mcdonalds case study v1.3 201110

Marketing Management (GSM 5200)

McDonald’s Case Study

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A Case Study of McDonald’s Corporations: SWOT Analysis &

Business Strategies

PREPARED FOR:

(Professor Dr Khalifah Othman)

GROUP 3

Chan Shi Yun GM 04045

Hemamalini GM 04071

Navena Thambirajah GM 04036

Wong Siew Yen GM 04232

Zarizi Ismail GM 04054


A Case Study of McDonald’s Corporations: SWOT Analysis &

Business Strategies

PREPARED FOR:

(Professor Dr Khalifah Othman)

GROUP 3

Chan Shi Yun GM 04045

Hemamalini GM 04071

Navena Thambirajah GM 04036

Wong Siew Yen GM 04232

Zarizi Ismail GM 04054



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Table of Contents

1. Company Background..............................................................................................................3

1.1. The Brand..........................................................................................................................3

1.2. McDonald’s Corporation: A Brief History.......................................................................3

1.3. McDonald’s Growth.........................................................................................................4

2. Situational Analysis (SWOT Approach)..................................................................................5

2.1. Strengths............................................................................................................................5

2.2. Weaknesses.......................................................................................................................6

2.3. Opportunities.....................................................................................................................7

2.4. Threats...............................................................................................................................7

3. Problem Statement...................................................................................................................8

4. Solutions to Case Study Questions & Recommendations........................................................9



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1. Company Background

1.1. The Brand

McDonald’s Corporation is the world's largest chain of hamburger fast food restaurants,

serving more than 58 million customers daily. In addition to its signature restaurant chain,

McDonald’s Corporation held a minority interest in Prêt A Manger until 2008 was a major

investor in the Chipotle Mexican Grill until 2006 and owned the restaurant chain Boston Market

until 2007. A McDonald’s restaurant is operated by either through a franchisee, an affiliate,

or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid

by the franchisees, as well as sales in company-operated restaurants. McDonald’s revenues grew

27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to

$3.9 billion.

McDonald’s primarily sells hamburgers, cheeseburgers, chicken products, french fries,

breakfast items, soft drinks, shakes, and desserts. In response to obesity trends in Western

nations and in the face of criticism over the healthiness of its products, the company has

modified its menu to include alternatives considered healthier such as salads, wraps and fruit.

1.2. McDonald’s Corporation: A Brief HistoryIn the late 1940’s, Dick and Mac McDonald’s were searching for a way to improve their little

drive-in restaurant business in San Bernardino, California. Rather than tinker with the business,

which was bringing in a very comfortable $200,000 yearly, they invented an entirely new

concept based upon speedy service, low prices, and big volume. They ditched their 25-item

barbecue menu in favor of a limited menu of just nine items: hamburger, cheeseburger, three

soft-drink flavors, milk, coffee, potato chips, and pie, with french fries and milkshakes added

soon after they resumed operations. They re-engineered their stainless steel kitchen for mass

production and speed with assembly-line procedures. And they slashed the price of their

hamburger from a competitive 30 cents to just 15 cents. When the new McDonald’s re-opened in

http://en.wikipedia.org/wiki/Wrap_(food)

http://en.wikipedia.org/wiki/Salad

http://en.wikipedia.org/wiki/Dessert

http://en.wikipedia.org/wiki/Milkshake

http://en.wikipedia.org/wiki/Soft_drink

http://en.wikipedia.org/wiki/Breakfast

http://en.wikipedia.org/wiki/French_fries

http://en.wikipedia.org/wiki/Chicken_(food)

http://en.wikipedia.org/wiki/Cheeseburger

http://en.wikipedia.org/wiki/Hamburger

http://en.wikipedia.org/wiki/Affiliate_(commerce)

http://en.wikipedia.org/wiki/Franchisee

http://en.wikipedia.org/wiki/Boston_Market

http://en.wikipedia.org/wiki/Chipotle_Mexican_Grill

http://en.wikipedia.org/wiki/Pret_A_Manger

http://en.wikipedia.org/wiki/Fast_food_restaurant



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December of 1948, business took a while to build. But it soon became apparent that they had

captured the spirit of post-war America. By the mid-1950s, their little hamburger factory enjoyed

annual revenues of $350,000 – almost double the volume of their previous drive-in business at

the same location. It was not unusual for 150 customers to crowd around the tiny hamburger

stand during peak periods. Word of their success spread quickly, and a cover article on their

operations in American Restaurant Magazine in 1952 prompted as many as 300 inquiries a

month from around the country. Their first franchisee was Neil Fox, and the brothers decided

that his drive-in in Phoenix, Arizona would be the prototype for the chain they envisioned. The

resulting red-and-white tile building with a slanting roof and the “Golden Arches” on the sides

became the model for the first wave of McDonald’s restaurants to hit the country, and an

enduring symbol of the industry.

