WARREN BUFFET ON McDONALD’S BUSINESS

Would you buy McDonald’s and go away for twenty years? Source: Lecture at the University of Florida Business, October 15th 1998

If people drink five Cokes a day, they probably will drink five of them tomorrow. The fast food business is tougher than that but if you had to pick one hand to have in the fast food business, which is going to be a huge business worldwide, you would pick McDonald’s. I mean it has the strongest position. It doesn’t win taste test with adults. It does very well with children and it does fine with adults, but it is not like it is a clear winner. And it is gotten into the game in recent years of being more price promotional you remember the experiment a year ago or so. It has gotten more dependent on that rather than selling the product by itself. I like the products that stand alone absent price promotion or appeals although you can build a very good business based on that. And McDonald’s is a terrific business. It is not as good a business as Coke. There really hardly are any.

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