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131185867 Franchises Strategy

131185867 Franchises Strategy

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Published by: eaharri on Jun 21, 2013
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 1. History of McDonald's
 
 
1940- McDonald's BBQ opens in San Bernadino, California
 
 
1948- McDonald's closes and reopens as a "self-service drivein" with only 9 menu items
 
 
1949- They replace potato chips with the fries that everyoneknows and loves today
 
 
also the Triple Thick Milk Shake is introduced
 
 
1953- Golden Arches designed by Stanley Meston
 
 
1955- First franchise opened in Des Plaines, Illinois
 
 
1956- Fred Turner is hired to work the counter
 
 
later he became Head of Operations. He implementedthe service requirements that are still in place today
 
 
1958- The 100 millionth burger was sold
 
 
1959- The 100th franchise was opened in Wisconsin
 
 
1961- "Hamburger University" opened its doors underneaththe Elk Grove, Illinois location
 
 
1962- First indoor seating implemented in Denver, Colorado
 
 
1965- The first public stock was sold at $22.50 a share
 
 
1966- Ronald McDonald made his television advertising debut
 
 
1967- The first international franchises were opened in Canadaand Puerto Rico
 
 
1968- The Big Mac was officially introduced
 
 
1971- The Hamburglar, Grimace, Big Mac, Captain Crook, andMayor McCheese made there debut
 
 
1973- The Quarter pounder was added to the menu
 
 
1974- The first Ronald McDonald House opened
 
 
The Big Mac jingle is introduced
 
 
1975- The first drive through and breakfast were implementedthis year
 
1978- 5000th franchise opened in Japan
 
 
1979- Happy meals made their debut
 
 
1983- Chicken McNuggets added to the menu
 
 
1987- Fresh Salads were added to appeal to the healthconscious
 
 
 
1988- McDonald's hamburgers were named in the top 100America Makes
 
 
1996- The corporate website was launched
 
 
2008- The packaging was given a complete overhaul
 
2. McDonald's Positioning
 Strategic Positioning is defined as doing different activities thanyour competitors or doing the same activities differently. This is theway your company becomes a superior performer in the industry.Many people describe their positioning based on their customerbase. For example, Burger King focuses on young adult males astheir target customer. There strategy and positioning is directed tosatisfy this sector of the market. Wendy's on the other hand has adifferent positioning. They base their positioning to satisfy the olderhealth conscious individuals. They both differ from ourstrategy. When you simplify things down it turns out there are onlytwo basic types of positioning; low cost or differentiation. This ishow you choose to serve your customer base, or how yourcustomer base guides you to operate. You choose your customerbase to be either broad or narrow scope. The company needs toselect one or the other in both categories or they will achieve belowaverage results and be mediocre. We have selected one and aredoing it well
McDonald’s has made itself to be t
he family friendly low costrestaurant in the fast food business. We have a narrow scope for acustomer base and a low cost strategy. In recent years we havetended to broaden our scope to appeal to more customers. Inrecent years due to lost sales we have started to make our menu amore healthy option. We still try to keep our target marketnarrowed down to families, but others deserve attention as well. Weare focused on cutting delivery time and cutting the cost of food.We have the most modern and technologically advanced equipmentin our restaurants to make your job easier. The computer operatedmachinery allows you to keep cost low by only needing a fewemployees to do the work of several. It also allows your employees
 
to do it quicker. Our strategy is conveyed throughout all of ourbusiness operations. If you notice, many McDonald's have dualdrive-through to decrease wait time and to increase volume of customers served. This may be a good idea for your location. Wehave stuck to our core market throughout the years even throughthe changing times. We have included playgrounds in many of therestaurants and our marketing schemes feature family friendly adsand slogans. The term happy meal is said and begged for bychildren worldwide and has become a house hold name. McDonald's
does things differently than it’s competitors by marketing to the
family market where as its competitors market to a broader base insome cases or to different generations such as Burger Kingmarketing to young adults. McDonald's has positioned itself on theforefront of fast-food technology and sets the standards for the restof the industry.
 3. McDonald's Industry
 Industry refers to the competitive environment a company operatesin. In any industry, there are five basic forces of competition: rivalryamong competitors, barriers to entry, bargaining power of buyers,bargaining power of suppliers, and the threat of substitutes. Thesefive forces affect just how profitable an industry can be.The fast food industry is highly competitive. Consumers make theirpurchasing decisions based on price and convenience. Customerloyalty isn't prevalent. We have numerous companies to competewith including: Burger King, Taco Bell, KFC, Jack in the Box, Sonic,and Wendy's. Competition also extends to restaurants in general.The barriers for entry are low for the fast food industry. Meaningthat a new competitor is always on the horizon. Consumers maketheir purchasing decisions based on price and convenience, meaningthe buyer has purchasing power. Suppliers also have bargainingpower. With the higher energy
and oil prices, commodities like corn andwheat have had an increase in prices as well. These higher commodity priceshave reduced the profit margins of the entire fast food industry. Anotherproblem is that with the intense price driven competition we can't pushthese margin loses back onto the consumer. We must absorb the hitbecause of the extremely high number of substitutes available. The fast food

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