麦当劳与其竞争者肯德基汉堡王赛百味必胜客战略分析前景发展.doc

Case analysis

I) McDonald’s Corporation in the New Millennium
l Background
l Major competitors in the hamburger and non-hamburger segment
II) The strategy of McDonald’s
III) The strategy of competitors
IV) Question Analysis

10工商六班
背景分析：韩淑宇 黄宽 谷昌坤 李颜夕 凌玉雪
问题分析：李颜夕 黄宽 谷昌坤 赵亮
制作报告：庞路畅 黄宽

McDonald’s Corporation in the New Millennium
1. Background:
Dynamic market expansion, new products, and special promotional strategies had made McDonald’s Corporation a leader of the fast-food industry. However, sales growth in the United States had slowed to below the industry average in recent years. Major competitors in the hamburger segment of the fast-food industry in order of annual sales are McDonalds, Burger King, Wendy’s and Hardees. Three of the major competitors offering non-hamburger fast foods are Pizza Hut, Kentucky Fried Chicken and Taco Bell.
In the fast-food industry, years of profit drains and flat sales are driving fast-food chains to find new marketing strategies to compete In a mature market. There are some industry features appearing in recent years.
1) They are trying to increase the speed of drive-through delivery. Strategies include using timers to encourage employees to prepare and deliver food faster, training employees in faster food preparation methods, having separate kitchens and food preparation facilities for drive-through customers, and even wind-shield responders that automatically bill customers.
2) A growing trend is the move by customers to non-hamburger sandwiches. Prepared meals and sandwiches available in supermarkets, convenience stores, and gas stations are competitors to the variety of microwave meals.
3) Another trend is the recognition of the importance of heavy users of fast-food restaurants. They are defined by some features and loyal to the fast food. Their spend occupies a lot in the sales.
4) A major change in the fast-food industry is the increase in the fast-casual segment. Some chains offer deli sandwiches and meals that are more upscale than traditional restaurant
5) Americans are eating out less often compared to previous years a s.nd eating habits are changing. On the one hand, the recession is a reason that cut the cost of people’s daily life. On the other hand, many younger consumers are getting tired of fast food and are thinking about their health.

McDonald’s has three major competitors in the hamburger segment.

1) BURGER KING CORP.: It is developing a more permanent marketing strategy and moving away from its previous tactical approach, which revolved around the monthly changes in menu items and deals. It offered a new salad line and a permanent array of value-priced offerings.
2) HARDEE’S: The industry’s No.4 burger chain, had dominated management’s attention in its conversion of Hardee’s to a format called “star Hardee’s”. The company attempted to reverse sliding sales by introducing new items on the menu and joining the price- promotion burger wars.
3) WENDY’S INTERNATIONAL: At least part of the growth is attributed to Wendy’s line of four upscale salads called “Garden Sensations”. Wendy’s planned 30 percent boost in media outlays and in-store operations.

McDonald’s has major competition in the Non-hamburger segment.
1) PIZZA HUT: It scored a major success with its P’Zone , a portable, calzone-like item that company officials called “the pizza that actually sold out in test market.”
2) KFC: Its recent strategies included a “Kids Lap Top Pack” meal program, to attract more kids and families to its food offerings.
3) TACO BELL: The dramatic rebound in sales were due to a strategy shift to higher-priced products.

The strategies of McDonald’s
1) While McDonald’s and most other hamburger chains continue discounting and offering a variety of new products to attract customers, they also seek to shed their “cheap and greasy” image with new store designs. McDonald’s accelerated plans for “New Taste Menu” items. Different kinds of food were created like Italian-style burger. McDonald’s advertising message focused on tasty and nutritious food, friendly folks, and fun.
2) drive-through
To increase the speed of drive-through delivery, the company use timers to encourage employees to prepare and deliver food faster, training employees in faster food preparation methods, having separate kitchens and food preparation facilities for drive-through customers, and even windshield responders that automatically bill customers. Drive-through sales are expected to increase the sales of McDonald’s.
3) The company invested heavily in improving its public image. McDonald’s annual Charity Christmas Parade and its Ronald McDonald’s House charity provide the company with a positive image.
4) McDonald’s opened McCafe with expectation that the gourmet coffee shop would move it closer to its goal of doubling sales at existing U.S. restaurants. The menu features a selection of specialty drinks, aiming to appeal more upscale people.
The strategies of competitors
1) non-hamburger
Sales in a number of non-hamburger fast-food restaurants like KFC have grown faster. A growing trend is the move by customers to non-hamburger sandwiches. Supermarkets, convenience stores, and gas stations are competitors’ markets.
2) fast-casual
Restaurants like Boston Market offer deli sandwiches and meals that are more upscale than traditional fast food, served in nicer restaurants with more comfortable surroundings, but faster than in traditional restaurants. This market share is growing faster and fast-casual seems to satisfy all customers.
Question Analysis
1）How are customers’ tastes changing in the fast food industry? What impact do these changes have on McDonald's?
Customer tastes change has been a part of Hamburg to other products, because the other competitors ( part in Hamburg ) has introduced innovative products, such as Burger King provided a new salad line, more than 10 new products unveiled. Hardee's company to lower its price replaces the new menu, with French fries and soft drinks. Wendy's product s includes salads, chicken sandwiches. Macdonald mainly for Hamburg, competition the company's new products to attract customer’s consumption thus reduced to the Macdonald Burger’s purchase. In non-Hamburg, competitor itself has a large advantage such as pizza hut, occupies most of the market share, this is Macdonald can't match. KFC introduced child meal. All these will lead to Macdonald's sales will decrease

