monopoly or monopolistic competition), you can’t make an economics profit in the long-run. But as for isolating mechanisms, what can help? How the firm is positioning itself that allows them to create a greater economic value?

Do you anticipate that the firm will earn profits in the short-run vs. long-run? What are the isolating mechanisms that might help to sustain the profits in the LR? What are the potentially unique things about this firm that might help to do that?

Please, refer ONLY to the attached book, skim through these chapters to get the main ideas, definitions to apply in your economics analysis: ch.9 and ch.11. Don’t forget the Porter’s article!!

A) Make sure speaker notes have:

*Firm’s position is clearly stated and demonstrates an understanding of Porter’s generic strategies and broad versus narrow focus.

B) Make sure, the analysis (PPT speaker notes) (are):

*Comprehensive, thoughtful, and detailed analysis of the firm’s strategic position including how the firm’s activities lower cost or increase willingness to pay

*Offer deep insights about how the firm’s resources and capabilities are leveraged to fit the firm’s strategy

*Offer insights about strategic fit among the firm’s activities

*Describe how the firm’s pricing strategy (e.g., margin or share) fits its position and demand elasticity *Discuss the firm’s ability to sustain LR profits that demonstrates an understanding of industry structure and isolating mechanisms.

C) Assess whether the firm’s strategy is producing satisfactory results and determine the reasons for success or failure. Characterize the nature and strength of the competitive forces confronting the company. Decide whether and why the firm’s competitive position is getting stronger or weaker. Use the tools and concepts you have learned to perform whatever analysis and evaluation is appropriate.


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