Market and environmental analysis of McDonalds Corp – 2003.
Market and environmental analysis is an essential part of an organization’s External Analysis.
The main objectives of a market analysis are;
a) To determine how attractive a market is.
b) To understand the dynamics of the market and amend strategies accordingly.
Here we apply the dimensions of a Market Analysis to McDonalds corp.
1) Emerging submarkets;
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
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With the rising immigrant population customers now had a choice of items. McDonalds realize this too late and try to counter this effect by introducing new burgers. However, the testing of the new menu does not gauge strongly enough the changing customer preferences and this poor planning led to its failure.
Internally changing trends were also blindsided. Franchisees who were the closest to customers were not included in decision making and were thus disgruntled. Here was the need to change the management style from top-down to bottom-up. This would have solved some of the issues plaguing McDonalds, by providing data on what customers want and what products would have a greater chance of success.
7) Key success Factors
McDonalds did have some strengths or key success factors;
a) Large number of franchises that led to economies of scale. This however contrasted to the ‘small is beautiful’ concept of the niche markets.
b) Complete training for franchisees to begin and run their own McDonalds proved to be a good team building exercise.
c) Cost of food was low due to economies of scale and economies of size. Moreover, McDonalds was able to negotiate a reasonable price for high quality food products.
McDonalds failed to realize the changing trends in the casual fast food markets, as a result of which, a large part of the market share was taken over by existing brands like Wendy’s and new players
The way that Burger King and other fast food restaurant chains do business and markets their products to consumers is due to the change in our society to where the consumer wants the biggest, fastest, and best product they can get for their money. This change in society can be attributed to a process known as McDonaldization. Although McDonaldization can be applied to many other parts of our society, this paper will focus on its impact on Burger King and Taco Bell restaurants. My belief is that the process of McDonaldization has lead our generations toward a more a much more efficient lifestyle, with much less quality. From my observations and studies of these fast food resturants, several themes have become
First, Schlosser and Wilson describe the history of fast food. Everything started with a fifteen-year-old boy named Charlie Nagreen at a county fair squishing a meatball between two slices of bread, creating the hamburger. The authors then go on to talk about how McDonald’s was the first restaurant to introduce a quick system for customers to get their food. After seeing the success of the McDonald brothers, a businessman named Ray Kroc made a deal with them to travel the country, spreading the chain. Later, Ray Kroc would buy McDonald’s from the McDonald brothers. When other restaurants, such as Wendy’s and Burger King, saw the success of McDonald’s, they began to do the same thing, having a chain of identical restaurants across the United States. Not only did restaurants adopt this idea of complete sameness, but so did other companies such as
McDonald’s has been a staple in the restaurant business for as long as most of us can remember. It has achieve around the globe, but not without overcoming a fair amount of challenges in its pursuit of the title “King of Fast Food”.
McDonald’s has been in business since 1955. It has positioned itself in the market as a low-priced, fast food restaurant focusing on hamburgers and other convenience foods. The company is currently faced with competition from Chipotle, a restaurant which offers fast and healthy Mexican food in the fast-casual dining segment. Both restaurants are competing for customer dollars and while they both offer fast convenience there are differences in their food offerings. McDonald’s has always offered a fast, basic meal at a low price. In comparison, Chipotle offers fresh, quality Mexican food fast at a low price. Analyst have suggested that Chipotle would bring an end to the fast food burger chains that have long dominated the industry. McDonald’s must determine if Chipotle is a competitive threat and if so how to address the threat in the market.
REFERENCES•www.mcdonalds.com, accessed on 18 July, 2008•www.mcdonldsindia.net, accessed on 18 July, 2008•en.wikipedia.org/wiki/McDonald's, accessed on 19 July, 2008•http://www.associatedcontent.com/article/263943/mcdonalds_strategic_marketing_mix.html?cat=4, accessed on 19 July, 2008•www.kfc.com, accessed on 25 August, 2008
In the third quarter of 2014 McDonalds had a 30% reduction in earning. Analysis believes that the drop in sales was a result of the mistrust millennials had towards the fast food industry (Jankowska,2015). The change in demand has influenced the fast food industry to developed new menu items and to create new strategies to change the consumers' perception.
In the article “The Franchisees Are Not Lovin’ It,” the authors, Gruley and Patton, discuss the difficulties of the McDonalds franchise, the struggles of the franchisees, and the inability to solve these problems. The article goes on to talk about how McDonalds needs to get back to basics, just as they say themselves. Yet, they continue to make the menu more complex by the constant introduction of new foods. They are getting away from their identity as a burger joint. As a result they are closing restaurants and are continuing to experience declining revenue. McDonalds isn’t what they used to be and something needs to be done to improve the well-being of the company, the franchisees, the employees, and most importantly the customers.
During the start of the McDonald’s company, the McDonald’s Brothers had revolutionized the restaurant business through the idea of self-service. “Imagine — No Carhops — No Waitresses — No Dishwashers — No Bus Boys…,” they’d say (Schlosser 20). As a result of the new Speedee Service System, McDonald’s had never been in better shape. Ray Kroc, amazed by this, expanded the model all across the United States, increasing McDonald’s popularity. Apart from that, the creation of institutions like Hamburger University also solidify the service standards each restaurant should maintain. Hamburger University trained thousands of workers yearly, passing along “a common McDonald’s language” and “a common McDonald’s culture (Schlosser 31).” Through this, Ray Kroc created a single standard in which their service should be executed. This could make up for the lack of employee involvement in the new self-service model. McDonald’s was slowly becoming a beloved family name. The service prompted many families to stop by frequently, which boosted the idea of selling the brand to kids, perfecting McDonald’s marketing tool, and raising overall sales. Ray Kroc was closer to achieving his perfect business
McDonalds changed menu with items such as porridge, smoothies and chicken wraps is on reason for the growing business
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,
When it comes to fast food everybody thinks that you can’t have a healthy meal at the run. With Americans spending over $100 billion dollars a year on fast food, a lot of the companies had to find ways to add healthy meals to their menus. McDonalds founded in May of 1940 serving over 58 million people worldwide on a daily basis. With facing competitors like Subway with healthy meals. McDonalds had to find a way to add healthy meals to their menu to bring in those customers who were going to places like subway.
Many families depended on a quick meal in between parents working, kids going to football, band, and school activities. The solution was going through the McDonalds drive thru because it was cheap and it was everyone’s favorite meal. McDonald’s has “sold over a billion hamburgers” so they have claimed. McDonalds was one of the first fast food chain restaurants in the nation. They mass produced Hamburgers and French Fries for decades selling food at a cheap rate. In the past few years, the “Golden Arches” have lost a lot of customers due to the quality of food, and variety of food.
Despite of providing good quality product people might not be attracted towards the product because McDonald's does not have any past experience in this product. People associate McDonalds with Hamburgers. So this positioning may result in relatively little response in start and it may take more time to grab the market than expected.
McDonald’s is one of the world’s largest chains in the fast food industry. Their strong brand value helps them maintain their leadership position in important markets. The fast food industry is increasingly competitive and could erode McDonald’s market share and reduce profitability.
Therefore, due to McDonalds Corporation’s success in the marketplace, it is essential to conduct both its strategic and positioning analysis with a close consideration of the changes in market mix, efforts, and pricing strategy among