03-05-2013 BUS 500F
Students: Chloe – question 1,4, and 6
Elva – question 3,5 and 7
Emily – question 2 and 8
Question 1. How do you account for the reluctance of competitors to imitate the successful efforts of another firm in their industry? Under what circumstances is imitation likely to be embraced?
There is much reluctance of competitors to imitate the successful efforts of another firm in their industry. And the only way to be successful by imitating is to beyond the original one. This idea can be proved by the example of McDonald’s and Wendy’s. McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald. McDonald’s primarily sells hamburgers, cheeseburgers, chicken, French fries, breakfast items, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies and fruit. (Wikipedia, 2013) Wendy’s is an international fast food chain restaurant founded by Dave Thomas on November 15, 1969, in Columbus, Ohio, United States. As of March 2010, Wendy’s was the world’s third largest hamburger fast food chain with approximately 6,650 locations, following McDonald’s 31,000+ locations and Burger King for the first time in the company’s history. Wendy’s menu consists primarily of hamburgers, chicken sandwiches, French fries and beverages, including the Frosty, a form of soft serve ice cream mixed with frozen starches. Before late 2011 and as of late 2012, the company no longer has a signature sandwich, such as the Big Mac or the Whopper. Instead, the square burger patties are their signature items. In the industry of fast food, while Wendy’s provides almost the same product with McDonald’s, they share the market together. So it is a successful example of imitation of McDonald’s. For example, a national taste test, consumers said Wendy’s fries taste better than McDonald’s. When asked which they thought taste better after sampling both, 56% of participants chose Wendy’s Natural-Cut Fries with Sea Salt. Only 39% preferred the taste of McDonald’s. Wendy’s provides better product than McDonald’s, this is one of the reasons that Wendy’s imitated McDonald’s and still exist in the market. On the other hand, in McDonald’s case, they are almost the generic brand for fast food and hamburgers; so all efforts of competition to promote hamburgers also help McDonald’s.
Question 2. To date McDonald’s has shunned diversification into unrelated food operations as well as nonfood options. Discuss the desirability of such diversification efforts. I think there is no desirability in their case. They focus on their core business. McDonald’s has avoided diversification into unrelated food retailing operations as well as non-food options cause of different things. The image of McDonald in consumer’s minds is related to food and especially fast food, maybe McDonald didn’t have the skills to manage new products unrelated to food and to finish it’s easier for McDonald to focus their business. It still remains uniquely undiversified. The foundation for the success had always been the most rigid standards and controls to be found anywhere. McDonald’s insisted these be adhered to by all outlets, company- owned as well as franchised, and therein was an enduring marketing strategy. McDonald’s had grown continuously and substantially. In all this time, the product was essentially the hamburger in its various trappings and accompaniments. Almost all other firms in their quest for growth have diversified. Even the hamburger began to fall short in providing continued strong growth as the international market reached saturation and the domestic market...
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