.Strategic business units are classified as stars, cash cows, question marks or dogs.

According t

Q#01: CHOOSE A COMPANY WITH ATLEAST FOUR SBU’S HAVE

COMPETITORS OF ALL SBU’S MAKE A PRODUCT PORTFOLIO OF EACH
PRODUCT LINE OF A COMPANY, DETAIL OF ALL CHOOSEN SBU’S?
COMPANY: Mc Donald’s
I choose McDonald’s because the focus has been on simplicity of the ordering experience,
low-cost but tasty food, and response customer service.

This Photo by Unknown Author is licensed under CC BY-SA-NC

INTRODUCTION:
 The first McDonald’s restaurant was opened in 1940 by brothers Maurice (“Mac”) and
Richard McDonald in San Bernardino, California. It originally was a drive-in that offered a
wide selection of items. However, in 1948 the brothers decided to revamp the business, and
after a three-month renovation, a newly envisioned McDonald’s opened. The small restaurant
was designed to produce huge quantities of food at low prices. To achieve this, the brothers
limited the menu—which only featured hamburgers, potato chips (later replaced by french
fries), drinks, and pie—and developed a simple, efficient format that they named the Speedee
Service System. This included a self-service counter that eliminated the need for waiters and
waitresses, and customers received their food quickly because hamburgers were cooked
ahead of time, wrapped, and warmed under heat lamps. These innovations allowed the
brothers to charge just 15 cents for a basic hamburger, about half the price of competing
restaurants. McDonald’s was a huge success, and the brothers began a franchise program
Over the years McDonald’s also expanded its menu, introducing Filet-O-Fish sandwiches
(1965), Quarter Pounders (1973), Egg McMuffins (1975), Happy Meals (1979), and Chicken
McNuggets (1983). In addition, restaurants in foreign countries also adapted their menus to
appeal to local customs and tastes.
In the late 20th century, McDonald’s moved beyond the hamburger business by acquiring
Chipotle Mexican Grill (1998), Donatos Pizza (1999), and Boston Market (2000) in the
United States, and in the United Kingdom McDonald’s purchased Aroma Cafe (1999) and an
interest in Pret A Manger (2001), a sandwich restaurant chain. However, by late 2008
McDonald’s no longer owned or had a stake in any of those companies, instead concentrating
on its own brand.
MC DONALD’S OWNER:
The present corporation credits its founding to franchised businessman Ray Kroc on April 15,
1955.
MC DONALD’S MISSION, VISSION AND VALUES:
MC DONALD’S MISSION STATEMENT: McDonald's brand mission is to be our
customers' favorite place and way to eat and drink. Our worldwide operations are aligned
around a global strategy called the Plan to Win, which center on an exceptional customer
experience – People, Products, Place, Price and Promotion. We are committed to
continuously improving our operations and enhancing our customers' experience.
MC DONALD’S VISSION STATEMENT: To move with velocity to drive profitable
growth and become an even better McDonald s serving more customers delicious food each
day around the world.
MC DONALD’S VALUES: No one has added McDonald's' values yet.
STRATEGIC BUSINESS UNIT (SBU) OF MCDONALD’S:
The five kinds of McSubs -- vegetarian, Italian, ham and cheese, turkey, and turkey combo --
cost from $1.99 to $2.59. They come in an eight-inch bun with lettuce, tomatoes, onions and
special sauces. Strategic business units are classified as stars, cash cows, question marks or
dogs.According to analysis initially when McDonald’s as a business unit was a star that has
high growth rate along with high market share, but now it has turned into cash cows. Cash
cows is that strategic business unit in which has low growth rate and but it is enjoying high
business share or product. McDonald’s is an established strategic unit that now needs less
investment to garb its market share as compared to other emerging business units.In the BCG
matrix Stars that depicts old traditional products are now enjoying a high market share
without having too much changes as earlier. They have reached at sustainable market
position, whereas McDonald’s continues with increasing more innovative food product that
enjoys a great market share as well as shows a high growth rate. But there are a very few
products which can be placed in dogs.With the passage of time strategic business units
change their position. They complete their life cycle. A product may starts as a question
marks then it succeeded and becomes stars. Then as time passes they turned into cash cows
and when they reach to their maturity they ends up as dogs.
BCG MATRIX OF MC DONALD’S HAS FOUR COMPONENTS:
 Cash Cow
 QuestionMark
 Dog
 Star
Cash Cow:
McDonald's makes lots of money selling chicken sandwiches, fish sandwiches, and french
fries, but those aren't its only products. Its real cash cows are Mc Chicken, Fish-o-Fillet
burgers, and Fries. That's because McDonald's customers love its food and are willing to pay
reasonable prices. If McDonald's doesn't keep up its quality, it risks losing the loyalty of its
loyal customers. So McDonald's must continue to evolve and improve its products to stay
ahead of the competition.
Question Marks:
The suitable product in the McDonald's Matrix phase is McDonald's Ice Cream, Cone. This
product has the lowest market share but the highest market growth rate. Now it is reasonable
to believe that this product is worth a lot of money. However, if the company invests too
much money in this particular product, it would be better to turn it into a star product. If the
company doesn't do this, it would be better for this product to be liquidated because it will
negatively impact the whole product's life cycle.
Dogs:
The suitable product in the McDonald's Matrix phase is McDonald's Ice Cream, Cone. This
product has the lowest market share but the highest market growth rate. Now it is reasonable
to believe that this product is worth a lot of money. However, if the company invests too
much money in this particular product, it would be better to turn it into a star product. If the
company doesn't do this, it would be better for this product to be liquidated because it will
negatively impact the whole product's life cycle.
Stars:
The Mc Flurry is the company's star product as McDonald's is making a profit from this
particular product. This is because it has a high market share and maximum market growth
rate. They need to invest more money in the product to grow at the maximum rate. It has the
highest market share with the maximum market growth rate in the UK. The US and Germany
have very low market shares, and there is no market growth rate.

