Overview of the Company

The McDonalds is a US based food chain industry which has a rich history from its establishment in 1954.
The food chain company was put to the market environment by Ray Kroc. With their effective approach,
marketing ideas have been initiated and helped the industry to be considered as one of the most renowned fast
food brands in the global market. The companys trademark design was carefully examined and it came with a
happy clown character which is known as Ronald MacDonald (McDonald, 2008).

It can be said that the Egg Muffin and the Big Mac was among the most innovative products of the food
chain. In line with its marketing strategy, the happy meal idea was also considered to be creative as it attracts
children to eat at the food chain stores because of the toys they can get. In this generation, McDonald is also
appearing on the Internet bandwagon, for promotional and advertising operations (McDonalds Corporation,
2008).

Strategies of McDonald
Mc Donald is one of the famous food chain all throughout the world known by both the child and adult
alike. It has increased its sales despite some issues being raised against the company. To further increase sales
on the business and improve its performance, business strategies are done by person in-charge. It is in this
stage wherein the company would improve what they lack thus making prospective customers to keep on coming
back and ask for more. It is said that McDonald has been able to use various strategies to uplift and sustain their
competitive advantage in the market.
Part of its business strategy is its plan to phase out its Super Size French fries and soft drinks as it tries
to create a healthier image for itself. The Super Size option is to be phased out in an attempt to slim down its
menu amid increasing concerns and issues being raised about obesity (Crouch, 2004). The company is also
planning other menu changes, such as switching to a cinnamon roll and a sausage burrito as its core breakfast
offering, while bagels would become an optional item. The company also has to stop selling its 14 ounce
McDonalds Fruit n Yogurt Parfait and replaced it with a smaller-sized version of the product (Crouch, 2004). All
these changes in the menu are part of its strategy to provide a range of choices that support a balanced lifestyle.
The company has also added that the simplified core menu would be rolled out to its entire restaurant.
Furthermore, using the national rollout of its made for you platform as the opportunity to re-evaluate its
core brand attributes, the company has quietly formed a global brand strategy task force that is looking for long
and hard at the essence of the Golden Arches (Howard, 1999). The group which will be led by new vp-brand
strategy has been meeting for several months and is anticipated to put forward its findings in fresh consumer
messages by mid-2000. The slow-build will allow stores to work through an expected learning curve for the new
cooking system and avert major miscues as it attempts to deliver on the promise of hotter, fresher foods made to
order (Howard, 1999). The group also is evaluating all elements of the brand from menu, service, and restaurant

dcor to brand icons Ronald McDonald. Even though domestic sales have turned to healthy 5% level, the said
company is rethinking how to sustain growth in the face of both national and regional rivals.

In the past, the

companys marketing strategy has been criticized for being short-term focused and there has been no overarching umbrella strategy. With that, the charge is to bring continuity and consistency to the brand strategy piece.
Strategies in other areas of the organization is also made like the three-wheeled vehicle that is used to
collect discarded cups and burger wrappings from the neighbourhood around the restaurant and the provision of
good services to customer which naturally begins and commences with hiring the right kind of people (Livesey,
1999). Staffs are encouraged to smile, be optimistic and treat customers particularly with respect, tell them what
a person wants and follow up on the performance and reward their behavior. The restaurants bathroom is not
spared. Issues are raised on the concerns about the said restaurant to be dirty and unhygienic. Customers want
a clean area especially the bathroom to make they feel comfortable. Strategies like this should also be applied
(Livesey, 1999).
McDonalds has developed three strategies for sustaining the competitive advantage. These are
customer value, convenience, and optimal business operations. Together with the information technology
strategies, it helps the company to create new and innovative ideas for the company. The McDonalds
restaurants are described by the functions of the team as miniature manufacturing facilities. With the McDonalds
objective of improving the suite of its business systems which supports the store, the management of McDonald
has developed ways of using effective marketing and management strategy its overall operations.
In order to adapt with the latest trends of having healthier menus, the company extends their services
for family retreats and as a centre of community for senior citizens. The means for the former one are its
innovation with their products to offer healthier foods. As this trend continues, an extension of more people
-oriented strategies is needed. The company also conducts studies and surveys as part of their business strategy
to better know which among the different alternatives serves the objective of McDonalds the best.
To achieve customer convenience and satisfaction, one of their key initiatives is on the improvement of
the ambience and looks of their stores in the country. The adherence of the company to put WIFI technology in
their stores for instance has also become one of the attractive forces for customers. For the achievement of
customer value, focus of the company remain on real-time information flow which permits instant corrections of
the menu and prices in response to preferences and changing needs of the customers and competitive
environment.

