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Evaluation of MacDonald's Strategy

Updated on June 13, 2014

EVALUATING MCDONALD’S STRATEGY

In 2008, most organizations around the world were having a hard time in performance. McDonald’s was one of the few firms that were interestingly doing fine at this time. For instance, its revenue increased to $23.5 billion in 2008 compared to $22.7 realized in the previous year. The company, whose headquarter is in Oak Brook, realized an almost double net income from 2.4 billion dollars to 4.3 billion dollars, an impressive achievement. In fact, the company was rated by fortune magazine in 2009 as the 16th most admired companies globally.

One of the most effective strategies that helped Macdonald excel above others during this time is its low prices and expanded menu, which caters for its diverse customers (David, 2012). In marketing, low price strategy is effective in stimulating demand and acquire market share. This explains to the reason why McDonald had a large market base, despite a bad economical situation at this time. Low price strategy makes the most economical sense on the part of the seller especially in the case of the notable economies of scale that can be realized from high volume production. It is also important in a situation when the buyers are sensitive to price and when the seller has no significant competitive advantages.

MacDold’s diversification of food items in its menu was also an important factor for its success. This is because they made sure that those customers with different preferences and tastes are satisfied and enjoy their experience in this restaurant. Indeed for global restaurants to flourish, they are expected to view the purpose of their menu in a comprehensive and broad role. The type of menu produced by a certain restaurant may be in itself, a marketing tool, communication tool, and cost control tool. In addition, treatment of customers is an important factor for its success.

Main Competitor

Starbucks

Starbucks, which is the major rival of MacDonald, is also among the biggest Global restaurant companies based in Ottawa, Canada. This company was established in 2004. Since its opening, the cafe has been serving hot and cold beverages, snacks, full leave tea, instant coffees as well as pastries. However, in July 2012, the head company headquarters announced its interests in opening more cafes in funeral homes. The company calls this fourth generation business, where mourners will be offered with food, fireplaces as well as free Wi-Fi. This move was expected to elicit varied reactions from Canadian and more other people globally due to their negative perception of seeking money from mourners. This is based on the assumption that most Canadians as well as more other people do not like working, coming close to, or associating with those involved with funeral homes due to its emotional component effects. If working is a problem, then eating at funeral homes might present a problem too. This aspect has presented challenges to the corporation even when their locations are not in the funeral places. This presents an advantage to MacDonald, which are not associated with the funeral homes.

Other elements that will make MacDonald to prosper against Starbacks is its current strategy of improving the menu at all its locations, remodeling dining rooms, addition of more snacks and extending operation hours to become a twenty four hour business. These and many more strategies will ultimately help MacDonald outdo Starbacks in revenue and performance aspects.


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