overview mcdonald's case study

McDonald's Corporation: The World's Leading Fast Food Chain [Case Study]

Devashish Shrivastava , Anik Banerjee

McDonald's Corporation is an American fast-food organization established in 1940 as a café by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a burger stand and later transformed the organization into an establishment; the Golden Arches logo being presented in 1953 at an area in Phoenix, Arizona.

Ray Kroc, a businessperson, joined the organization as an established operator in 1955 and continued to buy the chain from the McDonald's siblings. McDonald's had its base camp in Oak Brook, Illinois, and moved its worldwide base camp to Chicago in mid-2018.

McDonald's is worth $185+ bn today. It is the world's biggest eatery network by revenue. It was last registered to be serving 69+ million customers each day in more than 120 countries across over 39,000 outlets.

Although McDonald's is best known for its burgers, cheeseburgers, and french fries, its menu also includes chicken items, breakfast things, sodas, milkshakes, wraps, and sweets. In light of changing buyer tastes and a negative backfire on account of the wretchedness of its food, the organization has added mixed greens, fish, smoothies, and natural products to its offerings.

McDonald's Corporation's income originates from leases and charges paid by the franchisees. According to two reports distributed in 2018, McDonald's is the world's second-biggest private manager with 1.7 million representatives (behind Walmart with 2.3 million workers).

Here's bringing you the McDonald's company profile that will present to you McDonald's company overview, when was McDonald's founded, McDonald's growth over the years, about McDonald's, McDonald's owner name, founder of McDonald's corporation, McDonald's history and background, McDonald's case study marketing, and more.

McDonald's - Company Highlights

McDonald's - Startup Story and History McDonald's - Mascot/Logo McDonald's - Business Model And Market Strategy McDonald's - Target And Mission McDonald's - Growth McDonald's - Restaurants And Services McDonald's - Future

McDonald's - Startup Story and History

Richard and Maurice McDonald in 1940, opened the primary McDonald's at 1398 North E Street at West fourteenth Street in San Bernardino, California; however, it was not the McDonald's you know today. Ray Kroc made changes to the siblings' business and modernized it.

The siblings presented the "Speedee Service System" in 1948 by extending the standards of cutting-edge drive-thru eatery that their antecedent White Castle had tried over two decades earlier. McDonald's emerged with a delivery model where it made its food on a supply belt and delivered it within 2 minutes.

It looked like a fantastic and impossible eatery that had:

• Only burgers, fries, and shakes on the menu • No plates or waiters to serve the customers

However, when Ray Kroc came, he was astonished by the never-ending waiting lines that were there waiting for their orders from McDonald's.

Kroc was then 50 already and was selling milkshake mixers door to door. Ray Kroc had earlier tried his hand in many things but never had attained success in his whole life. He already worked as a musical director, pianist, and had also worked as a real estate guy, in the paper cup industry, and as a seller of kitchen appliances, but he couldn't hold on to one thing among them all. Thus, Kroc was a person who lived from paycheck to paycheck.

Kroc came to McDonald's to deliver an absurd order of 8 milkshake mixers for just one area. He wondered "why would someone want to make 40 milkshakes at a time?" This is why he drove to California, at McDonald's to see the place himself.

Seeing the huge demand for McDonald's burgers, fries, and shakes, Kroc sensed a huge opportunity. He soon pushed the founders of the store to embrace a franchise model. The McDonald's brothers who owned the business, were living a comfortable life then, getting rich by the day, and buying Cadillacs as they filled their pockets. They didn't have vision nor they were eager to expand. However, Ray convinced them and rushed to work, as soon as he did that.

He assumed the role by taking 2 major steps back to back:

• Mortgaging his house when he was already 52
• Opening 18 new outlets in the very first year

This has helped the company scale big time, and McDonald's now boasts of:

• Serving 2.3+ billion burgers a year
• Serving 39,000+ restaurants across more than 120 countries
• Being the 4th largest employer in the world
• Being the largest toy distributor in the world

Though it was Ray's idea and the expansion was promising, the McDonald's brothers made an unfair deal with him. Kroc was allowed only 2% of the profits. McDonald's being to scale aggressively but the founders of McDonald's wasn't really happy with Ray and his scaling. This is why Ray borrowed and bought them out for $2.7 mn, thereby becoming the 100% owner of McDonald's.

