McDonald’s Corporation

Group 3
Adrivit Sarkar – MBA2021 -007
Ankit Mukhopadhyay – MBA2021 – 021
Ashmita Satyanarayanan – MBA2021 – 029
Krishnan Sankaranarayanan – MBA2021 – 073
Mayank Gwal – MBA2021 – 087
Satish Sharma – MBA2021 - 133
Shubham Panda - MBA2021 - 154
Varun Mehta - MBA2021 - 176
Yash Tiwari - MBA2021 – 181
1. Which trends in McDonald’s external environment are likely
to have greatest impact on the company’s ability to sustain a
competitive advantage?
2. How is McDonald’s positioned vis-à-vis its major competitors?
 3. Which business-level strategy does McDonald’s employ? Is it
effective? How so?
The business strategy that McDonald’s employed are-

Product differentiation – McDonald’s made lot of changes in their

offerings. They proposed all day breakfast in all their restaurants. For this
they also equipped their kitchen with separate grills. They restricted their
breakfast menu toa few popular items such as sausage burritos, hot
cakes, and Egg McMuffin. To give customer more choices McDonald’s
gave more freedom to its franchise to offer local relevant menu items.
They also granted freedom to run their own promotions to increase store
traffic. McDonald’s also started experimenting “Build your own” tablets
where customer design their own sandwiches over 30 choices of meats,
Mac etc. While a greater variety of menu options helps to draw new
customers into stores, too many items slow down the order fulfilment
process, increasing employee stress and customer frustrations.
Complaints about speed of service have “increased significantly” in recent
years, with the McDonald’s service experience described as “chaotic”.

Better Product quality – McDonalds’s declared improving food quality

as one of the top priorities. They curtailed antibiotic use in its chicken
supply and plans to start selling dairy products from growth-hormone-
free cattle. They also started examining its product ingredients and
review its food preparation procedures. Their target was to reduce the
number of preservatives. They started promoting their positive campaign
highlighting their food and worker. Through this they want to change
consumer perception about McDonald’s from fast food restaurant to
healthier place to eat.

Cost leadership - McDonald’s success lies in the utilization of technology

and standardization of work. It constantly updates its menu according to
local demands. On the cost front, it orders in bulk and hence manages to
get it for low prices. So, it gives them edge over the competitor in terms
of lesser training cost, setup cost, coordination cost, resource switching
costs, etc.
And this strategy has been effective as the research indicates that the
typical American dines out five times per week and McDonald’s three
main target market segments are mothers, children, and young adults. as
Mom’s view McDonald’s as a quick, easy, and affordable meal for families
on the go, and they usually are the ones who bring the children as
McDonald’s reduced its Happy Meal calorie count by 20 percent by
adding apples and halving the number of French fries. and because of the
fast-food experience with incorporation of cost effectiveness and variety
of product differentiation McDonalds has been able to preserve the Mc
Experience. which has been beneficial for them in the run.

4. Which international strategy does McDonald’s employ? Is it

effective? How so? (Hint – develop a list of what is common
versus what is different across McDonald’s restaurants
worldwide and then identify the strategy used)?
McDonalds to expand and sustain internationally chose to uniquely adapt
and change their menu to satisfy the needs of the regional customers. For
example, kosher menus in Israel, Halal menus in Arab countries, and lamb
patties for non-beef-eating India.
The company rely on the same brand names and the identical core menu
items around the world but make some changes and personalization in
the menu according to the taste and preferences of the local people.
Some of the core identical items in the menu include French fries,
Chicken McNuggets that are available worldwide easily
Following are the changes or different menus that McDonalds has
introduced in various countries-
1. India- Beef is replaced with chicken, vegetarian options like McAloo
tikki, McVeggie introduced, a 100% vegetarian outlet in Amritsar
(one of its kind in the whole world)
 2. Germany- beer is served in almost all McDonalds outlets
3. Japan- Green tea ice-cream, Teriyaki burgers, seaweed shaker,
shrimp nuggets introduced
4. Arab Countries- famous for halal menus
5. Israel – famous for kosher menus
6. Switzerland- McRaclette only served in Switzerland, filled with swiss
famous raclette cheese.
The transnational strategy adopted by McDonalds is effective because it
manages the global efficiency on such a large scale as well as national
responsiveness.
1. Through their expertise in standardisation and economies of scale,
they are able to provide competitive pricing and hence generate
greater revenue.
2. Taking the example of India, McAloo tikki proved to be one of the
best decisions of the company as it is the most- selling product in
the Indian market. This trend was not only seen in India but
countries worldwide where the local taste was given more
importance.
3. Through this strategy McDonalds can save a lot of expenses and cut
costs through hiring cheap labour and using raw material from the
country they are operating in.

Given below are the market shares of some of the Fast-Food Restaurants
in US in the year 2012. One can observe how much lead McDonald’s had
in the market. Also provided is the revenue comparison worldwide in
2020.
 Revenue (billions) for fast food companies in 2020 worldwide

Dunkin’ Donuts

Taco Bell
Fast food restaurants

Burger King

Wendy’s

Subway

McDonald’s

00 00 00 00 00 00 00 00 00 00 00
. 00 . 00 . 00 . 00 .00 . 00 . 00 .00 . 00 . 00 .00
$0 $2 $4 $6 $8 $1
0
$1
2
$1
4
$1
6
$1
8
$2
0

Revenue in billion

Market Share of fast food restaurants in US in 2012

Dunkin’ Donuts
Fast Food Restaurants

Taco Bell
Burger King
Wendy’s

Subway
McDonald’s
0.00 5.00 10.00 15.00 20.00 25.00 30.00
Market Share in %