McDonalds Case Study

McDonald's existing strategies and objectives focus on two goals. First, coping with the effects of the obesity through marketing and a new healthier product category and second, increasing brand awareness to maintain and develop market shares through their McCafe coffee services.

Objective one has been to expand food and beverages containing fruit and vegetables across the menu, and increase awareness of fruit, vegetable and dairy options available for children on the menu. McDonalds has once again established a trend that others are following by listing calories on their menu items. Their second strategy has been the addition of the McCafe with a target audience of those who would like something else than regular soft drinks as well as coffee fans. This strategy follows in the direction of maintenance of their unique firm power, and creation of the additional added cost through experience to keep and develop their shares in the American market.

Using this new strategy McDonald’s is trying to seize shares of the market in the coffee industry, dominated by companies like Starbucks. It is a courageous strategy, where they have an experience minimum, but however it is strategy which is supported by a considerable quantity of their brand popularity, customer loyalty, and marketing forces. They already have a global network of suppliers and one of the most influential brands in the world.

According to Porter’s Five Forces Model, if entry into a market is easy then rivalry is likely to be high. Considering McDonald’s competitive rivalry, there is intense competition in fast food industry that many small fast food businesses fight with each other to improve their customer base. This makes a competition the major focus between businesses. Although, McDonald’s, with more than 32,000 local restaurants serving more than 60 million people in 117 countries each day, has a number of fast food outlet competitors across the countries such as Burger King, Taco Bell, KFC, Wendy’s, it is currently the leader of the industry in market capitalization with a cap of $39.31 billion.

The fast food industry is almost always promoted by advertising because of the vast competition between fast food firms. Product differentiation is very important in the fast food industry to make your product stand out against the crowded fast food industry products. Furthermore, quality of the product or service in the fast food industry is very important as customers have full information of the products they buy and consume. Furthermore, if the fast food industry does not match the demands of the buyers and the general consumer trends, then the buyers can choose not to buy their product and convince others to do the same. A good example of this was the movie ‘Super Size Me’. It is a movie showing an ordinary consumer trying to live off of McDonalds fast food, and the purpose of the movie was to see what the traditional fast food from McDonalds