29th Jnaury, 2014
McDonald’s Business Strategy
Founded in the year 1940, McDonald’s is the world largest restaurant chain which sells hamburgers in around 119 countries. The company is headquartered in United States and serves around 68 Million customers on a daily basis. Although, primarily, company view itself as Franchisor but also operates its stores through affiliation or by itself. The company while operating under eateries industry, serves hamburgers, cheeseburgers, french fries, drinks and many other food items. The company has constantly modified its service menu according to changing consumer taste and now also includes, fish, salads, smoothies and wraps.
McDonalds serves under Eateries and Restaurant industry. The Fast Food Industry became popular in United States during 19th century because of more sub-urbanization and sophistication in the mid-century due to more affluent middle class. The company, however, began in its operations, in California during 1940, but the first ever McDonald’s Franchised restaurant was open in 1955 and was later followed by a legal filing of McDonald’s Trademark in 1961.
As for company’s current competitive position, McDonalds is still the undisputed ruler of Fast Food Restaurant Industry. The company generates 8 times bigger revenue than its nearest competitors i.e, Burger King and Windy’s. However, both the competitors are now selling their restaurants to improve their cash position and operating profit margins. The diminishing growth rate of McDonald’s since 2001 among the Fast Food Restaurant Industry is sign of alarming competitive threat to the company.
In terms of Business Segment, McDonald’s Operates in following geographical business segments:
- US
- Europe
- Asia Pacific, Middle East and Africa(APMEA)
- Canada, Latin America and Corporate
The whole operations of the company are based in these business segments and company still continue to use the process of business segmentation in its operations because of benefits it offers to an organization. Since every customer have a different preference and requirements in terms of visiting a Fast Food Restaurant, thus any marketing strategy which do not recognize the importance of marketing strategy will result in dilution and unsuccessful marketing plans. Thus, to achieve the objective of maximum consumer satisfaction, market segmentation is applied in the business course. Segmentation is the process of splitting customers into different groups and segments, within which customers with similar characteristic have similar preferences and needs. By doing this, each customer is targeted and is approached by the organization with a different marketing mix.
As for Mcdonalds, the company segment their services based on consumer age and consumer beliefs in each country. The whole segmentation process is categorized as Geographical Segmentation, Demographical/Psychographic segmentation and Behavioral Segmentation. Following are the benefits associated with each segmentation practice:
Flexible and Consumer Favorable Menu: Under Geographical Segmentation, the company offered its services based on specific country and do not have any fixed menu offerings. For Instance, in New Zealand, the company offered Kiwi Burger and in Middle East and Central Asia it offered large range of Chicken and Beef.
Services based on Consumer Regional Preferences: Under Demographic Segmentation, markets are divided into groups based on variables like age, gender and nationality, etc. Thus, services are segmented on the basis of age, religion and life cycle. For Instance, in Muslim Countries like ‘Malaysia’, hamburger is called Beef Burger because pork is not allowed under Muslim Dietary Laws.
Directly serving Consumer Needs and Knowledge: Finally under Behavioral Segmentation, the company targets customers on the basis of their needs and knowledge. This is one of the best form of segmenting the customers where consumers are divided on the basis of their needs from the company.
Works Cited
123Helpme.com. McDonald Marketing Case Study . n.d. Web. 29 January 2014.
Mc Donald's Corporation. McDonald's: Company Profile. n.d. Web. 29 January 2014.
Mcdonalds Corporation. Annual Report 2012. Annual Report. California: McDonalds, 2012. Web.
