F.4 Economics Project The McDonalds McDonalds Restaurants (Hong Kong) Limited

History/development of Hong Kong McDonalds Restaurants McDonalds Restaurants (Hong Kong) Limited Established in 1975 First Hong Kong McDonalds: Paterson Street, Causeway Bay In HK, there are over 200 McDonalds restaurants. Horizontal Expansion has taken place!

History/development of Hong Kong McDonalds Restaurants The FIRST restaurant group to adopt a total SMOKE-FREE POLICY The Hamburger University Hong Kong (HUHK), was opened in Vertical Backward Expansion has taken place!

History/development of Hong Kong McDonalds Restaurants McCafe is also opened in Hong Kong recently. Lateral Expansion has taken place! 35 McCafes

Form of Business Ownership McDonalds Corporation Private Limited Company McDonalds Restaurants (Hong Kong) Limited Public Limited Company

McDonalds Corporation Company Operated Conventional Franchise Joint Venture Development License APMEA (Asia/Pacific, Middle East and Africa) McDonalds Restaurants (Hong Kong) Limited McDonalds Restaurants McCafe Company Structure

Products/Services produced What to produce? Food Service Industry

McDonalds Unique Food Coffees French FriesApple Pie Salads Big Mac McFlurry

Factors of Production How to produce? Entrepreneur Land

Factors of Production How to produce? Labour

Factors of Production How to produce? Capital

Target Customers For whom to produce? People in all ages Mainly children and teenagers

Demand and Supply Relationship Inelastic demand Ed<1 Price increases %change in P > %change in Qd Gain > loss TR increases. 0 P Q D1 P2 P1 Q1Q2 GAIN LOSS McDonalds Restaurants

Competitive Environment of the Industry Oligopoly McDonaldsKFC There are a few major sellers provide a large share of the market output (fast food) in Hong Kong, for example:

SWOT Analysis Has its signature products Gives people a sense of belonging Has built up its brand name Takes up a large market share of the fast food industry Strength~

SWOT Analysis Focuses only on teenagers and kids Has not done enough to bring in the fitness market Produces mainly fried and heavy-flavoured food Not many different types of healthy food Weakness~

SWOT Analysis Put more effort in producing healthy food Bring in the fitness market Increase its exposure and promote more about its healthy image to the public Try to sponsor more activities for the elderly, they will be more willing to have their meals here Opportunities~

SWOT Analysis Growing influence of the KFC cannot be underestimated. The slogan is So Real! Delivery service provided, which starts earlier than that of the McDonalds New food is also created Threats~

Suggestions to Increase Profits Produce more spicy food Produce more healthy (less oil) food to open up the fitness market

Suggestions to Increase Profits 0 P Q D1 S1 D2 P1 P2 Q1Q2 McDonalds Food Demand increases Price increases (P1 P2) Qt increases (Q1 Q2) TR increases

Suggestions to Increase Profits Producing more toys for customers when buying food All McDonalds in Hong Kong provides free-delivery service Enabling the wireless internet access

Suggestions to Increase Profits 0 P Q D1 S1 D2 P1 P2 Q1Q2 McDonalds Food Demand increases Price increases (P1 P2) Qt increases (Q1 Q2) TR increases

Suggestions to Increase Profits Open more McCafes 0 P Q Fig.5 McCafe S1 S2 D1 P1 P2 Q1 Q2 GAIN LOSS

Suggestions to Increase Profits 0 P Q D1 S1 P1 P2 Q1Q2 McDonalds Restaurants opened for 24 hours More McDonalds Restaurants operated in 24 hours S2 Elastic Demand Supply increases Price decreases (P1 P2) Qt increases (Q1 Q2) %change in Qd > %change in Price. TR increases LOSS GAIN

Main Sources

Member List Chan Oi Lam Kwong Chung Yan Kwok Wing Yee Lai Wing Sum

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