McDonald’s product positioning is aligned around the company’s customer experience. The company’s global operations center on a strategy known as the “Plan to Win Strategy”. This strategy focuses on an exceptional customer experience that comprises of people, products, location, price, and promotion. At the core of McDonald’s operations, is the commitment to continually improve as well as enhance their customers’ experiences. The product positioning at McDonald’s is therefore first in their corporate strategy. This is because by focusing on superior customer experiences, the company endeavors to continually improve food quality as well as service, which is the core of their food positioning. From what they refer to as the core of what they do, customer experience comes first. Inside the customer experience commitment, is their vow to demonstrate clientele appreciation by providing them with high quality food and service.
Further, their product positioning is confirmed by their business model. In the McDonald’s business model, there is a “three-legged stool” system comprising of owners/operators, suppliers and McDonald’s employees. This, as they say, is the company’s foundation. Therefore, every effort is made in ensuring that the interests of the three pillars are fulfilled. Focusing on their customers first enables the company to also consider evaluating their products in order to be viable even in the long term. Without customers, the business would not be in existence; on the other hand, without products, they would not have the current clientele base as they have got to-date. Therefore, their product positioning seems to make sense, considering their corporate strategy of anticipating and responding to dynamic customer, employee, and system needs.
Carefully analyzing McDonald’s product positioning strategy, one finds a potential weakness in the positioning. Despite their strong McDonald’s system that comprises the “three-legged stool” structure, their focus seems to be more on profitability rather than on superior product positioning. By concentrating on owners/operators, suppliers, and employees, McDonald’s seems to be endeared to profits, neglecting their basic foundation of what they offer to their customers. No wonder the company’s innovation and constant evolution resides mostly in their systems and employees, and rarely in their products. There exists a great difference in offering quality food to customers and providing innovative products that respond to differences in customers’ tastes and preferences. What McDonald’s does is the former and not the latter. This forms the basis of what could be a potential and detrimental weakness in product positioning.
An EPS/EBIT chart is an effective tool when it comes to strategy implementation in an organization. For success to be achieved in strategy implementation there is always a need to raise additional capital. Apart from the net profits that a company makes or the sale of its assets, there are two major sources of additional capital, namely: debt and equity. When using the EPS/EBIT analysis chart, timing of stock prices movements, bond prices, and interest rates is very significant. An EPS/EBIT chart is mostly used to predict or analyze what form of financing additional capital should be considered. This is because the chart considers all forms of factors necessary for raising capital. Such factors include: bond prices, interest rates, outstanding (or issued shares), earning per share value, stock price and its movements, and the company’s earnings. For instance, an EPS/EBIT chart would indicate debt as the most suitable alternative to raising capital in times of turbulences in the company’s stock prices. On the other hand, in cases of high-interest rates (cost of capital), outstanding capital (or stock issuances) emerges as the best and most attractive strategy for raising capital. An EPS/EBIT chart will therefore offer a more predictive rather than retrospective angle of view. It helps a company make present as well as future strategies based on prior information.
References
Dixon, M., Freeman, K., and Toman, N. (2010). “Stop Trying to Delight Your Customers.” Harvard Business Review, 116-123.