Competitor

: Its unlikely that McDonalds can always be

No.1. In an annual consumer satisfaction survey, McDonalds has been scored

dead last among fast-food restaurants since 1992. In the fourth quarter of 2002,
McDonalds disclosed its first-ever quarterly loss, one reason why McDonalds is
struggling is that the consumers began to switch to its competitors, such as
Burger King, Wendys, and Subway. These companies emphasized on offering
fresher, hotter, high-quality foods at lower price with faster service. On the other
hand, McDonalds decided to close 719 poorly performing restaurants around
world. All of these simply proved that McDonalds might no longer be competitive
in the fast-food market. And if McDonalds cannot adapt external environment
change, they might be gradually diminished and even replaced by other
competitors. In order to keep their market share, increasing sales and profits.
McDonalds has to respond to the threat of competitors. In 2003, McDonalds
offered the McGriddles sandwiches in the US and the Canada feature breakfast.
Meanwhile, McChicken Premiere and a zesty chicken have been introduced in the
UK, France, Italy and Belgium. McDonalds was trying to satisfy customers desire
for premium products at affordable prices. Furthermore, McDonalds is providing
more choice with respond to offer Happy Meal to keep the children. For
example, Happy meal now including chicken selects, and no-sugar add fruit
drink (juice and low-fat drink) and also to produce McDonalds coffee which
appeals to adult. Those products have been made to attract existing customer
and develop new customers.(www.McDonalds) Moreover, in addition to the
innovative menu, McDonalds is also rebuilding and even relocating some of their
restaurants to make the environment more attractive. At the same time,
McDonalds is differentiating itself by creating more relevant experiences such as
allowing the customers to access the Internet with the wireless technology
platform. This innovative way not only attracts the teenagers, but also perfectly
fitting the modern professionals requirements.
Social problem healthy issue With the economic development, peoples
living standards have increased dramatically these years. People are becoming
more concerned about their health issues. It cannot be denied that McDonalds
has attempted to make itself more convenience for the people. However, people
also believe that such kinds of fast food are not good for their health. The world
health organizations report presented that those food not only can cause the
obesity of children, but also is part of the reason of causing cancer. Healthy
issues became the biggest stumbling block to the development of McDonalds.
Customers were switching to healthier offering, such as Subways sandwiches, or
KFCs mashed potato instead of fried potato. McDonalds has responded to this
healthy trend. In order to compete, McDonalds has added salads and other
lighter options into their menu. If a mother comes in, she is not only buy the

happy meal for her children, she will also be likely to buy herself a meal too .the
lighter options also encourage existing customers to come back more often,
because there is a greater variety of choices

SWOT Analysis: Strengths

One of the most significant strengths of McDonalds is its incredibly strong brand identity, which
effectively differentiates the company from all other fast food restaurants around the world. Especially
in Singapore, because of the contrast between cuisine offered by Chinese restaurants and fast-food
outlets, and the food offered by McDonalds. The company is able to deliver interesting new products
and services, including the McCafe which offers a sit-in and drive-thru cafeteria service.
A key strength of McDonalds is the fact that it mixes a uniform product menu at every store, with
localized food options to suit the tastes of the local consumer. In Singapore for example there are a
number of spicy food options available. Just because localized food choices are available does not
mean that each McDonalds location does not retain its own classic sense of place and purpose, and
indeed there are many Singaporeans who think that McDonalds is there to offer something different,
and to connect them with the wider globalised world (Watson, 2000).
McDonalds has high quality customer service, and this is agreed by even Chinas elite class. The
general consumer agrees that McDonalds offers safe and reliable products, a fast service, an
attractive eating environment and helpful, professional and friendly staff. The corporation knows that
this industry is very much a service industry, and they appreciate that the relationship between
customers and staff is important. The recent Ask Me program is a good example showing the
corporations efforts to push the quality of customer services. With this program, McDonalds is able to
understand what the customer wants and further improve their products and services.
Advertisement is another clear strength, and the company has consistently provided strong
promotional and communication tools to gain the audiences interest and reach out to the wider
market. Such advertising, found on television, radio, newspapers, magazines and billboards, offered
catchy slogans such as Feel the Beef.

Advertisements are bolstered in China with key endorsements, such as with the Chinese basketball
player Yao Ming.
McDonalds understands the importance of strategic placement, and is aware of the ways in which to
most effectively target and service target consumers. Outlets are placed in areas of high footfall,
areas that are easily accessible to the consumer and areas that have an optimum demographic. In
Beijing, McDonalds restaurants are often found in business districts, and in Hong Kong there are
restaurants found in busy places such as Quarry Bay and in malls.

