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McDonalds Case Study

Essay by review  •  November 29, 2010  •  Case Study  •  944 Words (4 Pages)  •  937 Views

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I. Introduction

McDonalds has always been a leader in the fast food industry. Through its dynamic market expansion, new products and special promotional strategies, it has succeeded in making a name for itself in the minds of the target customers. However, McDonald's earnings has declined in the late 1990's and 2000s. This is mainly due to a fiercely competitive industry and variety in customer tastes and preferences.

II. Statement of the Problem

How can McDonalds increase its sales, market share and profits in a fiercely competitive industry?

III. Objectives

McDonalds objectives are to reverse the decline of sales, to continue staying ahead of the competition in the fast food industry and to find new strategies that would help the restaurant successfully compete in the a fiercely competitive market.

IV. Areas of Consideration

Situation

* Eating habits of Americans are changing

* Younger consumers are getting tired of fast food and are becoming health conscious

* Growing dissatisfaction with the quality aspect of fast food restaurants such as McDonalds

* Fast food is losing its sense of appeal to the large group of customers who frequently eat out

Environment

* another segment of the fast-food industry is comprised of a non-hamburger restaurants, growing trend is moving customers to non-burger sandwiches

* increase in the fast-casual segment that includes restaurants that offer deli sandwiches and more upscale meals with more comfortable surroundings but faster

Background

* McDonalds has added new products on its menu

* Advertising message focused on tasty and nutritious food, friendly folks and fun

* Invested heavily in advertising and improving its public image

* Opened first domestic McCafe

Customers

* recognize the importance of drive-through customers

(try to increase the speed of drive-through delivery)

* Importance of heavy users of fast-food restaurants

Threats

* McDonalds cheap and greasy image

Major Competitors in the Hamburger Segment

* Burger King Corp. that offers an array of value-priced offerings and makes kitchen and drive through upgrades

* Hardee's that continually introduce new items in the menu and join the price-promotion burger wars

* Wendy's International who has the strongest same-store-sales gains in recent years

Major Competitors in the Non-Hamburger Segment

* Pizza Hut that dominates the Pizza Segment

* KFC that uses programs to attract kids and families to its food offerings

* Taco Bell that practice successful high-priced offerings

V. Alternative Causes of Action & Analysis

In today's market, McDonalds faces numerous challenges such as fierce competition, a more health conscious customer, and the continual need for improved customer satisfaction and menu. McDonalds needs to go through some changes in order to remain ahead in the fast-food industry.

Alternative 1

McDonalds should focus greatly on building good customer relationship and uphold customer retention. This is done by allocating time and budget in improving their resources and making changes that actually cater to their customers' needs and comfort. This includes having with multiple Drive-Throughs, (in accordance to giving importance to drive through

customers), having more cash registers to promote speed and efficiency in the ordering lines, and going for a more comfortable seating and dining environment, making dining-in more desirable

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