Running head: McDonald’s: A Case Study 1

McDonald’s: A Case Study

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Brief History of the Company and its Products and Services

Since its inception in 1940, McDonald's Corporation, an American fast-food company

has continuously served a worldwide chain of 30,000 restaurants. The restaurants were initially

managed by Richard McDonald and his brother, Maurice, in San Bernardino, California. Known

worldwide by the Golden Arches logo, McDonald’s went into franchising in the 1950s and has

recently moved its global headquarters to Chicago. McDonald's is majorly known for selling

hamburgers, assorted chicken and chicken sandwiches, soft drinks, French fries, and desserts. In

certain sensitive and fragile markets, McDonald's offers salads and vegetarian items, wraps, and

localized food products based on the cultural values of the people it serves in such locations.

McDonald’s is a corporation that boasts of 1.7 million employment base and serves over

69 million customers worldwide per day, with 28 million of that population in the United States

alone (Starkman, 2014). The Corporation’s intimidating presence in over a hundred countries

with 37,855 outlets makes its incredible reach a force to reckon with. However, in its effort to

establish a huge presence all over the world, McDonald’s developed its marketing strategies in

line with the needs of its customers, and meeting these needs by listening more attentively

became highly essential to the sustenance of its business. Moreover, as a part of McDonald’s

core business ethics, the corporation excels in consistently providing quality and nutritious foods

to the public.

Description of their customers

McDonald’s majorly focuses is on its customers that include children who love a lot of

goodies and McDonald’s excels in being omnipresent and attracting children with a lot of them

in the form of happy meals and toys. In other words, McDonald’s has continued to develop its

menu to satisfy the ever health-conscious parents who are constantly concerned about the health
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of their children. Likewise, Young adults between the ages of 18 – 29, otherwise known as the

millennials, are attracted to McDonald’s because it offers them a lot of tasty meals, trendy music,

vigorous, energetic, and fun activities, which also include customized orders that constantly

appeal to them (Dudovskiy, 2016). In the same vein, adults between the ages of 30 – 45 who are

often conscious of their health are attracted to McDonald’s constantly review its menu, which

offers less in calories and more in healthy choices of meals that include fresh, sustainable, and

organic healthy foods. Most of these young adults are business customers who often stop to grab

some good food quickly during the workday. 

McDonald’s current or challenges

The volatility of the fast-food market is a big challenge to McDonald’s Corporation,

which runs a very complicated franchising model. This often puts it at risk of mismanagement,

low-income generation, and customer dissatisfaction because of its lack of total control over the

daily activities of its franchisees. Additionally, McDonald’s faces a serious problem with

intrusions in its supply chain limiting the availability of products and having a direct impact on

its services by reducing revenues. McDonald’s has in recent times suffered reputation damage as

a result of employees’ dissatisfaction with wages. Customers also showed a decline in their

consumption of McDonald’s breakfast menu meaning that it is gradually losing the charm in its

breakfast menu. McDonald’s is currently feeling the pressure of stiff competition from a range of

fast-food chains. Leading competitors like Subway, Burger King, and Wendy’s have been about

a bit, but Chick-fil-A has overnight, turned to “McDonald’s biggest competitor in the fiercely

competitive QSR space” (Kelso, 2018). 

However, in trying to keep an edge over its competitors, McDonald’s incurs more

operating cost in maintaining product quality and in trying to cope with constant pressure from
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government regulatory agencies, especially when expanding to gain access to more overseas

markets. McDonald’s focus is majorly on food and beverage products, failing to diversify its

products and causing a major weakness exposing the firm to slowdowns in the restaurant market.

Without mincing words, McDonald’s has vigorously used its global appeal to transform its

franchising into a science, such that, it garners the most patronage and maximizes sales by

localizing its franchises and covering the costs of such set-up. McDonald’s smart and prudent

goals of establishing a fast-food restaurant in every corner through aggressive franchising

determine its competitive advantage in the fast-food business (Amor, 2013). This strong strategy

that leverages its key strengths allows McDonald’s to attain economies of scale through

operational efficiencies and creating an environment where it has continuously achieved its

crucial targets and robust business processes.

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References

Amor A. (2013). McDonald’s Competitive Strategy, Munich, GRIN Verlag,

https://www.grin.com/document/269111

Dudovskiy, J. (2016, February 8). McDonald’s business strategy and competitive advantage.

Research-Methodology. https://research-methodology.net/mcdonalds-business-strategy/

Kelso, A. (2018, December 20). Chick-fil-A is now McDonald's biggest threat. Forbes.

https://www.forbes.com/sites/aliciakelso/2018/12/20/how-chick-fil-a-positioned-itself-to-

be-mcdonalds-biggest-threat/#4dfb9c1f1ae7

Starkman, N. (2014, October 13). What McDonald’s new 'Transparency' campaign is hiding.

Time. https://time.com/3501921/mcdonalds-transparency-campaign/