2） How well are these changes in customer tastes and preferences being reflected in competitive strategies in the industry?
Since the consumer tastes and preferences change affecting the industry competitive strategy, is mainly the difference strategy, industry and non-Hamburg Hamburg industry should launch for different groups of products, such as Hardee Company for the French choice of restaurant out of French fries and soft drinks. KFC aimed at children package design. Differentiation strategy is: customer demand for the product and application requirements are varied, whereby customers have different requirements; technical change quickly, the competition on the market is mainly concentrated in the constant introduction of new products, a strong marketing capability; various sales channels, strong cooperation.

3)What are Macdonalds strengths and weakness and what conclusions do you draw about its future?
The strengths and weakness of the strategy
1) The strategy to reverse the image of “cheap and greasy” is important and necessary to meet the trend of the general public. Because more and more people pursue a high quality life style, they need a healthier eating habit. The “New Taste Menu” provides not only the delicious food but also the balanced diet. With the help of ads focusing on nutritious, McDonald’s can do better in the future.
2) Increasing the speed of the drive-through delivery may be good to the sale in the U.S. In the market in the developing countries, the drive-through delivery is not that popular, so McDonald’s should seek other solutions.
3) Since 1984, Ronald McDonald House Charities of El Paso has been providing ‘a home away from home’ for hundreds of families with seriously ill children who are undergoing treatment in nearby hospitals. In addition to providing lodging and love, RMHC of El Paso has also been a steward of goodwill in the border region, helping to develop and support programs/services that directly improve the health of children in this community. The charity activities in china may leave a positive image to the public.
4) The stretch to the MacCafe is a good choice. It can help McDonald’s get rid of the “traditional fast food” image. Although McDonald’s want to enhance an upscale coffee shop, MacCafe shares the same entrance with McDonald’s. It don’t separate the higher and the lower clearly, which may cause the decline of the upscale customers.

4)Should Macdonald’s develop a separate strategy for the heavy user segment of fast food industry?

I think we should give excessive heavy users develop additional strategies. Heavy users have their own brand loyalty, and nowadays, heavy user group is growing, to retain these customers are useful for Macdonald’s. Macdonald’s only needs to develop a series of nutritious lunch for matching, on basis of right price, expanded the consumption, It might be a good lunch choice for heavy users.

5)What should Jack Greenberg do to grow sales, profits, and market share at macdonald's ?

To expand sales, increase business either from the following three aspects:
1 looking for new customers; 2 increase each transaction sales average; 3 to existing customers more opportunities, so that they come with increased frequency. Any of the above improvements will increase sales. However, once planned to systematically improve all of the above three aspects, then your business will be increasing by the day. Even if the Macdonald know exists in industry of new competition foundation, still need to have the original find in these new areas for competition in the best way. That is to say, the Macdonald should know in these stages listed sites needed product design, product positioning and product characteristics, in order to better competition.
In brief, Macdonald should do these :
Short term can depend on sales promotion, publicity;
Long term needs of products from the development, production, control and the personnel of the Macdonald, the aspects to improve the system
1) Invest in health menu
In order to solve the unhealthy meal issue, we suggest McDonald’s invest more capital in health menu development, exploit new product like 0 grams Trans fat burgers and provide them in worldwide McDonald's outlets.McDonald’s should launch a healthy fast food revolution, including selection of low-fat ingredients, balancing nutrients in its products and testing those new menus before promotion.
2) Expand in Asia and Latin America markets
We suggest McDonald’s expand in Asia and Latin America market . It is high time for McDonald’s to transit its concentration to Asia and Latin America where it has little scale but great potential for a bigger profit. For example, McDonald’s should explore new franchise models that would give the company the ability to license restaurants within entire provinces in China, rather than city-by-city, which will cut down the cost of franchising and then promote the expansion.
3) Update menus with local eating habits and cultural conventions
McDonald’s has invested overseas market. In those overseas market, even a tiny ignorant of diversified eating habits and culture conventions may pose a negative effects on McDonald’s reputation. As a result, both the local franchisees and the headquarters should pay more attention on local eating habits and cultural conventions.
4) Differentiation and Upscale
Different themes or styles in different outlets will attract more customers and leave them distinct eating experiences. Providing more upscale and high quality food featured by high profit margin. The best example can be seen in Starbucks business. A cup of premium coffee can be sold at $4, profits from the single one cup of coffee can double its cost. The same principle can be applied in McDonald’s business. After providing McCafe, McDonald’s saw great profits increase. So, other products like hamburgers and juice can also boost McDonald’s future profits.