Q1. Briefly summarize the problem(s). (Assume we’ve read the case). Think about the problem from McDonald’s perspective.
Despite the fact that McDonald’s is one of the most famous companies in the world, the business model which was so critical to its massive success in the past is threatened. The critical success factors that led to its dominance are no longer present in the American fast food marketplace today. America is growing more diverse and consumers are demanding a wider variety of products, even from fast food restaurants. This includes not only the standard diversity of beef and chicken, but also ethnic diversity, as manifested in the dominance of franchises such as Chipotle. Yet the McDonald’s primary revenue remains derived from its burger offerings, chicken nuggets, and fries.
Even many of its direct competitors for its burgers are offering menu items of higher quality than McDonald’s. Fast casual restaurants are likewise encroaching upon its revenue, and again offer a more diverse array of food products than McDonald’s. Many of these products are also healthier than McDonald’s core offerings, and McDonald’s has yet to design a product that is as equally desirable as its burgers and fries, yet appeals to a healthier consumer. McDonald’s has been a company associated with greasy, fast, comfort food, and to shift its brand image from this means sacrificing the image which has been the core of its revenue base. On the other hand, the attractions of this type of food are no longer embraced by the majority of consumers.
Offering greater variety and healthier and fresher items is time-consuming. But while the newly desirable millennial target market may demand such qualities from the establishments they frequent, this means that McDonald’s may have to sacrifice speed and the low cost of its items to answer these demands. On the other hand, one of the core principles of any sound branding is to offer a unique value proposition to customers that competitors cannot easily replicate. McDonald’s has always stood by its value (as exemplified in its dollar menu) and speed.
Yet even in regards to speed, McDonald’s is lagging behind, as more and more companies offer online ordering, which means that...
References
The nag factor. (2011). Johns Hopkins Bloomberg School of Health. Retrieved from: https://www.jhsph.edu/news/news-releases/2011/borzekowski-nag-factor.html
Questions and answers on the menu and vending machines nutrition labeling requirements. (2019). FDA. Retrieved from: https://www.fda.gov/Food/LabelingNutrition/ucm248731.htm
Starr, E. (1999). Business level strategy. University of Albany. Retrieved from: https://www.albany.edu/faculty/es8949/bmgt481/lecture4.html
Uber Eats. (2019). Retrieved from: https://www.ubereats.com/en-US/
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