SWOT Analysis: Weaknesses

The price of McDonalds is still high when compared to some other local Chinese fast-food
restaurants in China. Furthermore, the price of McDonalds is still much more than many people in
China can afford; there are many working parents who must save up before they can afford to take
their families to McDonalds.
A major ingredient of McDonalds is the cooked beef patty, and according to a study by Watson
(2000), the majority of Chinese adults do not like how they taste. The specialty of McDonalds is the
burger everywhere else in the world, but this specialty does not translate very well in China.

SWOT Analysis: Opportunities

Chinas immense population is one of the most obvious opportunities; the countrys population is over
1.3 billion and all metrics for economic development show an increase. The country offers a prime
opportunity for expansion, and more outlets could be opened with satisfactory market share.
The number of Chinese citizens with expendable incomes is increasing, and incomes are rising with a
growth in the Chinese middle class. This adds to the changing lifestyles of people in China, which is
changing the peoples eating habits and making them more open to Western cuisine and fast good.
Opportunities will increase further as more people embrace Western culture.
With the one-child policy still in place, it is more convenient for parents to take their children to
McDonalds. This convenience is something that could be capitalized on. China has an ageing
population, and this presents opportunities for products such as tea, coffee and confections, and other
types of food and drink that are popularly consumed by middle-aged and elderly citizens.

SWOT Analysis: Threats

McDonalds has enjoyed relatively few threats in recent years, and the only significant threat in China
has been the other fast-food corporation KFC. However, the largest rival of McDonalds worldwide
Burger King entered the Chinese market in 2005 with a new restaurant in Shanghai (AP, 2005).
Since the first opening there has been steady expansion, and much of this expansion puts them in
direct competition with McDonalds, and in many areas both companies are now vying for the market
share. Burger King also has a very strong brand identity, and is likewise known for its innovations and
ideas. McDonalds will need to work harder to counteract the threats caused by their rival global fastfood chain.
McDonalds is an American company that emerged from the American system, and this contrasts with
Chinas status as a communist country. This makes McDonalds occasionally subject to criticisms and

protests from certain factions and groups. A number of criticism have emerged regarding McDonald
employment practices, and this added to the health problems that fast food can cause, may lead to a
negative public image of the company in China.

Strengths
One of the most significant strengths of McDonalds is its incredibly strong brand identity, which effectively
differentiates the company from all other fast food restaurants around the world. Especially in Singapore, because
of the contrast between cuisine offered by Chinese restaurants and fast-food outlets, and the food offered by
McDonalds. The company is able to deliver interesting new products and services, including the McCafe which
offers a sit-in and drive-thru cafeteria service.
A key strength of McDonalds is the fact that it mixes a uniform product menu at every store, with localized
food options to suit the tastes of the local consumer. In Singapore for example there are a number of spicy food
options available. Just because localized food choices are available does not mean that each McDonalds
location does not retain its own classic sense of place and purpose, and indeed there are many Singaporeans
who think that McDonalds is there to offer something different, and to connect them with the wider globalised
world (Watson, 2000).

Watson, James L. (2000) Chinas Big Mac Attack. (Infiltration of American consumerism) Foreign Affairs,
79.3

Weaknesses
McDonalds is very aware of their weakness, for example negative publicity. McDonalds is heavily criticized
for offering unhealthy food to its customers, stimulating obesity and strong marketing on very young children.
This is due to their so called unhealthy food menu. Although McDonalds tries to introduce healthier choices in its
menu, the menu is largely formed of unhealthy meals and drinks. Another weakness is McDonalds high

employee turnover. The employees are pain minimum wage and have a low skilled job, which is often seen
negatively by its employees. This results in lower performance and high employee turnover.

Opportunities
Mcdonalds is growing industry and has many new opportunities ahead of them, for example there is an
increasing demand for healthier food. So while the demand for healthier food increases, McDonalds should
introduce more healthy food choices in its menu and reverse its weakness into strengths. One way they are
trying expand and take these new opportunities is by planning to open an only vegetarian restaurant in
Singapore. They also are look to possibly exploit and opportunity of delivery food to households and increase its
reach to costumer.

Threats
The fast food industry is very popular nowadays, and with their being many different food chains McDonalds
must be aware of the competition. Major competitors, like Burger King, Starbucks, TCC, KFC and any mid-range
sit-down restaurants. McDonalds also need to look at the trend towards healthy eating. Due to the governments
and various organizations attempts to fight obesity people are becoming more conscious of eating healthier food,
rather than what McDonalds has offer on its menu.

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