Strategies of McDonald’s and Starbucks
This paper explores the global strategies of McDonald’s Corporation and Starbucks Corporation. An overview of the company histories is included along with the basic business philosophies. The focus of the paper is on the marketing strategies, both domestic and international, examining the marketing mix for each company. The four P’s of marketing are detailed with examples of how each company uses them to their advantage. The reasons for the successful global expansion of both companies are incorporated into the compiled information.
A Look at the Global Marketing
Strategies of McDonald’s and Starbucks
McDonalds and Starbucks are two domestic companies that are very successful. Both have emerged first as leaders in their respective markets domestically, and because of that success have been able to grow and expanded into countries all over the world. This paper will examine these two companies from a global perspective in order to evaluate their marketing strategies, with a particular emphasis on how successful they have been in foreign markets. The paper will focus on how each company has applied the four P’s of price, product, place and promotion in their marketing mix, detailing how they are used gain an advantage in their respective markets. Finally, the paper will evaluate the success of these organizations in developing niches in their markets as compared to their competition.
The first company examined is McDonald’s Corporation or McDonald’s as the brand name most widely known. McDonald’s operates as a global business and is presently the world’s largest fast-food restaurant chain. According to McDonald’s Corporation 2009 Annual Report, there are more than 32,000 restaurants in 119 countries and it is safe to say that in almost every country you can find a McDonald’s restaurant with its Golden Arches predominately displayed (McDonald’s, 2010).
The first McDonald’s was opened by Dick and Mac McDonald in San Bernardino, California in 1948, and at that time, they never could have imagined what their company would grow to become. The restaurant was a self-serve drive-in that offered nine menu items, the star of which was a 15-cent hamburger. The initial marketing strategy incorporated offering high quality products quickly and at low-cost which is the basis of what McDonald’s offers 60 plus years later. The expansion of McDonald's began when a supplier named Henry Kroc joined McDonald's as the franchising agent and built on the initial success and began a rapid expansion throughout the United States and beyond. Today over 75 percent of McDonald’s restaurants are franchises, which is a key element of the organizational structure. McDonald’s has been able to develop a brand that is easily recognized the world over and is represented by a familiar logo – the Golden Arches. McDonald's brand mission statement is to "be our customers' favorite place and way to eat” (McDonald’s, 2009). The company has grown to become one of the most popular food brand names in the world, with continuous increases in exposure in new markets, such as Asia, Europe and Africa, amongst others. The focus is not so much on being the biggest fast-food restaurant chain; rather it is more focused on being the best fast-food restaurant chain (McDonald’s, 2009). Although McDonalds has been in existence in North America for many decades, the increasing popularity in new markets has positioned them for continued growth in market share and customer buying power. Much of the recent credit is given to McDonald’s worldwide operations have been aligned around a global strategy called the Plan to Win. McDonald’s “strategic alignment behind this plan has created better McDonald’s experiences through the execution of multiple initiatives surrounding the five factors of exceptional customer experiences – people, products, place, price and promotion” (McDonald’s, 2010)....