Although McDonald's (Opening Case) is competing in an unattractive industry, it has improved its performance by focusing on product innovations and by enhancing existing facilities. This improved performance is best explained by

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The resource-based model emphasizes the importance of a firm's internal resources and capabilities in achieving strategic success. McDonald's improved performance can be attributed to its focus on product innovation and facility enhancements, which are internal resources and capabilities that have been leveraged to gain a competitive edge. This is in contrast to the I/O model, which focuses more on external environmental factors as the key drivers of firm performance. Globalization and hypercompetition may also be contributing factors to McDonald's success, but they do not fully explain its improved performance.

Although McDonald's (Opening Case) Is Competing in an Unattractive Industry