Treacy: McDonalds had the smallest size meat patty in the industry but
due to chains such as Rallys putting out a .99 cent burger,
others such as Wendys cut prices by introducing "value" menu
items. This past summer McD increased the size of their burger
increasing their costs. Arby has larded up their fries to taste
like the ones Doug finds so tastey from McD. You can look at
franchised fast food as solving an information problem. How do
you get predicticable mediocare food in strange places? Under
the Golden Arches.
[EMAIL PROTECTED] copyrighted
On Thu, 10 Oct 1996, Doug Henwood wrote:
> At 8:45 AM 10/10/96, Gerald Levy wrote:
>
> >In an oligopolistic market, a large
> >amount of money capital per firm is "invested" in product differentiation,
> >especially advertising and marketing. The recent decline in sales at
> >McDonalds can be explained in this context -- not in the context of
> >continuous technical change or increasing labor plus capital (fixed and
> >circulating) costs.
>
> Dropped into my local BK the other day for lunch and was shocked to see
> Whoppers selling for $0.99. (Remember this is Manhattan, where fast food
> prices are about 40% higher than in the Real America.)
>
> Is price competition coming to fast food? And if so, what does that say
> about theories of oligpolistic competition?
>
> Doug
>
> --
>
> Doug Henwood
> Left Business Observer
> 250 W 85 St
> New York NY 10024-3217
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>
>
>
