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Where Large Companies Started to Take Advantage of Smaller Companies

In this society full of oligopolies and monopolistic competitions, McDonald’s has been able to successfully hold its place in the monopolistic structure for over 50 years, meaning they are the only company to sell their own product dominating the market without any substitutes. Their ongoing corporation continues to grow and flourish with additions to their menu such as the McCafé menu, as well as their all day breakfast. Although McDonald's is widely known now, there was a time in history when people had yet to hear its name. In 1948, “The Airdrome,” a food stand, underwent a major transformation, resulting in the creation of McDonald's in San Bernardino, California. Brothers Richard and Maurice McDonald remodeled their father Patrick McDonald's food stand, “The Airdrome,” changing its name and simplifying its menu into a fast food model. As McDonald’s began receiving attention, Ray Kroc, a milkshake machine salesman, was able to take over an equity of McDonald's and create its worldwide monopolistic reputation. One of the many things that differentiates McDonald’s fast food restaurant from others is their branding, allowing people to be influenced by what they advertise, such as their Big Mac, Ronald McDonald, which is a kid-friendly character, and most importantly, their Happy Meal. Although there are restaurants who have a character, such as Wendy's with its red head girl and Burger King with its Crown and King, they can’t compete where they don’t compare. These restaurants constantly fail in beating McDonald's branding tactics. Another thing that differentiates McDonald's from the others is their innovative choices, such as creating never before seen products such as the McGriddle and the Happy Meal, appealing to a lot of their customers and allowing for more exposure of their products.

One of the “competitors” McDonald's faces is Starbucks, which was known to be the second highest-selling US chain behind McDonald's. Although Starbucks was known to come close second behind McDonald's, I believe it is impossible for them take McDonald's place due to the fact that they don't sell half of the other things McDonald's does. They’re best known for their coffee, while McDonald's is well known for their food AS WELL as their coffee, which is something that has more options than just a coffee. Another reason is due to the fact that not everyone drinks coffee. However, everyone does eat, and it can occasionally be a McDonald's sandwich or even a snack wrap. Another competitor, although there are many, is Panera. Although it offers a more nutritious menu with a variety of vegetables and tasty dishes, I believe one of the major things causing it to fall behind McDonald's is the pricing. Yeah, it may be healthier, but it is more expensive, making McDonald's more popular considering the fact that it’s cheaper. Believe it or not, some people choose quantity over quality. Although McDonald's monopolistic actions are shown in the facts, there are also other reasons and characteristics as to why it is a monopoly, beginning with being a single-seller, meaning no other company or corporation sells the products McDonald's does, giving them all of the profit for their products. Another characteristic is being a single homogeneous product with no close substitutes, meaning no other company can sell the same thing McDonald's does as well as meet the standards McDonald's does. Since McDonalds falls under a monopoly, it normally creates its own prices, making it a price maker. It is able to change the supply and price of a good, making it a profit maximizer. It has one seller and producer, making a higher barrier entry to other companies who may try to enter and take control. Lastly, it has absolute product differentiation, making it noticeable to the consumer that their product is one of a kind and cannot be bought anywhere outside of their corporation. McDonald’s monopoly has been able to shape the fast food world and continues doing so.

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