CASE 1: McDonald’s CORPORATION IN THE NEW MILLENNIUM
How are Customer tastes changing in the fast-food industry? What impact do these changes have on McDonald’s?
First, people are trying to eat more and more healthy food. This has an impact on the fast food industry and especially on McDonald’s, the world’s largest chain of hamburger fast food restaurants. As people think about their health, they eat less often at McDonald’s and it as an impact on the sales.
Secondly, people want to eat « fast » food. It means that they want to east as fast as possible. As a consequence, McDonald’s as to adapt its strategy and increase its speed. To deliver food faster, they decided to increase the speed of drive-trough delivery. It’s an important asset for the company. They need to be fast to satisfy its customers.
Then, people eat more and more non-hamburger fast food. Indeed, the sales in these restaurants (for example Pizza Hut and KFC) have grown faster than hamburgers chain in recent years. That’s why; McDonald’s decided to create new meals, with wrap and sandwich, like the fried chicken sandwich.
Finally, a major change in the fast food industry is the increase in the fast-casual segment. Indeed, this sector is growing faster than the quick service sector (from 10 to 15 percent per year, against 2 percent per year). As a consequence, McDonald’s has to create an upscale look to satisfy its customers. That is why it has opened the gourmet coffee shop: the McCafe.
How well are these changes in Customer tastes and preferences being reflected in competitive strategies?
|Name of the brand |Competitive strategies | | |- It earnings has declined. So, to be more competitive: | | | | | |-> Product: products for limited-time, sandwiches (fried chicken sandwich), It put a lot of chicken | | |in its sandwiches. Tasty and nutrition food. Gourmet products (McCafe). | | | | | |-> Promotion: advertising its products and improving its « poor » image to get a positive image | | |(charity Christmas parade), promotional budget spend on game to attract people. | |McDonald’s | | | |-> Place: upscale look (McCafe) => Boost the sale for 15 percent. | | | | | |-> Price: Low prices at the McCafe. For example, the pastries price is from $1.59 to $2.59. | | |To be more competitive: | | | | | |-> Product: healthy food (new salad line) => increase sales and market share. New sandwiches (like | | |chicken whopper) => Stimulate sales growth and overhaul the turnaround. | | | | |...