Mcdonald's: Polishing the Golden Arches
PROBLEM IDENTIFICATION
The main problem from McDonald's case, McDonald's Polishing the Golden Arches, is how to classify McDonald's strategy through Plan to Win into one of the five generic competitive strategies. Before we solve this main problem, we should determine the chief economic and business characteristics, the five forces analysis, and also the driving forces of the fast-food industry. After that we identify the strengths, weaknesses, opportunities, and threats by using SWOT analysis. Finally, we classify McDonald's strategy into one of the five generic competitive strategies.
ANALYSIS
The chief economic and business characteristics of the fast-food industry
In 2003 sales for the U.S. consumer food-service market totaled approximately $408 billion. For the sandwich segment, the top 30 sandwich chains had U.S. system wide sales of approximately $64 billion. Future growth in the sandwich segment was expected to be only around 2 percent annually for the foreseeable future. McDonald's and Burger King were the earliest and most aggressive hamburger chains to begin to expand internationally. The products of the various sandwich chains in U.S. were strongly differentiated, continuously follow the trends that are changed all the time.
The five forces analysis and the driving forces of the fast-food industry
By using the Porter's five forces model of competition, we identify rivalry among fast-food chains and buyers as the strong forces that make the competition in fast-food industry more and more tighten. In general, McDonald and its main competitors (Burger King Corporation, Wendy's International, Inc., Hardee's, and Jack in the Box) are active in making fresh moves to improve their market standing and business performance by introducing their product innovation and launching a lot of outlets (franchise). On the other hand, buyers were more increasingly focusing on value and healthy foods. This condition can force McDonald and its
The main problem from McDonald's case, McDonald's Polishing the Golden Arches, is how to classify McDonald's strategy through Plan to Win into one of the five generic competitive strategies. Before we solve this main problem, we should determine the chief economic and business characteristics, the five forces analysis, and also the driving forces of the fast-food industry. After that we identify the strengths, weaknesses, opportunities, and threats by using SWOT analysis. Finally, we classify McDonald's strategy into one of the five generic competitive strategies.
ANALYSIS
The chief economic and business characteristics of the fast-food industry
In 2003 sales for the U.S. consumer food-service market totaled approximately $408 billion. For the sandwich segment, the top 30 sandwich chains had U.S. system wide sales of approximately $64 billion. Future growth in the sandwich segment was expected to be only around 2 percent annually for the foreseeable future. McDonald's and Burger King were the earliest and most aggressive hamburger chains to begin to expand internationally. The products of the various sandwich chains in U.S. were strongly differentiated, continuously follow the trends that are changed all the time.
The five forces analysis and the driving forces of the fast-food industry
By using the Porter's five forces model of competition, we identify rivalry among fast-food chains and buyers as the strong forces that make the competition in fast-food industry more and more tighten. In general, McDonald and its main competitors (Burger King Corporation, Wendy's International, Inc., Hardee's, and Jack in the Box) are active in making fresh moves to improve their market standing and business performance by introducing their product innovation and launching a lot of outlets (franchise). On the other hand, buyers were more increasingly focusing on value and healthy foods. This condition can force McDonald and its