For as little as a thousand dollars, franchisees would receive the McDonald’s name, a basic

description of their Speedy Service System, and the services of Art Bender, their original

counterman at the new restaurant, for a week or two to get them started. But then, in 1954, a

milkshake machine salesman named Ray Kroc saw the McDonald’s operation first-hand. The

fast food industry was about to take off.

1.3. McDonald’s GrowthMcDonald’s growth in the United States soon became a series of milestones in sales, numbers of

restaurants, numbers of hamburgers served, and in establishing standards of quality, service,

cleanliness and value (QSC&V) previously unknown in the growing fast food restaurant

industry. The first national meeting of franchise owners was held in Hollywood, Florida in 1965,

celebrating the chain’s 10th anniversary with the theme, “The Sky’s the Limit.” It was also in

1965 that McDonald’s became a public company, selling its shares over the counter for $22.50

each – a price that sky-rocketed to $49 within a few weeks.

McDonald’s broke the billion dollar sales mark in 1972 and the stock split for the fifth time,

making 100 shares of the original 1965 stock equal to 1,836 shares. By 1990, our sales had



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grown to $18.7 billion, passing the milestone of 80 billion hamburgers sold. McDonald’s 11,800

restaurants were in 54 countries. And top leadership changed for just the third time in our history

in 1990 – with Fred Turner becoming senior chairman and passing the baton to Mike Quinlan,

who had begun working for McDonald’s in 1963 as a part-time mail clerk. In 1999, Jack M.

Greenberg took over the top job, which was passed to Jim Cantalupo, former Vice Chairman and

President, when Greenberg retired in December of 2002. McDonald’s was the only company in

the Standard & Poor’s 500 to have publicly reported 100 consecutive quarters of year-to-year

combined increases in revenues, income, and earnings per share since 1965. Not surprisingly,

Better Investing magazine ranked McDonald’s as the most popular and widely held common

stock by individuals and investment clubs. Out of respect for local cultures, McDonald’s

restaurants in Arab countries maintain “Halal” menus, which signify compliance with Islamic

laws for food preparation, especially beef. In addition, restaurants in Saudi Arabia do not display

statues or posters of Ronald McDonald’s, since the Islamic father prohibits the display of “idols.”

And the first kosher McDonald’s opened in early 1995 in a suburb of Jerusalem. It does not serve

dairy products, and is closed on Saturdays, the Jewish Sabbath.

The growth of McDonald’s to date – domestically and internationally – has proven the validity

of the first thought through Ray Kroc’s mind when he initially saw McDonald’s in operation:

“This will go anyplace.”

2. Situational Analysis (SWOT Approach)

2.1. StrengthsMcDonald’s is the market leader in fast food franchise with huge customer base around the

world. Approximately 85% of McDonald’s businesses are owned by franchisee operating full

time in more than 23,500 restaurants in 109 countries. One of the main competitive advantages

of McDonald’s is strategic locations; these restaurants have global locations in all major

airports, cities, along the highways, tourist locations and shopping malls. The McDonald’s brand

is the most well known house-hold brand, the golden arches and spokes character (Ronald



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McDonald’s the clown) is most recognizable logo in the globe. McDonald’s marketing has

successfully created a brand image of fast food delivery speed, cleanliness and customer care

in the minds of millions of consumers. Strong and marketable product which comes with

affordable price are able to captivate children and youth society, also the low and mid-range

income community who forms the majority of the consumer power in fast food industry.

Customer knows what to expect when walking into McDonald’s restaurant. Innovation is a key

emphasis for McDonald’s to produce new product and diversifies its business venture to suit to

the changing trends and tastes of people and culture around the globe. McDonald’s is easily

adapted their global restaurants to appeal to cultural indifferences around the world. Its products

are localized to the people’s culture and taste in the country. For example, in Islamic

countries, McDonald’s restaurants maintain “Halal” menu, signify the compliance with Islamic

laws of food preparation. In China, the McDonald’s menu is adapted to local Chinese culture for

which soups and vegetables are included in the all menu.