The organization attributes its success to Ray Kroc. Kroc later bought the McDonald siblings' value in the organization and was responsible for McDonald's overall reach. He was seen as a forceful colleague, driving the McDonald siblings out of the business. Kroc and the McDonald's siblings battled for control of the business, as recorded in Kroc's life account.

The San Bernardino eatery was torn down (1971, as indicated by Juan Pollo) and the site was offered to the Juan Pollo chain in 1976. This zone currently fills in as central command for the Juan Pollo chain, and a McDonald's and Route 66 museum.

With the development of McDonald's into numerous universal markets, the organization has turned into an image of globalization and the American lifestyle. Its unmistakable quality has additionally made it a regular point of open discussions about heftiness, corporate morals , and shopper obligation.

McDonald's - Mascot/Logo

The first mascot of McDonald's was a cooking cap over a burger who was alluded to as "Speedee" . In 1962, the Golden Arches supplanted Speedee as the all-inclusive mascot. The image of jokester Ronald McDonald was presented in 1965. Ronald McDonald showed up to promote amongst children.

On May 4, 1961, McDonald's initially petitioned for a U.S. trademark on the name "McDonald's" with the portrayal "Drive-In Restaurant Services". By September 13, McDonald's, under the direction of Ray Kroc, petitioned for a trademark on another logo—a covering, twofold curved "M" image.

Before the twofold curves, McDonald's used a solitary curve for the design of its structures. Even though the "Brilliant Arches" logo showed up in different structures , the present form was not utilized until November 18, 1968, when the organization was given a U.S. trademark.

McDonald's - Business Model And Market Strategy

The business and revenue model of McDonald's includes almost 37000 outlets which spread to more than 120 nations. Today, McDonald's is the biggest eatery network on the planet in terms of income.

Initially launched as a Drive-In Hamburger Bar, the idea was advanced in 1940 by The McDonald Brothers, Richard James (Dick), and Maurice James (Mac) McDonald. It was after the presentation of the Speedee Service System with shakes, fries, and burgers costing as low as 15 pennies that the McDonald Brothers started the establishment of McDonald's Hamburgers.

In 1954, Ray Kroc turned into the establishment operator of the McDonald Brothers. The main McDonald's eatery was opened by Kroc in 1955 in Des Plaines, Illinois, USA. It was in the year 1961 that the rights to the eating joint of the kin were obtained by McDonald's for a powerful total of $2.7 million.

You may likewise be astonished to realize that when the first McDonald's eatery opened, the extremely well-known McD french fries were eaten with no ketchup! The revenue model of McDonald's, the world's quickest developing food chain, is an interesting one.

McDonald's - Target And Mission

McDonald's endeavours hard to be its clients' "most loved spot and approach to eating". McDonald's plan of action is fixated on the ground-breaking strategy "Plan To Win", which is placed into requests around the world.

With the mission of "Quality, Service, Cleanliness, and Value", McDonald's has clung to each of these characteristics. Client experience is improved by the selection of five fundamentals: people, products, place, price, and promotion.

Additionally, McDonald's plans to give high-review nourishment, at effectively reasonable costs to individuals over the globe. The deals at McDonald's are furrowed through an efficient deals channel which guarantees remarkable consumer loyalty on all occasions.

Astounding Vision

When Ray Kroc opened the Original McDonald's in Illinois, he had a dream of expanding the franchise across the globe with more than 1000 outlets in the States itself. Remaining consistent with its guarantee, McDonald's widened its worldwide handle by opening joints outside the US as early as 1967.

The first international outlets were opened in Canada and Peurto Rico. By January 2018, McDonald's was situated in 120 nations and had about 37200 cafés with 1.9 million workers. It was serving more than 69 million individuals every day. At one point in time, McDonald's was opening a new outlet every 14.5 hours!

