McDonald’s, a widely recognized fast food franchise with a global presence, has been in operation since the 1960s and currently boasts a network of 30,000 eateries worldwide. Notably, McDonald’s restaurants stand out for their practice of tailoring their menu offerings to align with the local culture.
Several contemporary elements have been meticulously arranged for optimal effectiveness, including McDonald’s popular use of familiar toys and movies as part of its promotional approach, its involvement in charitable endeavors, and its well-planned distribution of classified advertisements.
Local men and women own and run more than 75% of McDonald’s. Every day, it serves more than 40 million individuals. Around 82% of its revenue comes from 8 different nations, including Japan, Korea, Australia, France, Germany, and the United States.
The major accomplishments of McDonald’s in these nations, however, have been in forging a positive brand image and name recognition in the minds of the populace, with hygienic precautions serving as the primary competitive advantage that draws in a large number of consumers.
They have developed a corporate symbol, and extensive advertising has aided McDonald’s by imprinting a positive perception of the company’s name and emblem in the minds of millions of customers.
Owning all of the lands on which this was built, regardless of whether it was owned by the corporation or a franchise, has been a significant component of the firm’s strategy from the start. Although the amount of rent varies depending on the property, it has been estimated that McDonald’s makes more money from renting the property than it does from the franchise fees it charges.
Since its inception, it has been successful thanks to the excellent customer service it offers. Each restaurant strives for a positive brand image by serving high-quality meals and providing excellent customer service.
It has established a reputation in both industries by offering high-quality, reasonably priced food and excellent service. It offers a small menu but fantastic selections.
McDonald’s Franchise Business Model
A three-structured franchise model is used by McDonald’s. 90% of the restaurants owned and run by the company are franchises. Franchisees manage their restaurants under the company’s supervision and serve as their employees’ employers.
They have a lot of influence over how their restaurants are priced, sold, and run. A global master plan called “Plan To Win,” which is the foundation of its corporate strategy, is used. McDonald’s upholds each of the four principles outlined in its mission statement: “Quality, Service, Cleanliness, and Value.”
- McDonald’s earned 19.21 billion dollars in total revenue in 2020.
- It is placed ninth in a ranking of brands in 2021 based on their worth, up 20% from the year before, with about 155 billion dollars.
Segments in the McDonald’s Business Model
The segments can be categorized qualitatively into the following four groups:
- The biggest market, which is still the United States as of 2018, is still quite important.
- Australia, Canada, France, Germany, the United Kingdom, and comparable markets are examples of international lead markets.
- China, Italy, Korea, the Netherlands, Poland, Russia, Spain, Switzerland, and other regions with high development potential are among the high-growth markets.
- The remaining markets in the McDonald’s system, the majority of which use a substantially franchised model, are known as Foundational Markets & Corporate.
Business Model For McDonald’s: Marketing Techniques
- McDonald’s aims to improve the customer experience by concentrating on the five Ps. People, products, place, price, and promotion are the five Ps.
- McDonaldization: The term “McDonaldization” is frequently used to refer to McDonald’s success in the global market. More than 120 countries have found success with it because of its organizational structure. The central organization’s principal priority is localization.
- Relationship with Employees: McDonald’s offers support to its employees, unlike any other company. Career prospects, a great work environment, and solid partnerships all promote business success.
Growth Plan and Accelerators at McDonald’s
The Velocity Growth Plan, McDonald’s business model, and customer-centric strategy were launched in 2017 and focus on three crucial parts of the business’ operations: food, value, and customer experience.
- Emphasizing markets where it already has a strong presence, such as family gatherings and food-focused breakfasts, would help retain current clients.
- Gaining back fewer frequent visitors: Reaffirming its dedication to its historical advantages, including food’s superior flavor, quality, and convenience.
- Converting transient users into loyal ones: boosting snack and treat offerings while reinforcing and expanding the McCafé coffee brand in order to foster long-lasting relationships with customers and encourage frequent visits.
The three growth accelerators will continue to be aggressively deployed by McDonald’s in 2019 and beyond:
- Modernization and technical advancements that enhance the dining experience and the patrons’ perception of the brand are referred to as the “Experience of the Future” (“EOTF”).
- Digital: To provide consumers additional options for ordering, paying, and receiving service, McDonald’s is improving its technological platform. This includes adding functionality to its global mobile app, installing self-service kiosks, and implementing tools that make curbside and table service possible.
- Delivery: In 2018, McDonald’s expanded its delivery service to more than 50% of its global restaurant network. For the first time in the United States, McDonald’s announced a partnership with Uber Eats in 2017, then in 2019 it added Doordash and GrubHub. These alliances are focused on the younger generation of consumers that prefer home delivery to pick-up as part of a strategy to stay relevant.
McDonald’s Competitive Advantages
McDonald’s competitive advantage is as follows:
- Its main advantage over competitors is its affordable costs. The company extensively uses economies of scale to get the cost advantage.
- It is renowned for its quick customer service without sacrificing the caliber of the service, staying true to the “fast food” style of its locations.
- Another significant component of the taste’s universality is its competitive advantage. The Big Mac essentially always tastes the same because the same ingredients are used in the exact quantities and the same cooking methods are utilized worldwide. Such constancy in flavor will increase customer loyalty.
McDonald’s is a business that has a long history. Its success is entirely founded on an in-depth analysis of both internal and external market dynamics. It has conducted a study on a country’s people’s behavior, culture, purchasing power, and social issues.
In order to achieve the highest production in the shortest amount of time, it has given particular consideration to the location of the company, its interior and exterior outlook, and the types of technologies it will utilize. The most important aspects that it focused on were the quality and market factors that directly affected the company.