McDonald’s has good governance of its operating line, following strictly food safety guidelines

to provide nutritional values in the food. There were more than 2000 inspections checks in the

food preparation processes. McDonald’s runs through 72 safety protocol days to ensure food is

maintained in clean and contaminate-free environment. Nutrition information is provided to

customer and it is printed on all packaging including in McDonald’s internet web-sites.

McDonald’s is a community oriented and socially responsible company. The famous Ronald

McDonald’s Houses provides accommodation, food and sibling support for families with

children needing extensive hospital care.

2.2. WeaknessesOver the years, McDonald’s had created successful branding and image in the heart of children

and teenage group. The market segment is too focusing on kids. McDonald’s must start to

change its marketing strategy and expand their business into other segment to remain

competitive. McDonald’s brand is often related to unhealthy food and obesity, such as



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hamburger, french fries. Little has been done by McDonald’s to counter these claims. One of

the fastest growing trends in recent year is organic food. McDonald’s has yet to capitalize on the

trend towards organic food.

Like any other organization in the hospitality industry, McDonald’s is also faced with high

employee turnover rate, which leads to more money spent on recruitment and training.

McDonald’s has problem with fluctuations in operating and net profits which impact its

investor relations. The operating profit has declined 19% from year 2000 (USD3330 mil) to year

2001 (USD2697 mil), net profit was USD 1637 mil in year 2001 compared to USD 1977 mil in

year 2000.

2.3. OpportunitiesThe company has more strengths than its weaknesses. With a good management and product

development, the company will survive all the changes and competition in these day and future.

Health consciousness is the market trend around the globe; McDonald’s can introduce healthy

food such as low calorie combo choice, putting more effort in the R&D on introducing healthy

food and eating habit. McDonald’s can expand its product offering into organic food. These

strategies will allow McDonald’s to ensure their place in top spot above all others. The

management can improve the company fluctuating operating profit with better cost control to

reduce food wastage and better manage its production and frontline offices with lean

management.

McDonald’s can tapped on outsourcing to reduce resources spent on administration and also

food delivery, leverage on off shoring for 24 by 7 customer care hotline and internet online

technology for taking orders. McDonald’s also needs to cope with the fast changing consumer

needs and trends to ensure sustainability and competitive advantages. The marketing and

product R&D will need to work on offering more varieties to entice existing and new

customer base. For example, besides “fast food”, the business can be expanded to offer “fast

beverages” such as coffee varieties, milk tea series. Currently McDonald’s have industrial,

Formica restaurant settings. One of the strategies that McDonald’s can venture into is expanding



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its restaurant varieties to capture different market segments such as business executives, internet

café surfer. Such recent business innovative is Mc Café.

2.4. ThreatsMcDonald’s faces major competition from the fast food industry and hamburger business.

The greatest competitor for McDonald’s is KFC and Burger King. Other competitor in the

franchise and fast food industry are Starbucks, Taco Bell and Wendy’s. McDonald’s is

benchmark for “cradle to crave” marketing by enticing children as young as one year old into

their restaurant with special meals. McDonald’s had faced critics from parent advocate

groups for their marketing practices and ethicality. McDonald’s has been sued multiple times

for “unhealthy food” allegedly with addictive additives contributing to obesity epidemic in the

US. As a leader in the global food service retailing business, McDonald’s needs to strategize on

its business, market, product R&D to minimize and overcome these threats.

3. Problem StatementMcDonald’s Corporation or rather the CEO, Mr. Greenberg realized there was a major problem

arising within their corporation when their earnings declined in the late 1990s till the early

2000s. Their net income not only shrunk to 17%, but also suffered from slow sales growth below

the industry average during that period of time. Although their market share was well above their

competitors such as Burger King and Wendy’s nevertheless there was a slow share growth.

Therefore the question of what caused the Big Mac Attack is raised. It is observed that there was

a growing trend of customers moving to non hamburger meals which is being offered by

indirect competitors such as KFC, Subway (dominating the market with more than 13,200 US

outlets) and Pizza Hut as an alternative choice. Sandwiches and a variety of microwaveable

meals are being offered at supermarkets, convenience stores and even at petrol stations. This

convenience has caused many patrons to switch away from the fast food outlet.

Besides that, there seems to be an increasing trend in fast casual dining which has affected

sales for McDonald’s. Patrons are now more willing to spend extra for the traditional fast serving



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but with a better and classy ambience. Due to this ‘phenomenon’, the growth for fast casual

segments grew from 15 to 20% compared to only 2% growth from fast food chains. Taco Bell

for instance had an outstanding 19% increases in their profit which proves that higher priced

outlets are still in demand.