Significant Growth Strategy

McDonald's has clutched a promising development technique to serve customers and spread its wings. The presentation of the "Speed Growth Plan" in March 2017 enhanced the development of the business.

McDonald's development system depends on retaining, regaining, and converting. McDonald's strives to hold on to its old clients, recapture the lost trust, and convert easygoing clients into ordinary ones.

What's more, it has additionally embraced three quickening agents: digital, food delivery, and experience of things to control its monstrous development. It keeps on reshaping cooperation with clients and raising the level of consumer loyalty and experience through innovation and human endeavours.

Decent Variety

Monetarily, McDonald's has affected the world more significant manner than some other organizations. McDonald's adheres to the conviction "Decent variety is Inclusion" and doesn't leave a solitary opportunity to make each person from every network feel regarded. Its suggestion of "Decent variety is Inclusion" has affirmed its situation at the top position.

The McDonald's way of life revolves around the following: customer-obsessed, better together, and committed to lead. These coupled with its conviction has caused the fast-food chain to exceed expectations in the field of business enterprise and showcasing.

McDonaldization

McDonald's can appropriately be named as one of the best organizations to be involved in the worldwide system. The worldwide broadening of the McDonald's is regularly alluded to as "McDonaldization." Its accomplishment in more than 120 nations can be credited to its hierarchical structure.

The hierarchical structure of McDonald's mulls over expanding localization, and in this way, the entire plan of action of McDonald's is normally redone thinking about the mass intrigue in different nations.

Fruitful Acquisitions

The McDonald's Corporation Mergers and Acquisitions (M&A) have, since its inception, entertained itself with cautious acquisitions. Donato's Pizza which is a Midwestern chain of 143 eateries was obtained by McDonald's on 6 May 1999. Aside from securing Donato's, it acquired the Boston Market on 18 May 2000. Boston Market is a drive-through eatery chain that essentially focuses on home-style sustenance.

Supporting Employees

McDonald's doesn't, in any capacity, hamper the development of its workers. It bolsters its representatives in every possible way and empowers them to set up business systems.

At McDonald's, the work environment is brimming with positivity, connections are advanced, professional openings are supported, and business development is sustained.

Coaches, good examples, and backers are accessible at all times to direct the employees on successful initiatives, professional procedures, and prosperous business.

Engagement Of Community And Education

Aside from being one of the best good-quality fast food options, McDonald's investigates every possibility to endeavour for the network it serves. It effectively takes part in network administration and continues to have a critical effect on assorted networks.

The Global Diversity, Inclusion, and Community Engagement Team alongside its key accomplices have fabricated cherished relations with different network-based associations. McDonald's Hamburger University readies its workforce to maintain the multi-billion dollar business and worldwide initiative improvement programs.

McDonald's - Growth

McDonald's eateries are found in 120 nations and serve 69 million customers each day. McDonald's operates 39,000 restaurants/cafés around the world, utilizing more than 210,000 individuals as part of the arrangement. They help operate 2,770 organization possessed areas and 35,085 diversified areas, which incorporates 21,685 areas diversified to regular franchisees, 7,225 areas authorized to formative licensees, and 6,175 areas authorized to remote affiliates.

Concentrating on its centre image, McDonald's started stripping itself of different chains it had gained during the 1990s. The organization possessed a large stake in Chipotle Mexican Grill until October 2006 when McDonald's was completely stripped from Chipotle through a stock exchange .

Until December 2003, it likewise claimed Donatos Pizza, and it claimed a little portion of Aroma Café from 1999 to 2001. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Outstandingly, McDonald's has expanded investor profits for 25 back-to-back years, making it one of the S&P 500 Dividend Aristocrats. The organization is positioned 131st on the Fortune 500 of the biggest United States companies by revenue.

In October 2012, its month-to-month deals fell without precedent for nine years. In 2014, its quarterly deals fell without precedent for a long time, when its deals last dropped for the whole of 1997.

In the United States, McDonald's accounts for 70% of sales in drive-throughs. McDonald's shut down 184 eateries in the United States in 2015, which was 59 more than what they wanted to open.

