Follow the instructions for the Assurance of Learning Exerci

Follow the instructions for the Assurance of Learning Exercise 9A on page 306 of the textbook. Create a minimum two-page APA formatted paper evaluating McDonald’s strategy. Choose at least one of McDonald’s competitors and discuss its position relative to McDonald’s. Comment on McDonald’s prospects of success against this competitor.

Solution

McDonald’s was established in 1940 and is now among largest fast-food outlets in U.S The firm has over 23000 outlets spread all over the world employing more than 400000 employees.

McDonald’s follow the most strategic approach for marinating its leading position and same time expanding its business market in the new emerging markets.

Overview of McDonald’s Strategy

Corporate Strategy: McDonald does basically have main three corporate strategies that are as follows:

Business Strategies: The Company follow the following business strategies:

Major competitors of McDonalds’s: Starbucks

Starbucks is the world’s largest coffee house chain. It is the second highest selling in U.S just after McDonald’s The Company operates with 22,500 stores across the world including 12,800 in the United States. Starbucks serves coffee, espresso, cappuccino, tea, pastries, sandwiches and other foods. They market themselves as high-quality option at a high price point. The company reported fiscal 2014 revenue of $16.4 billion, whereas McDonald’s revenue was $27.44billion .As of September 2015, Starbucks’ market cap was $80.6 billion whereas McDonald’s had market cap of $92.5 billion.

McDonald’s prospects of success against the competitor “Starbucks”

In early 2000s, McDonald’s renovated its corporate image by launching the “Fast and Convenient” campaign which made significant adjustment in the company’s product portfolio according to the emerging trend in food industry.

The McDonald’s supplemented the concept of “fast” and “convenient” into “healthy” and “more natural”. They did it by adding salads, fruits, and carrot sticks to their existing menus. In today McDonald’s is also continually broadening its product portfolio by offering high quality coffee and healthy drinks, giving a strong completion to competing to its major competitor “Starbucks” and other local cafeterias.

They are also gaining benefit franchise business model by sharing risk and reward s associated with new business opportunities, whereas Starbucks have no franchises in any of its store in U.S.