McDonald’s is also facing a stiff competition among the hamburger eateries such as Wendy’s

and Burger King. These major competitors are catching up fast by recognizing the importance of

drive-through customers. In order to rope in the 65% of sales which is derived from drive-

through delivery, these competitors are enhancing their preparation methods as well as the

facility and speeding up their delivery process. Innovative approaches such as windshield

responders that automatically bill customers are being introduced, to achieve the estimated 10%

efficiency increase in drive-through which brings in an average sale by $54,000. Besides

upgrading the drive-through services, these competitors have also understood the market

preferences and have taken the risk as hamburgers outlets to offer new product lines ranging

from healthy salads to chicken based products prepared in a healthy manner.

Furthermore, the eating trend among the youth and the older generations has undergone

significant changes. Many patrons are becoming more health conscious and tend to be picky in

determining their daily consumptions. This group of people has also expressed their

dissatisfaction on the quality of food which is being served by both McDonald’s and Burger

King. It is an obvious fact that burgers served soaking with fat and oil is bound not only to affect

patron’s health but their conscience as well. Besides health reasons, many Americans’ eating

habits have changed towards the concept of eating out. Recession during that era has taken a

heavy toll on many citizens causing them to be thrifty and have returned to home cooked meal

instead.

Upon analyzing the causes to the problem, it is noted that these problem are vital to be addressed

in order to sustain the life span of McDonald’s. The decline of sales within McDonald’s in USA

can lead to a chain reaction and in the long run and cause declines in the group’s worldwide

annual sales and growth. Once the root cause has been identified, McDonald’s will be able to re-



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strategies and develop new and innovative product line, promotions, facilities and even to

venture into new market segments. In order to re-capture the lost patron segments, the need to

shed the cheap and greasy image with a revamped store design may arise. However the drawback

of this is when additional cost may be incurred in order to compensate the eating trends.

4. Solutions to Case Study Questions & RecommendationsQ1. How are customer's tastes changing? What Impact these changes have on McDonald’s?

The Changes in Customers Tastes

Customer tastes are changing in line with maturing markets and the change of lifestyle. It does

not just affecting McDonald’s alone, but to the entire players in the industry.

The demand for non hamburger fast food had grown faster than ever. Companies like

McDonald’s, Burger Kings , Wendy’s and Hardees’s are losing business to the other fast

food operators that are selling non hamburger type of food like Pizza Hut, KFC, Taco

Bell etc. Trend of eating sandwiches—Subways.

The demand for speedy services at a drive-through section has gone up, prompting huge

investment to by the players in order to retain or grow the section business. Its 65% sales

contributions are too much and to be taken lightly.

People are moving away from “cheap and greasy” image to a fast-casual segment and are

willing to pay more for a more comfortable and nicer surrounding.

The changing of eating habit toward a healthier choice continues to drive customer away

from Fast Food operators. People are getting tired of fast food and are thinking about

their health. People are looking for a better alternative.

There is a growing trend of not dining out and it is supported by an emerging new way of

eating for busy people like a quick self service, straight to microwave solution as

provided by most of supermarket products.



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The Impacts of Changes to McDonald’s

The decline in group annual sales and growth worldwide

Extra cost to compensate the change of taste through product innovation (new products

offerings), better facility (setup and design to improve the restaurant looks and processing

time), promotions (discounted items, replacing old idea of free toys to a new idea, using

stickers), trainings (to increase efficiency and speed) and advertising (paradigm shift).

Venturing into a new market segment such as Gourmet Coffee Shop (Mc Café) in an

attempt to boost sales and generate new business.

Had to step up efforts into Research & Development in order to innovate of nutritious but

tasty foods

Additional cost to educate customer in terms of a healthy diet, myths and facts about

McDonald’s

Q2. How Well These Changes Reflected In the Industry’s Competitive Strategies?

The company realizes the changes and immediately counter act with their own strategies to re-

capture the loss interest in their customer. Many of them, including McDonald’s use the same

methods by:

Expediting product innovations. They have created a series of new offerings to entice the

market and to draw back their customers’ base. Lots of new lines up are introduced

between them; some even came up with special promotional price for a limited period.

These had helped them to remain in the radar and generate interest again.

