McDonald's - Competitor Analysis

McDonalds, Burger King and Wendy’s are well-known fast food restaurants, also known as Quick Service Restaurants (QSR) they have all been in business for over 50 years. The following is a snippet from QSR magazine’s August 2013 special report on the QSR top 50 Burger Segment.

The McDonalds Corporation has to be continually aware of its consumer behavior, their eating habits, as well as the situation and the trends in the market in order to understand if there is a need of any changes in their marketing strategy. Any important modifications in the marketing activities of the company have to be backed up by legitimate research. The introduction of new products, decisions on whether to invest more in certain channels of distribution, change of features of the product, advertising or pricing strategies have to be backed up by evidence based on the results of continuous marketing research. In the case of a big corporation like McDonald’s, the marketing research reports should answer lots of consumer

I, Tayneata M. Starr, decided to discuss McDonald’s for this strategy report. McDonald’s began in the 1940’s as a “mom & pop” bar-b-que diner in San Bernardino, California by Dick and Mac McDonald (“McDonald’s History,” n.d.). In December of 1948, McDonald’s was rebranded as a self-serve drive-in restaurant (“McDonald’s History,” n.d.). The original menu was comprised of nine items, with the staple product being the “15-cent hamburger” (“McDonald’s History,” n.d.). Today, McDonald’s is a publicly traded organization that operates in the United States, Europe, Asia, Africa, Canada, and Latin America (“MCD Profile,” n.d.). As of December 2015, McDonald’s has 36, 525 restaurants in operation, offering products such as soft drinks, hamburgers,

Fast food restaurants are one of the most stable industries in the world today. Eateries of this order offer a cheap and convenient alternative to traditional dining. There are many very popular fast food franchises. Perhaps the two most popular of these are McDonald's and Burger King. These titans of the industry have targeted the same demographic over the course of several decades, sparking heated debate among friends as to which of the two is superior. In many ways they are the same, but there are also differences.

McDonald’s is the biggest chain of fast food restaurants in the world. In 2015, company has 36,525 outlets worldwide in 119 countries (MCD Annual Report

There are few business firms anywhere in the world that have been able to sustain the level of growth of McDonalds. McDonalds began by selling only hamburgers and has expanded its menu as well as its franchises on a global platform. According to Robert Hartley, McDonalds Corporation faced a decline. McDonalds Struggled to grow as a result of constantly opening new stores, the acquisition of other fast-food franchises and a few discrepancies in the McDonalds menu. (Hartley, 2014, p.75). But as I conducted further research, I have come to the understanding that the issues, which plagued McDonalds was not entirely, company wide. While McDonalds was able to thrive internationally with a few minor setbacks, their issues were with the United States market.

Based on strength in SWOT analysis, Burger King has greatest new item. Compare to the McDonald, they only upgrade their menu with the same product. In India we create new item such as we offer vegetarian and non-vegetarian burger and chapatti wrap. This is because, during the religious occasion in India which is a kind of festival, they usually do not consume non-vegetarian product and even during a fast period. However in McDonald they don’t change their menu or add new item.

Strategies within the QSR It is no accident that McDonald’s has been around since 1954. Everything decision that is made is deliberate and thoughtful. With that being said, not all decisions have turned out the way McDonalds’s had hoped. That is why it is important for them to have a competitive strategy to guide their decision-making process. Not all businesses use the same competitive strategies, however, the goal is all the same: to gain a competitive advantage and increase profits. When McDonald brothers revamped their first restaurant in 1948, they initiated their use of the competitive strategy of “best-cost provider”. The interesting part about McDonald’s is that even though they have made a countless number of changes to its menu, slogan, and appearance to their buildings; they continue to lead the QSR industry using the same strategy. Their strategy is a combination of an overall low-cost provider as well as broad differentiation (Bethel University, 2017). McDonald’s uses the buying power of ordering supplies for their massive network of nearly 37,000 locations to keep supply chain management low. Furthermore, by hiring minimum wage workers and implementing new technologies as they arise, McDonald’s is able to lower distribution and operations costs as well. The second strategy of broad differentiation is accomplished by offering multiple options at its restaurants. Instead of settling for a limited consumer base of people that want a fast hamburger, with a nine

McDonalds failed to recognize the changing trend in customer’s preferences to better tasting, fresher food. This trend led to new sub markets emerging for tastier, fresher and fast food perceived as healthier. A few of the smaller/privately owned competitors (Cosi and Quizno’s) were able to operate in niche markets

• It took McDonald’s a while to catch onto the healthy trend, but as people get more concerned with their health. McDonalds have to figure out new ways of making their products healthier.

The industry that McDonalds Corp. operates within is the food industry, and to be more specific, the fast-food industry. For the most part, McDonalds has dominated all other fast food corporations since it’s existence. The fast food industry alone is said to have a 2.5% growth rate for the next couple years ahead. Companies operating within this industry focus on taste, price, and quality, respectively. This is why despite the bad quality hamburgers, people continue to come back for more because they enjoy the taste for an extremely affordable price. It is an explosive industry and has become more and more responsive over the years to changing consumer taste and preferences.

Techniques are essential for all organizations, irregardless of the items or administrations that they offer. Through vital administration and operations, organizations have the capacity to incorporate new and powerful method for maintaining their separate organizations. These systems results to expanded benefit or deals, stable business position and more noteworthy levels of client unwariness. In the fast food industry, certain business methodologies are likewise being created and connected in order to accomplish comparable impacts. In this report, the effect of some business methodologies in genuine organizations will be broke down.

More than 75% of McDonald's restaurants worldwide are owned and operated by independent local men and women (McD Annual Report, 09). Most “standalone” McDonald's restaurants offer both counter service and drive-through service. They have both indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or "McDrive" as it is known in many countries, often has separate stations for placing, paying for, and picking up orders.

On the other hand, buyers were more increasingly focusing on value and healthy foods. This condition can force McDonald and its competitor to offer product innovation that can attract the buyers and match with the buyers' requirements.

The most challenging obstacle, in a country like India, would be the religion. In this country most people are Hindu, and they do not eat beef. Therefore, being the beef burger the main product on BK’s menu its future in this country can be uncertain. But, India’s large population is very attractive and BK can then engage in acculturation and modify