Starting in 2017, the income was roughly $22.82 billion. The brand estimation of McDonald's is more than $88 billion; outperforming Starbucks with a brand estimation of $43 billion. The total compensation of the organization in 2017 was $5.2 billion; this worth saw an ascent of about 11% from the previous year.

McDonald's is, without a doubt, the quickest developing drive-thru eatery chain on the planet. In 2018, McDonald's developed as the most profitable inexpensive food chain with a brand worth nearing $126.04 billion. Also, the all-out resources of McDonald's were almost $33.8 billion.

The world's quickest developing cheap fast food chain partitions its market into four unique areas: U.S., International Lead Markets, High Growth Markets, and Foundational Markets and Corporate.

According to the report set forth by the organization in the year 2017, the market in the U.S. created the biggest measure of income at $8 billion. The International Leads Markets which includes Australia, Canada, France, Germany, and the U.K. created an income of $7.3 billion.

The High Growth Markets which incorporate China, Italy, Korea, Poland, Russia, Spain, Switzerland, the Netherlands, and comparative brought in about $5.5 billion in revenue.

The Foundational Markets and Corporate incorporate the rest of the business sectors. Furthermore, it additionally incorporates a wide range of corporate exercises. The income created by this section of the market represented roughly $1.9 billion.

McDonald's - Restaurants And Services

In certain nations, "McDrive" areas close to roadways offer no counter administration or seating. interestingly, areas in high-thickness city neighbourhoods frequently preclude pass-through service. There are likewise a couple of areas, found for the most part in the downtown locale, that offer a "Walk-Thru" administration instead of a Drive-Thru.

McCafé is a bistro-style backup to McDonald's cafés and is an idea conceived by McDonald's Australia (likewise known, and promoted, as "Macca's" in Australia), beginning with Melbourne in 1993. As of 2016, most McDonald's outlets in Australia have McCafés situated inside the current McDonald's eatery.

In Tasmania, there are McCafés in each eatery, with the rest of the states rapidly following suit. After moving up to the new McCafé look and feel, some Australian eateries have seen up to a 60% expansion in deals. There were more than 600 McCafés around the world some time back.

Create Your Taste

From 2015–2016, McDonald's attempted another gourmet burger administration and eatery idea dependent on other gourmet cafés, for example, Shake Shack and Grill'd. It was taken off without precedent for Australia in early 2015 and extended to China, Hong Kong, Singapore, Saudi Arabia, and New Zealand with progressing preliminaries in the US showcase.

In committed "Make Your Taste" (CYT) booths, clients could pick all fixings including a kind of bun and meat alongside discretionary additional items. In late 2015, the Australian CYT administration presented CYT servings of mixed greens.

After an individual had requested, McDonald's prompted that hold up times were between 10–15 minutes. At the point when the nourishment was prepared, the prepared group ('has') carried the sustenance to the client's table.

Rather than McDonald's typical cardboard and plastic bundling, CYT nourishment was exhibited on wooden sheets, fries in wire bushels, and servings of mixed greens in china bowls with metal cutlery. A more expensive rate connected. In November 2016, Create Your Taste was supplanted by a "Mark Crafted Recipes" program intended to be increasingly proficient and less expensive.

McDonald's Happy Day

McHappy Day is a yearly occasion at McDonald's during which a portion of the day's deals goes to philanthropy. The collections on this day go to Ronald McDonald House Charities.

In 2007, it was celebrated in 17 nations: Argentina, Australia, Austria, Brazil, Canada, England, Finland, France, Guatemala, Hungary, Ireland, New Zealand, Norway, Sweden, Switzerland, the United States, and Uruguay. As indicated by the Australian McHappy Day site, McHappy Day brought $20.4 million up in 2009. The objective for 2010 was $20.8 million.

McDonald's Monopoly Donation

In 1995, St. Jude Children's Research Hospital got a mysterious letter stamped in Dallas, Texas, containing a $1 million winnings McDonald's Monopoly game piece. McDonald's authorities went to the medical clinic, joined by a delegate from the bookkeeping firm Arthur Andersen, inspected the card under a diamond setter's eyepiece, took care of it with plastic gloves, and checked it as a winner.