Advertisement is used to change the perception of the mass. For example, McDonald’s

uses this approach to create a message of a tasty and nutritious foods, friendly folks and

full of fun dining experience. This type of advertisement is a very powerful tool to create



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a new notion of its customer and more often than not, counter weight the changes of taste

among its customer. It will at least create a positive image of the company and its

product. Good enough to buy the interest back.

Special promotions are used by the company to draw the sales revenue. A limited time

offer or specially priced items are introduced to bait customer’s interest. This will help

the business to generate sales and remain competitive in light of change and hefty

competition.

McDonald’s approach in its Corporate Social Responsibility will help them to win

support from its existing customer. The customer will feel that by supporting

McDonald’s, they will be part of this very dedicated and responsible corporate who are

giving back some of its profit to the society. This strategy will harness a loyalty amongst

its customer and the company.

Measures taken to outsource some of its direct segment, indirectly lowering the

operational cost related to every McDonald’s outlet.

Investment undertaken to create an effective assembly line and layout e.g. special kitchen

and ordering point for drive through customers.

Q3. McDonald’s Future with Its Current Strengths and Weaknesses

The company has more strengths than its weaknesses. With a good management and product

development, the company will survive all the changes and competition in these day and

future. What the company needs to do is that they should establish themselves with a healthier

image. They should be having more research and development in order to provide the best

food in terms of taste and benefit. This will ensure their place in the top spot above all others.

McDonald’s also must turn their weaknesses into strengths and further cutting unrelated cost

down. From time to time, they must also introduce more varieties in food and beverage section,

to entice customer and to show a fast response to customer change of needs and trend.



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Q4. Does McDonald’s require Separate Strategies for Its Heavy User?

We do believe that current approach is sufficient to tie the heavy users since they will also be

benefited from any other strategies currently implemented such as promotions and discounts. It’s

their loyalties that bind them with McDonald’s and as long as the quality is there, the price is

correct; the heavy user will not drastically change to others. However, the Management should

closely monitor its rival’s pricing and products so that it will be able to match anything that is

offered.

At the same time, looking at a sizeable drop of percentage on new born baby in most of

developed countries, McDonald’s do need to revise some of their current strategies for future

grow. And with a fast technological modernization, they should seriously consider to go online,

utilizing e-payment services and mobile ordering technology. These will create value for

growth and securing long term plans.

Different strategy should also be implemented to lure healthy food advocates to retain their

interest in McDonald’s. Some products need a redo. This to include a reduction amount of salt,

grill meat rather than fried, less usage of fats and more on vegetable. But with all this changes, it

should retain the original recipes and the traditional way of producing the food in a way not to

lose customer affection towards it.

Some other important strategies that can be incorporated are on a strategic location (consumer

density vs. income level), strategic marketing (free music album), extending product to

include breakfast set (market niche) and an introduction of huge TV screen or other

interactive medium (for entertainment). This could improve the business by having more

customers and lure them to their interest, creating an anosmatic charisma where food and

entertainment is one of the greatest combinations.

Q5. What the CEO Should Do To Grow Sales, Profit and Market Share at McDonald’s?

Strengthening the Brand to Provide a Top Quality Product



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It will help McDonald’s to lead the market by generating higher demands and sales. This can be

achieved when the products underwent improvement in response to the demand it has. For

example, an improved taste of double cheese burger and a new long cut of its french fries. These

are the basic products in which have tremendous increases in term of sales growth after going

through such improvement. In order to grow sales, profit and market share, McDonald’s needs to

identify its potential long run opportunity, riding on its market experience and core

competencies.

Product Convergence

McDonald’s should rampant into product convergence by combining both hamburgers and non

hamburgers products to obtain better market opportunities. McDonald’s can build customer share

by offering a larger variety of goods to existing customers.

Measuring Its Marketing Effectiveness

McDonald’s cannot be complacent with its current market position. It should continuously

market its product effectively and create a positive image in its marketing plan. Promotional and

discounts should enter the market at the right time to maximize the return.

Driving New Product Development Based On Customer Needs

The product needs to be desired and must be set within a correct price range. The product should

have it cycle lifetime and to be review/improved as and when is needed. This will in turn grow

McDonald’s customer base and generate profit.

Gathering Meaningful Customer Insight

The Company must move according to the positive insight provided by the customer. This will

help the company fix its image and products according to the right perspective and demand.

