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McDonald Hong Kong Case Study

Autor:   •  February 11, 2017  •  Case Study  •  454 Words (2 Pages)  •  987 Views

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McDonald Hong Kong

McBalanced Active Life style

Pre

Post

Generic Business Level Strategy

Cost Leadership

Product Differentiation

Theory

The lowest cost of operation in the industry, driven by company efficiency, size, scale, scope and cumulative experience. (Michael and David, 1997)

The process of distinguishing a product or service from others, involves differentiating from competitors' products as well as firm's own products. (Edward, 1933)

McDonald

Cost of Operation
Labour cost:

Employs part time staffs for the store. The average wage is around HKD 32.5/hour based on Hong Kong Minimum Wage Standard.

Materials cost:
All stores order the materials from the same range of suppliers, enjoy the economics of scale.

Facilities cost:
Turns tables quickly around to high asset utilization.

Differentiation:

Launched McCafe from 1999. Changing the perception of McDonald, from Junk Food to High Quality food.

Strategy Effective?

The current strategy is not effective. The fast food industry becomes health focus. Government advocates health and balanced lifestyle. More high quality fast food restaurants entered in to Hong Kong Market, such as Subway and Oliver’s Sandwiches. McDonald more likely reacts to competitors instead of being a leadership anymore.

The below chart showing McDonald’s reaction by 4Ps. (James, 1940):

 

Subway

Oliver's Sandwiches

McDonald/McCafe

Promotions

Tasty and Stay Fit

Fresh Attitude

McBalanced Active Life Style

Price Level

HKD 40 - 50/meal

HKD 40 - 50/meal

HKD 40 - 50/meal

Products

Subs(Bread)/Salad

Sandwiches/Salad/Potatos

Burgers/Sandwiches/Salad

Place

Commercial area

Commercial area

Commercial and Residental area


McDonald used to focus on making burgers. However, they are now developing wider range of products. They get involved in the sandwiches and salad. For the burgers, they prefer to create high quality one, like Angus Beef Burgers.

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