Monday, November 3, 2014

McDonald's


McDonald's is one of the leading firms that are operating in the fast food industry and serving around 68 million customers daily in 119 countries across 35,000 outlets. It has been successful because of its low price. It has offered nutritional value while raising awareness about health. Additionally, it has expanded into different markets through the use of innovative and creative strategies. The key strategy of McDonald's is to provide very nutritious healthy food in a highly affordable price while maintain its service and the adequate standards of hygiene and safety.
McDonald's give their customers hamburgers, cheeseburgers, chicken, french fries, breakfast items, milkshakes and deserts. In respect to changing customer change they have expanded their menu to have salad, fish wraps, smoothies, fruits and seasoned fries.




McDonald’s is sometimes referred to “McDonalization” of society because of their immense participation in globalization. The Economist newspaper uses the “Big Mac Index”. The cost of Big Mac is used as a scale to compare the purchasing power parity of different country’s currencies. McDonald’s aggressive business strategy is based upon the premise that its restaurants should be located at strategic locations and provide cheap, affordable but very healthy food- maintaining quality and service.

McDonald's has a policy of low prices and volume, which are the major elements of its competitive advantage. To deliver all meals daily, prices must be affordable. We don't go to McDonald's like we go into a classic restaurant. McDonald's goal is to attract consumers and turn them to the most regular ones; hence they do not propose menus at high prices. Product prices are not identical in all countries and within countries there are also different prices depending on the location. So they vary according to local competition and promotions. They have gained a good number of competitive advantages which make to hold their position in the industry.



Cost:

The biggest competitive advantage for McDonald’s is cost. They buy their supply in bulks which allows them to get lower prices. They also lease land and property they own to franchise. They are the cost leaders in the market and offer their food at prices that cannot be matched by the competitors.



Differentiation:


The best thing about McDonald's is that they does not believe in opening its restaurant without any knowledge of local culture and tastes. Their taste, price and promotions are not similar everywhere. These are varied from place to place based on culture. For example the McAloo tikki is available only in India as the people here don’t have meat and prefer vegetarian food. 




Customer Service and speedy deliver:

McDonald's has one of the best customer services in a food chain network. They interact profusely with their customers and note down their feedback by heart. Their CEO Thompson has acknowledged that his company is sending executive representatives in for a “factory service reset” which could possibly include more workers being assigned to new innovative tasks to existing ones. The company is said to be redesigning its European Kitchens for faster food assembly. Another big competitive advantage of McDonald’s is their speedy delivery. All the employees follow a standard way of cooking and the processes of cooking food are simple. The perfect training ensures the speedy delivery of McDonald’s.



Brand Image:

McDonald's brand image has been a great competitive advantage for them. McDonald’s enjoy a great form of customer captivity emanating from their brand image. The name McDonald’s has become so common and popular and Ronald McDonald's is such a well known mascot that people of all ages know about this brand. They can afford to do lesser advertisement than the competitors just because of such a brand image.



Availability:

The huge number of stores all over the world does provide them a huge advantage. People in the middle of nowhere will still find a McDonald's store. Their availability everywhere and anytime influences people to have their foods. 



References:


http://en.wikipedia.org/wiki/McDonald's 

https://sites.google.com/site/mcdonaldsfranchisestrategy/home/mcdonald-s-competitive-advantage 

http://fagansusanto.wordpress.com/2012/11/22/value-chain-and-competitive-advantage-of-mcdonalds/ 

7 comments:

  1. yes! it was in Japan in 2012... the employees used to put 1-minute sand timer on the customers table after the order was made. :)

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  2. McDonalds is cheaper than KFC ?? is it only in India or everywhere else ??

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    Replies
    1. it is the case for most places i read about (India, U.S, U.K, etc.)

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  3. well constructed although the headlines are too vivid, good work :)

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  4. Great write up Nahid. I hope some people who are willing to bring McDonalds chain to Bangladesh can come across this article, so that they would be inspired to work harder to convince this fastfood king to trust Bangladesh. The only down side: this article really makes me want to go have a burger from McDonalds. Haha.

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