A. Situation Analysis 1. The Company: Strengths Brand recognized across the globe Investment in new restaurants concept and brand extensions Global operations all over the world Menu adapted to almost every culture Leadership in breakfast category Weaknesses Decline in sales and market share domestic market Brand had a stagnant product line Not prepared for attending internal market (mid-90) Lack of success in the introduction in new products Cannibalize sales between franchises Poor technological system
2. The Environment: Competition: Burger king and Wendy’s were direct competitors but Burger King was the main contender. McDonald’s is no different from their competitors: all are fast food chains and provide similar products. However, looking closer, one can recognize that McDonald’s primary target market is children and their parents. They design “Happy Meal” for kids. It includes hamburger, French fries, drink and toys. Burger King has introduced half a dozen new successful products to its menus and they had better food preparation process. In 1997, Burger King designed better pricing strategy (Whopper for 99 cents) than Mc Donald’s. The parents were making purchasing decision most likely based on price.
Social and Cultural: o Busy families dine-out more frequently and parents will often purchase meals for their children without buying meals for themselves o Busy families prefer “restaurant” style outlet vs. fast food style location o People spent money on food consumption outside the home in Mid-90s o International business operates in different cultures, religions, etc. o People rushing to the stores looking for toys and food
Demographics: Families with children and adults in general are spending more money in food out of home (opportunity) Hungry consumers looking for new menu items and food options in fast-food chains Economic: Expanding economy in the 90’s
3. Market Segments: Target Market Demographic Families Mid age...
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