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McDonald Case

Essay by   •  November 2, 2017  •  Case Study  •  373 Words (2 Pages)  •  2,047 Views

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McDonald’s Case Note

Analysis

  1. The trends in McDonald’s external environment that are likely to have the greatest impact on the company’s ability to sustain a competitive advantage is:
  • the millennials eating out at fast-casual restaurants that emphasize ingredient quality and demonstrate an awareness of social issues like environmental sustainability
  • the key demographic group for most fast food restaurants is young adults,18-32-year-old age group; they are called “heavy users” and visit fast food restaurant chain twice or more per week
  • the millennials consider transparency very important; restaurants being open about their food sourcing and preparation give trust and thus attract young adults
  • but McDonald’s has been unsuccessful in attracting these millennials
  • McDonald’s public image has been seriously damaged by more than a decade of negative press
  • McDonald’s use of beef tallow as flavoring when cooking French fries, use of pink slime, making burgers out of boneless lean beef trimmings mixed with ammonium hydroxide were the main reason
  • Easterbrook is trying to appeal to the millennials by digitization- he hired former Google executive to improve social media presence, develop smartphone apps, and test mobile payment systems
  1. How is McDonald positioned vis-à-vis its major competitors?
  • Although McDonald is the largest in the industry, it is behind all of its competitors (Burger King and Wendy’s) in terms of service, food quality, and innovation.
  • When compared to Burger King, Burger King is the third largest in the industry and its stock outperformed McDonald’s in 2015
  • Burger King is successful because it focused on simplicity: adding sauces, cheese and etc. to its core burger line to create new menus - allowed them to innovate without slowing service
  • Burger King was also successful in offering limit time offers and attractive promotions
  • Wendy’s differentiates itself as a cut above its competitors by offering higher-quality food that is made fresh-to-order.
  • Wendy’s is doing better on betting big on just a few hit products, such as its pretzel buns
  • Wendy’s has a faster service than McDonald; its average service time is one minute less than McDonald’s service time of 189.2 second
  • Unlike Burger King, Wendy’s, and Taco Bell, McDonald’s greater variety of menu options slow down the order fulfilment process, increase employee stress and customer frustrations.

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