McDonald’s Corporation operates and franchises McDonald’s restaurants; the company’s restaurants serve locally sourced food and beverages at different costs in more than one hundred nations. The Australian segment focuses on providing a platform for authentic ingredients, allowing customers to choose their sandwiches. The range of restaurants includes burgers (including Big Macs), sandwiches, fries, desserts, and drinks (Coca-Cola and orange juice). In most countries of the world, the chain’s eateries sell beer, but some McDonald’s restaurants are completely non-alcoholic. In addition, the corporation offers delicious food for visitors and services McCafé, for the convenience of customers in all networks have free access to Wi-Fi (Kee et al., 2021). At the same time, services such as McDelivery, mobile ordering, and payment are available. Thus, it permits drivers to place their orders without leaving the car; also, online payment and ordering service saves time and enables even in a pandemic to enjoy burgers. Another service which the business offers is gift cards, entertainment centers, and balloons for children. This is what makes the chain very popular with children.
Therefore, even from the proposed entertainment inside the restaurant, it is clear that the main target customer of McDonald’s is parents with young children. However, for kids, McDonald’s is also building playgrounds to expand its customer base. In addition to the children’s segment, the chain is very popular with business customers and teenagers. Thus, teenagers can always find their favorite burger on the menu at a relatively affordable price and a place to meet their friends (We are here to feed and foster communities, 2021). The business segment prefers McDonald’s because of its convenience, particularly its convenient location and quick access.
As the food area grows, McDonald’s faces an increasing number of competitors. Burger King is probably McDonald’s most important opponent, as its staple product Whopper challenges the Big Mac. Thus, many customers no longer choose McDonald’s products because of such an alternative. Burger King’s revenues hovered around one and a half billion dollars last year. Additionally, Burger King has more than eighteen thousand locations in different countries. Moreover, Burger King also provides franchises that produce significant profits. Another McDonald’s competitor is Wendy’s; it is a fast-food restaurant chain with about seven thousand establishments worldwide. Wendy’s specializes in burgers, fries, and other traditional American meals like Burger King and MacDonald’s (Kee et al., 2021). Interestingly, in 2020, Wendy’s had a market capitalization of four billion dollars and traded at about eighteen dollars per share. Thus, the corporation is obtaining a reputation in the market very promptly.
It is also worth mentioning such a market giant as Subway. The menu of the organization consists mainly of sandwiches and salads. Another rival of McDonald’s is Chipotle; it is a chain of fast-food restaurants that serves tacos, burritos, and salads. It is essential to remark that this business does not offer a franchise system, making its position worse. The company also has a higher price than competitors in the fast-food industry. Starbucks is the largest coffee shop chain in the world and competes for McCafé. As of 2020, the business had over thirty-two thousand coffee shops in seventy-six countries. Starbucks offers coffee, espresso, cappuccino, tea, cakes, lunches, and other products (Kee et al., 2021). The chain positions itself as a quality option at a high cost; it is the price segment that McCafé prefers more people.
McDonalds Vision and Mission
McDonald’s mission is to implement quick, quality client service with a standard position of products. McDonald’s vision is to be the world’s best quick-service restaurant. Being the best means providing unsurpassed quality, service, cleanliness, and value to make every customer in all restaurants smile. To realize the company’s vision, they focus on three global strategies. McDonald’s must be the best employer for people in every community around the world. Additionally, the company needs to provide a high-quality buyer experience in each of the restaurants. To achieve sustainable, profitable growth by expanding the brand and leveraging the strengths of the McDonald’s system through innovation and technology (We are here to feed and foster communities, 2021). That means McDonald’s restaurants will be the best place for customers to receive fast, friendly service and their favorite fresh and hot foods, where they can have fun. It is at an affordable price, in a clean, pleasant environment.
McDonald’s enhanced a lead position in fast food by focusing on customer service, responding to competition, and applying marketing techniques early in its development. A key factor in McDonald’s success is the strict adherence to standards in operation and the unification of the technology used. McDonald’s produced a detailed manual that made the company’s production look like an assembly line. Executives have always relied on talent on bright personalities and have not gravitated toward intellectuals (Rajawat et al., 2020). They preferred people capable of serious reflection to those who were active, proactive, and hardworking. In order to remain leaders in the marketplace, standards had to be strictly adhered to, but executives let employees sell their services in whatever way they saw fit. The corporation not only maintained an entrepreneurial spirit but also rewarded personal creativity. Thus, these factors enabled the corporation to maintain a leading position in the industry.
Critically, McDonald’s mission can be evaluated because quick service has some negative aspects. For example, the company has many lawsuits concerning poisoning or deterioration of the health of its customers. Thus, without hindering the corporation’s attempts to introduce natural ingredients to the menu at the moment, the food remains unhealthy. At the same time, to introduce the company’s vision, it is presumed that the corporation meets the highest sanitation criteria in the kitchen and the halls. In reality, though, because the staff changes quickly, many employees do not have time to quickly learn the instructions and follow the promised regulations (Rajawat et al., 2020). Additionally, rapid changes in personnel negatively affect the speed and quality of customer service. Moreover, the business is trying to use new technology to serve clients quickly and conveniently. However, the innovations used by Mcdonald’s are already applied by competitors at a better level.