Utilizing New Marketing Technology

Nowadays, a lot of new techniques are invented which are more effective and cheaper. The

Company need to fully utilize this advancement in technology to grow its business and attract

new market while at the same time putting the cost lowest possible. For example, by going



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“online”. Online marketing activities play and increasingly prominent role in building brands and

selling products and services. McDonald’s can use the internet as a powerful information sources

and sales channel, augmenting their geographical reach to inform customers and promote their

businesses and products worldwide. By establishing more websites, McDonald’s can list their

product and services, history, its business philosophy, job opportunities and other information of

interest to visitors. McDonald’s can send advertisement, coupons, samples and information to

customers who have requested them or have given to company permission to send them via

internet. McDonald’s can now assemble information about individual customer’s purchases,

preferences, demographics and profitability.

Choosing Communication Options That Reinforce and Complement Each Other

McDonald’s can selectively employs television, radios, printed advertising, public relations and

events, PR and websites communications, so that each contributes on its own well as to

improving the effectiveness of the others. Each communication must also deliver a consistent

brand image to customers at every brand contact.

Relationship with Its People and Customers

McDonald’s needs to develop deep, enduring relationships with people and organizations that

could directly or indirectly affect the success of the company. The four keys constituents from

relationship marketing that McDonald’s needs to develop are customers, employees, marketing

partners (suppliers) and members of financial community (shareholders, investors and analysts).

McDonald’s should also have the customer retention program.

This is one of the most important tools to create loyalty among its existing customers. Attracting

a new customer may cost five times as much as doing a good enough job to retain and existing

one.

Marketing must skillfully conduct not only customer relationship management (CRM) but

partner relationship management (PRM) as well. Company is depending on their partnering



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arrangements with key suppliers and distributors, thinking of these intermediaries not as

customer but as a partner in delivering value to final customers so everybody benefits.

Cost Control

Every dollar of cost saved is equal to every dollar of profit generated. Cost control is very

important to ensure a correct pricing to its products. Every product with a correct price is a

potential sale to the company. McDonald’s can consider subcontracting or outsourcing those sub

processes which has significant reduction in while retaining the core processes.

Robust Sales Strategies

Good sales strategies can create competitive advantages to McDonald’s. The Company should

plan its sales activities according to specific situation e.g. 24 hour operations to certain outlets,

methods of reaching its clients (customers and franchisee), outline its competitive differences

and indentify available resources. The advantages to these are too compelling to be ignored.

Effective Supply Chain Design And Management

In a race to lower down the cost while maintaining top quality, an effective Supply Chain Design

and Management can create a competitive advantage by enabling to get raw products to reach the

franchisee reliably quicker and cheaper. This will ensure zero abruption to the outlet’s operations

and maximize returns.

Acquisition through Vertical Channel in Every Country

McDonald’s needs to capture a higher percentage of supply chain’s value delivery system, e.g.

engage reliable supplier, supplier who can support JIT (Just In Time) approach to avoid too

much of inventories and affecting company cash flow. If these failed, McDonald’s should

consider moving through vertical acquisition, imitating KFC to seriously control the supply of its

raw material. Whatever items that are locally produced will cost less and acquiring these

suppliers will be a good integration to the company’s needs.

Managing Development



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McDonald’s needs to manage all possible touch points-store layouts, package designs, product

functions, employees training, shipping and logistics methods. To create strong marketing

organization, the McDonald’s marketer must think of executives in other departments, and

executives in other departments must think mere like marketers. Every employee has an impact

on the customer and must see the customer as the source of the company’s prosperity.

Emphasizing on the interdepartmental teamwork to manage core business processes, such as new

product realization, customer acquisition, retention and order fulfillment. McDonald’s also trains

their employees in cross-selling and up-selling.

Think About Its Rival in the Industries

McDonald’s needs to think of effective way to compete with actual and potential rival offering

and substitutes a customer might consider. The customer has choice of opting for other fast food

providers besides McDonald’s e.g. Kings Burger, Wendy’s, Pizza Hut, KFC, etc. McDonald’s

needs to have competitor’s information and understand the competitor’s success factors before

they can provide better marketing strategy plan to compete with the competitors.

Public Image

McDonald’s has to carefully consider their role in the social context especially on obesity and

health issues. McDonald’s can expand their “societal marketing concept” into obesity and health

conscious target markets and deliver the desired satisfaction more effectively and efficiently than

competitors in a way that preserves or enhances the consumer’s and society’s long term well

being. McDonald’s is striving for a “socially responsible supply system” encompassing

everything from healthy fisheries to redesigned packaging. This is an important strategy to boost

McDonald’s public images and to compete in fast food industry.

mcdonalds case study v1.3 201110

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