CASE STUDY 1 – MCDONALD’S
Industry Analysis – Understanding the External Environment
Step 1 – definition of industry, its value chain and industry segments
Industry | Industry segment | Product segment |
Restaurant | Informal Eating Out (IEO) | Fast food |
Step 2 – Industry life cycle
1. Growth rate reduced, revenue increased at a decreasing rate??
2. Emphasis on cost control and/or product differentiation/market segmentation (e.g. premium Angus beef burger and healthy salad option)
3. Customers become more knowledgeable about nutrient and healthy eating; also demand for more variety of choice when eating out.
4. Market is saturated, got a few major ...view middle of the document...
And they have three global priorities which include optimising the menu, modernising customer experience
* adding new features and technologies that makes drive-thru, ordering and payment process easier
* remodelling their restaurants with its contemporary new designs
* Delivering strong value across every price tier (e.g. loose change menu)
* Extending opening hours at more locations
* Strategically opening new restaurants in both emerging and mature markets
All these aim to capture more market share, increase customer satisfaction and make the restaurant more available more often.
Q2 What products and services does it plan to produce?
* Expanding McCafe’s beverage/desserts range from quality coffees to real fruit smoothies
* Giving alternatives to Happy Meal e.g. French fries can be replaced to salad
* Evolving new menu with innovative local offerings
* Modify products to suit local taste e.g. McRib sandwich
* Focused on adding greater choice and balance options e.g. from iconic core menus ie Big Mac to Fruit and Maple Oatmeal, wraps
* Look to optimise product mix by utilizing a menu with entry-point value, core and premium and fourth-tier offerings e.g. Angus beef burger and Little Tasters in UK
* Adding new features and technologies that are making drive-thru ordering and payment processes easier
* Reimaging, modernising the restaurant to provide a superior experience for customer
* Open more restaurants, extend operating hours
Q3 What customer and geographic markets does it plan to service?
* Both emerging and mature markets
* Global in terms of geographic market
* Asia Pacific, Middle East & Africa
* Healthy eater
* People who is willing to pay more for premium food
* Friends (place to hangout)
Q4 What generic strategy does it plan to produce to position itself uniquely against competitors?
Differentiation – because of broad target market and variety in menu (across every price tier)/beverages (from quality coffees, cakes, smoothies to desserts)
Flexibility – modify their operation to suits local demand e.g. Value Lunch program in China & Japan, dessert kiosk in China
Q5 What position in the industry does it plan to hold in the future?
To differentiate itself by offering variety of menu for different customers, that include the healthy choice menu, and extending McCafe beverage range.
To be the favourite place and way to eat and drink.
Stay as a market leader, not just in market share, but taking leadership action across the broad spectrum of sustainability, including nutrition and well-being, a sustainable supply chain, environmental responsibility, employee experience, and the community.
Continue to use their scope, resources to make +ve difference to the community.
Step 2 – Analyse the performance of the organisation
Step 3 –...