McDonalds enters the hotel marketExternal environmentThe external environment of the hotel industry is very competitive and already well established. Market trends include promotional campaigns for customers using the "more value for money" method. There are several segments of the hotel industry, including: luxury, upscale, mid-market with food and beverage, mid-market without food and beverage, budget, and economy. Each different segment offers certain amenities to appeal to consumers depending on what they are looking for in an overnight stay away from home. As McDonald's looks to enter the hotel industry, it has examined several important issues related to entering this market. McDonald's would like to enter the market in the state of Illinois where the company's headquarters are located. Illinois ranks first among all other states in money spent on tourism, totaling $61.1 million in 2000. Illinois also ranks fourth in the nation for leisure travel in 2000. The hotel industry has several important barriers to entry, including the cost of entry, the ability to differentiate itself from other hotel states, and competition in each hotel segment. Internal Environment McDonald's was founded in 1955 by Ray Kroc and has grown to more than 30,000 restaurants in 121 countries. McDonald's also had $10.1 billion in system-wide sales and $271.9 million in corporate profits on revenue of $3.7 billion in 2001. McDonald's strengths are that it is classified as the ninth most valuable brand in the world, it has management experience, site development expertise, advanced operating systems and a unique global infrastructure. They want to leverage these strengths to break into the hotel industry. McDonald's weaknesses are its inexperience in the hotel sector and the fact that it does not have a clear idea which hotel segment it wants to enter or how to differentiate itself from other hotel chains already present in the sector. segment.Customer Environment McDonald's current customer environment is people on the go or people who don't want to spend a lot while going out and need something quick and good to eat. It is best stated in McDonald's mission statement that they want to be the best quick service restaurant experience in the world. As stated previously, McDonald's has restaurants in 121 countries and has extensive global experience in customer service and satisfaction. McDonald's is excellent at researching an international area before building a restaurant there. For example, in India McDonald's realized that the majority of the population was Hindu and vegetarian, so they didn't even bother to put beef or any other red meat on the menu..