Current strategies
Business practice reveals that every strategy is exclusive and depends on the market position, development dynamics, potential, behavior of competitors, characteristics of the produced goods or provided services, and many other elements. McDonald’s strategic priorities are to ensure sustainable growth, provide quality customer service, maintain rank as an efficient company, develop workers at all levels of the organization, and share expertise across borders (Howse et al., 2018). The continuous improvement of the fast-food concept, encouraging the development of new dishes, innovations in equipment, marketing, service organization, and technology is equally important.
McDonald’s strategies are in line with the mission and values. One of the company’s fundamental principles is to ensure the same level of customer service in every corner of the world. Conformity of products to the same quality standard for the whole system, the high culture of service, cleanliness, and accessibility are concrete forms of implementing this principle (Howse et al., 2018). At the same time, localization, a product strategy that allows the corporation to appeal to the unique food preferences of target markets, is important to McDonald’s.
To ensure continued growth, the company’s strategy also includes developing untapped markets. The plan is to open 1,750 restaurants annually, partly owned and partly franchised, with ninghty percent of those new restaurants expected to open outside the United States. The location must be convenient for customers and profitable for the company. Studies conducted by the organization have shown that 70% of decisions to visit McDonald’s are taken spontaneously, so it was decided to locate restaurants in places where the probability of such a choice is the highest. It is also crucial to introduce new potentially popular dishes quickly and just as fast remove from production those that have not gained popularity, learn from own and others’ mistakes, and switch to the development of new ideas (Howse et al., 2018). It is a radical new element of the strategy, replacing the long-standing practice of thoroughly testing dishes before adding to menus.
Another indispensable part of McDonald’s is its unique merchandising strategy through franchising. Local operators are accountable for managing their own business, but together they serve as a circulation channel to pass quality-controlled goods (Rajawat et al., 2020). A fundamental component of McDonald’s marketing approach is a deliberate endeavor to remain an attractive brand for kids. The grounds behind this strategy boils down to the necessity to promote the fast-food company as a child- and family-friendly establishment.
McDonald’s use various purchasing tactics to remain appealing to kids. For example, they presented Ronald McDonald and other characters to signify their playfulness and kindness. The corporation has also installed lots of playpens in practically all eateries to attract families and make the dining experience kid-friendly. The Happy Meal set also expresses a desire to attract children through a precise product approach. McDonald’s has produced foods for children through this sales promotion tactic and partnered with toy manufacturers or merchandisers to retail both food and playthings.
Recommendations for Improvement
Although the company’s current strategy can be considered effective, it needs improvements to continue occupying a front position in the market. The main weaknesses remain to be safety and health issues. The concept of fast food appeals to many buyers, but at the same time, the high sodium and sugar content of the products leads to unavoidable obstacles. Therefore, McDonald’s should first review its ingredients and varieties of goods and offer healthy alternatives for products that clients have already come to admire (Rajawat et al., 2020). Since the company’s current strategy is family-oriented, the reorientation of the formulation should take place without changing the customer’s tier – balanced meals for the whole family should be a great answer to today’s challenges.
A large share of buyers are children, but recently governments have continued to regulate the nutrition of minors even more strictly, so there is a need to ensure nutritionist recommendations guide the production. If taken Happy Meal as an example and the most popular product, it should contain no more than 650 Kcal. Only ten percent of these calories can come from saturated fat and ten from added sugar. Simple ingredients are how succinctly another goal in this direction can be identified. Menu items included in children’s sets should be free of artificial colors, flavors, and, if possible, preservatives (Rajawat et al., 2020). All changes in the composition of dishes should be made gradually so that they are not obvious for consumers. The process is long enough because it requires revising the goods formulation, and seldom the most influential technology – the product’s taste must be left almost unchanged.
Sustainable development is not so much a story about the evolution of society as it is about the growth of the business to the quality of life and, as a consequence, the financial solvency of consumers. Thus, any company takes on an educational role, especially one as large as McDonald’s. Since environmental issues are now on the agenda, changes in strategy must include these issues. It is important that cardboard and paper packaging will be made from certified raw materials. When harvesting wood, responsible, sustainable forestry practices should always be applied. The second aim of all packaging is to only produce from renewable or recyclable raw materials. A complete switch to packaging made of cardboard or paper will save money and improve habitat. It is also essential to continue to participate in charity events and to donate to environmentally friendly foundations (Thompson, 2020). It can increase audience loyalty, sponsors, and do a good deed.
It can be stated that McDonald’s strategies are well thought out and help win consumers’ affections. However, at the same time, any strategy will be ineffective if no changes are made. It is important to always keep up with the times and offer new ideas that will be interesting and useful. In the context of this company, first of all, the product formulation should be reviewed, and more healthy and tasty alternatives should be offered (Thompson, 2020). It will help promote the brand, and McDonald’s will attract more customers if it can prove that even healthier food can be just as tasty and quick to prepare.
Reference List
Howse, E. et al. (2018) ‘Buying salad is a lot more expensive than going to McDonalds’: young adults’ views about what influences their food choices’, Nutrients, 10(8), pp 994-996.
Kee, D. et al. (2021) ‘Critical success factors in the fast food industry: A case of McDonald’s’, International journal of Tourism and hospitality in Asia Pasific, 4(2), pp. 124–143.
Thompson, A. (2020) Crafting & executing strategy: Concepts and cases. New York: McGraw-Hill Education.
McDonald’s. (2021) We are here to feed and foster communities.
Rajawat, A. et al. (2020) ‘Factors: responsible for McDonald’s performance’, Journal of the Community Development in Asia, 3(2), 11–17.