Although game guidelines disallowed the exchange of prizes, McDonald's deferred the standard and made the yearly $50,000 annuity instalments for the full 20-year time frame through 2014, even in the wake of discovering that the piece was sent by an individual associated with a theft plan meant to cheat McDonald's.

McRefugees are destitute individuals in Hong Kong, Japan, and China who utilize McDonald's 24-hour cafés as transitory lodging. One out of five of Hong Kong's populace lives underneath the destitution line. The ascent of McRefugees was first archived by picture taker Suraj Katra in 2013.

McDonald's - Future

The reported objective is to source all visitor bundling from inexhaustible, reused, or ensured sources, reuse visitor bundling in 100% of eateries, and overcome framework challenges by 2025.

McDonald's turned into the principal eatery organization on the planet to set an endorsed Science-Based Target to lessen ozone-depleting substance emanations. It also joined the "We Are Still In Leader's Circle", driving activity to relieve environmental change.

McDonald's USA completed five years as the sole worldwide café organization to serve MSC-ensured fish in each U.S. area. It united with Closed Loop Partners to build up a worldwide recyclable and additionally compostable cup arrangement through the NextGen Cup Challenge and Consortium. Official pioneers called for atmosphere activity and offered arrangements at the primary Global Climate Action Summit (GCAS).

McDonald's co-facilitated the "Way to Greenbuild" occasion with Illinois Green Alliance at its new worldwide home office. The structure, a collaboration among Sterling Bay, McDonald's, and Gensler Chicago, got USGBC LEED Platinum accreditation.

McDonald's is establishing the tone for other inexpensive food organizations to pursue. Given the present want by numerous buyers to spend cash on organizations that are doing great on the planet, where McDonald's leads, others will pursue.

Who is the founder of McDonald's?

McDonald's was founded by Richard McDonald and Maurice McDonald on 15 April 1955 in California, United States.

Who is the CEO of Mcdonald's?

Chris Kempczinski is the CEO of Mcdonald's since Nov 2019.

Who is the owner of McDonald's in India?

In India, McDonald's is a joint-venture company managed by two Indians- Amit Jatia (M.D. Hardcastle Restaurants Private Ltd) and Vikram Bakshi ( Connaught Plaza Restaurants Private Ltd).

When was the fast-food chain McDonald's founded?

Mcdonald's was founded in 1940 in San Bernardino, California.

How much does a Mcdonald's franchise owner make?

An average Mcdonald's franchise generates $150,000 annually.

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How McDonald's Became The Benchmark For Fast Food

Table of contents.

The McDonald brothers developed a system to make it all happen. Yet we know them for Ray Kroc, who created one of the world's largest chains of restaurants, real estate and toy retailers, while 'outmaneuvering' the founders. 

Although McDonald's has not been the largest fast-food chain in the world since 2011, it is still the best-known brand. Even in Israel's Negev Desert, 100 kilometers from the nearest city, there is a restaurant, because franchising has given the company such a huge boost worldwide. 

A few key facts about McDonald’s:

• The Kellogg Company was founded in 1940. 
• McDonald’s and its franchise partners employ more than 200,000 people globally.
• McDonald’s reported $8.1 billion in sales by corporate-owned restaurants and $10.7 billion by franchise partners .
• The gross profit in 2020 was $4.7 billion .
• Global comparable sales decreased 7.7% in 2020 , mainly due to the COVID-19 pandemic.
• McDonald’s spent over $100 million on the international markets to boost marketing in hope of recovery. 
• McDonald's operates more than 39,198 restaurants in more than 100 countries around the world .

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You Don’t Sell Burgers! It’s A Real-Estate Business! 

The first burgers.

Richard (Dick) and Maurice (Mac) McDonald opened their first diner together, a hot dog stands in Monrovia, California, in 1937. Later, in 1940, they moved to nearby San Bernardino and opened McDonald's Bar-B-Que. Over time, the eatery became more popular and profitable, but the brothers realized they could cut a lot of costs if they rethought their concept. They developed a series of revolutionary ideas and strategic measures that proved to be closely linked: reducing the range of products, preparing ingredients properly, keeping potatoes warm with an infrared lamp, and building a kitchen where food could be prepared more quickly. They also encourage people to take their orders and target families rather than young people.