STRATEGIES: McDonald's marketing strategy has helped the company achieve the success
it commands today. From the start of its growth, the company wanted to build strong brand
recognition and market penetration to help promote its growing franchise business. As the
company's number of customers grew, they did more research on demographics to help them
target easily. McDonald's marketing strategy includes investing in online and offline
marketing methods that spread its clear, brand-centered messages to a large audience and
using other channels like its dedicated mobile app to reach and keep loyal customers.
McDonald’s uses a value-based pricing strategy and strives to provide value to its customers
across the menu, and also offers a $1-3 menu. In essence, their goal is to keep prices as low
as possible.
COMPETITORS OF MCDONALDS:
STAR: Mc Flurry competitor KFC
QUESTION MARK: Mc Donald’s ice cream , cone competitor yums
CASH COW: Mc Chicken, Fish-o-Fillet burgers Fries competitor burger king and NFC
DOG: Mc Donald’s Coffee competitor Fries of burger king
Company Competitor:
Competitors refer to businesses or any entities that produce goods and services that are
similar or almost similar. Competitors are most common in competitive markets. For a firm
to serve in a competitive market, it has to develop competitive strategies to attract more
consumers than other firms. McDonald's is one of the major fast-food companies in the
United States. The firm was founded in 1955 a California, United States. The main offices of
the firm are found in Chicago, Illinois, United States.The competitors of McDonald's include
KFC, Burger King, and Pizza Hut. They are competitors because they all engage in the
production of fast-food.
MCDONALDS PRODUCTS (PRODUCT MIX):
As a food service business, McDonald’s has a product mix composed mainly of food and
beverage products. This element of the marketing mix covers the organizational outputs
(goods and services) that the company provides to its target markets. McDonald’s product
mix has the following main product lines:
 Hamburgers and sandwiches
 Chicken and fish
 Salads
 Snacks and sides
 Beverages
 Desserts and shakes
 Breakfast/All-day breakfast
 McCafé

PRODUCT PORTFOLIO (CHARACTERISTICS OF MCDONALDS

PRODUCT):
We all know that McDonalds is a no 1 fast food brand in the whole world. So let’s hold on
for a minute and lets think about how they got there. Basically McDonald as a brand is an
example of new paradigm. They are undoubtedly more focused on what the customer’s
feedback. As time passed they gave the customer’s quick quality food, a clean environment
and great service. Basically marketing is a term in which we have to identify the needs and
wants of the customer offering the customer something better than its competitors That’s the
way to get loyal customer you also have to target your market. Not everyone is going to
choose McDonalds over other brands. In my opinion the main characteristic trials on which
McDonalds work on is providing a friendly, family oriented environment, a happy, cheerful
hangout place for youth. There should also be good service and cleanliness. It’s a place where
anyone can come. There is no specific target market in this scenario.
For the case of McDonald’s, having a high market share and being in a fast growing market,
it is situated in the Stars quadrant. So as mentioned below, McDonald’s need to invest. The
fast food restaurant industry is a competitive one, McDonald’s can consider an expansion
strategy, that is, investing in places, countries where there are few numbers of McDonald’s
restaurants.
To conclude, the recent performance of McDonald’s has been poor. And none of its strategies
has proved to be effective. The company has to review their planning techniques and their
strategies to be implemented to be competitive. Expansion seems to be a good strategy to be
adopted considering the BCG matrix.
McDonald’s continues with increasing more innovative food product that enjoys a great
market share as well as shows a high growth rate. But there are a very few products which
can be placed in dogs.With the passage of time strategic business units change their position.
They complete their life cycle. A product may starts as a question marks then it succeeded
and becomes stars. Then as time passes they turned into cash cows and when they reach to
their maturity they ends up as dogs.
MARKET GROWTH RATE:
The market of McDonald's grew by a massive $23.22 billion last year. That's impressive
growth for a fast food chain that began as a single restaurant.
McDonald's posted $23.2 billion in global revenues, 21% more than in 2019 and the most in
five years. Net income climbed 59% to $7.5 billion in fiscal 2020, which ended May 31.
McDonald's has almost 43.8% of the market share as well.
RELATIVE MARKET SHARE:
McDonald's relative market share in the year 2021 was 43.8%. McDonald’s posted system-
wide sales growth of 21% for the full year, surpassing $112 billion globally. The U.S.
comparable sales grew 13.8% for the full year, marking the highest U.S. annual comparable
sales ever reported. Digital sales totaled over $18 billion in 2021, or over 25% of total
Systemwide sales in our top six markets. McDonald’s delivered operating income growth of
41% for the full year, surpassing $10 billion globally. The company's operating margin
was10.2%, up from 5.7%.