Mcdonald's Strategic Prospects
Unit III Case Study
Business Policy and Strategy
Competitive Profile Matrix | McDonald’s | Burger King Holdings | Yum! Brands Inc | Critical Success Factors | Weight | Rating | Score | Rating | Score | Rating | Score | Advertising | .15 | 4 | .6 | 2 | .3 | 3 | .45 | Product Quality | .15 | 2 | .3 | 1 | .15 | 3 | .45 | Price Competitiveness | .10 | 3 | .3 | 2 | .2 | 4 | .4 | Management | .10 | 3 | .3 | 1 | .1 | 2 | .2 | Financial Position | .15 | 4 | .6 | 2 | .3 | 3 | .45 | Customer Loyalty | .15 | 3 | .45 | 2 | .3 | 4 | .6 | Global Reach | .15 | 4 | .6 | 3 | .45 | 2 | .3 | Market Share | .05 | 3 | .15 | 1 | .05 | 2 | .1 | Total | 1.0 | | 3.3 | | 1.85 | | 2.95 |
With more than 31,000 restaurants in 118 countries and serving nearly 60 million consumers daily, McDonald’s (MCD) has grown to be the largest food service merchant worldwide. It is because of this that McDonald’s ranks higher than both Burger King Holdings (BKC) and Yum! Foods Inc. (Yum) in just about every category of the Competitive Profile Matrix (CPM). The 2008 year end numbers show that McDonald’s revenue of $22.99 billion doubled that of Yum and more surprisingly almost ten times the revenue of Burger King. Yum ended the year with a net income of $928 million, which sounds like a good year until you see that MCD’s year netted $4.35 billion (David, 2011).
McDonald’s was able to increase their net income by almost 80% from 2007 to 2008 thanks in large part to their global modify their menus to meet the local consumer’s diet needs such as offering vegetable patties and pushing their chicken menu in India, where cows are worshipped and not eaten. Even McDonald’s is not immune to decline sales and slow economic growth however, as was evident in 2006 when the company was forced to cut costs by 40% in China to reverse declining sales (David, 2011). Customer loyalty and price competitiveness are areas that favor Yum! Brands Inc. simply due to the fact of the company’s
Business Policy and Strategy
Competitive Profile Matrix | McDonald’s | Burger King Holdings | Yum! Brands Inc | Critical Success Factors | Weight | Rating | Score | Rating | Score | Rating | Score | Advertising | .15 | 4 | .6 | 2 | .3 | 3 | .45 | Product Quality | .15 | 2 | .3 | 1 | .15 | 3 | .45 | Price Competitiveness | .10 | 3 | .3 | 2 | .2 | 4 | .4 | Management | .10 | 3 | .3 | 1 | .1 | 2 | .2 | Financial Position | .15 | 4 | .6 | 2 | .3 | 3 | .45 | Customer Loyalty | .15 | 3 | .45 | 2 | .3 | 4 | .6 | Global Reach | .15 | 4 | .6 | 3 | .45 | 2 | .3 | Market Share | .05 | 3 | .15 | 1 | .05 | 2 | .1 | Total | 1.0 | | 3.3 | | 1.85 | | 2.95 |
With more than 31,000 restaurants in 118 countries and serving nearly 60 million consumers daily, McDonald’s (MCD) has grown to be the largest food service merchant worldwide. It is because of this that McDonald’s ranks higher than both Burger King Holdings (BKC) and Yum! Foods Inc. (Yum) in just about every category of the Competitive Profile Matrix (CPM). The 2008 year end numbers show that McDonald’s revenue of $22.99 billion doubled that of Yum and more surprisingly almost ten times the revenue of Burger King. Yum ended the year with a net income of $928 million, which sounds like a good year until you see that MCD’s year netted $4.35 billion (David, 2011).
McDonald’s was able to increase their net income by almost 80% from 2007 to 2008 thanks in large part to their global modify their menus to meet the local consumer’s diet needs such as offering vegetable patties and pushing their chicken menu in India, where cows are worshipped and not eaten. Even McDonald’s is not immune to decline sales and slow economic growth however, as was evident in 2006 when the company was forced to cut costs by 40% in China to reverse declining sales (David, 2011). Customer loyalty and price competitiveness are areas that favor Yum! Brands Inc. simply due to the fact of the company’s