Mc’s Biz

Presented By Haohan Wu

Overview Marketing Strategy of McDonald’s.

There are three important strategies on McDonald’s.

1. To make food fast, there are wide variety menu items, traditional items and health conscious items. All of food is combining with local flavors.

2. Low cost, traditionally, the value pricing as competitive weapon in McDonald’s. Now, offer products at range of price points to attract both price sensitive and health conscious consumers.

3. International expansion, total more than 30,000 stores, 1.7 million employees worldwide. Two operations include company owned and franchise.

Franchise system is the backbone of McDonald’s success.

  1. Distinctive Competency
  2. Allow Quick Expansion
  3. Uniform Operation – Standardization
  4. Same Food Experience

The backbone of McDonald’s success and most of other fast-food chains is its franchise. In other words, one of the many reasons that McDonald’s has been able to expand so quickly and achieve its reputation/brand recognition has been its effective franchising business model. Not only does the business model allow the company to expand quickly both domestically and internationally, the franchise system, having uniform operations, has made the McDonald’s restaurants one of the most standardized in the world. Not only do all McDonald’s seek to offer the same product offerings, they intend to offer the same food experience for all of its customers – no matter what part of the world you are in. Today, McDonalds franchise network is the world’s leading food service retailer, with more than 30,000 franchise restaurants serving 52 million people in more than 100 countries. Of those stores, more than 70 percent are owned by independent operator franchisees.

McDonald’s President Ralph Alvarez

Business Strategies McDonald’s has pursued two strategies since 2003. To keep up with rapidly changing consumer preferences, demographics and spending patterns, McDonald’s has introduced new items (Premium Chicken sandwiches and the Angus Beef Burger) and campaigns to create more healthy foods (Premium Salads). The strategy reflects the philosophy that novelty, as opposed to loyalty to traditional products, is the key determinant of sales in the fast food industry. McDonald’s has also focused on increasing sales at existing restaurants instead of opening new ones. To do so, McDonald’s has remodeled many restaurants, kept stores open longer and increased menu options. Nevertheless, new McDonald’s restaurants are still opening around the world at a rapid rate, and continue to grow its new restaurants at a 1%-2% rate each year. McDonald’s successfully employs a unique type of corporate strategy, transnational strategy, which allows them to compete through standardization while simultaneously adapting to local customs when deemed necessary and appropriate.

Overall, the reason for going international. McDonald’s build more brand and shareholder value, add revenue sources and growth markets, reduce dependence on your home market, leverage existing corporate technology, supply chains, know how and intellectual property, award more franchises in the home country by being global.

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