In 1948, the McDonald brothers closed a well-established restaurant and reopened it a few months later with a slimmed-down menu - and by then under the McDonald's name. They realized that most of their income came from selling burgers, so they reduced the selection to almost nothing. (To give you the full picture, the fries and milkshakes were replaced with French fries and patties for a short time.)

Effectiveness above all

Kitchen work was sped up by having only two things to bake. Washing up was also kept to a minimum, as the food was served in disposable packaging. In 1952, the restaurant was closed again for several months to remodel the kitchen so that food could be served more quickly and efficiently than before. The new kitchen and associated system allowed all orders to be filled in as little as half a minute. Since the operation was supported by the "fast system," it's not hard to guess where the term "fast food" came from.

McDonald's goal at the time was to get people to store there, but not to eat there, but to take something there. This was achieved not only by the packaging of the products but also by the fact that there was no built-in canteen in the first restaurant; if you did not want to take what you bought home with you, you could either eat your lunch in your car or sit on a bench nearby. For a while, they also experimented with serving drinks in cone-shaped cups that customers could not put down, which encouraged them to eat faster.

Thanks to this incredibly efficient and fast operation, they were able to sell burgers for 15 cents - about half the price of other places. The fast service, consistent quality, and low price amply compensated customers for the inconvenience. Soon, the McDonald brothers wanted to open more restaurants, but they were not nearly as successful as their first location. The reason was simple: they could not be everywhere; they could only be personally responsible for quality assurance at the first restaurant. At the same time, the oldest McDonald's still in operation today opened in Downey, California.

The arrival of Ray Kroc

The brothers realized that they did not necessarily have to open new locations themselves to expand, but that others would do it for them. So in 1948, they began to reform their business model and set up a franchise system. By 1954, they had sold the royalties from 21 franchises. 

1954 marked a turning point in the McDonald brothers' lives. To further speed up service, they ordered a new type of mixer that could ensure the preparation of multiple servings at once. The order put them in contact with Ray Kroc, a travel agent. Kroc was amazed at how efficiently the restaurant operated. He wanted to get into the business and eventually convinced the brothers to make him their franchise representative. From then on, he was in charge of who and where they could open new restaurants.

The new buildings were now built the way the McDonald brothers envisioned their dream restaurant. A clean, red and white exterior with a neon yellow golden arch on either side of the building attracts potential clients (aka bypassers) to the restaurant. The juxtaposition of these two golden arches became the familiar Meki logo, which also forms an "M," a reference to the initials of their name. It took on a similar look to today's image after Ray Kroc became the owner, or rather founder, of the company.

In 1955, Kroc founded the forerunner of today's McDonald's Corporation (McDonald's System, Inc.) and opened its first new restaurant. The first was followed by the second, the third, and within a year, the 18th. Kroc was entitled to 1.9% of gross sales for each of these restaurants, but under his agreement with the brothers, they were entitled to 0.5%. He could barely cover his expenses with the remaining amount. Then he met Harry Sonnenborn, who gave him a new perspective: McDonald's was in fact a huge real estate business.

Turn of events

Sonnenborn encouraged Kroc to buy the land on which he wanted to build restaurants and then lease it to operators. Kroc listened to him and took the biggest step toward owning the entire chain. This way, he received a steady stream of income and did not have to give any of it to the McDonald brothers. The latter, of course, was not happy about this situation. Everything in the restaurants had to continue to be done the way the brothers wanted, although Kroc tried to introduce several innovations. Finally, in 1961, Kroc bought out the brothers for $2.7 million. To raise this sum, he had to take out loans, 14 million of which he was later able to repay.

Years of rapid expansion

As part of the agreement, the brothers would continue to own the restaurant in San Bernardino, but they had to change the name because Kroc already owned the naming rights to McDonald's. So they continued to run the restaurant under the name "The Big M," but Kroc was upset that he could not have it. Soon after, he opened a Meki just around the corner from the M, which allowed the McDonald brothers to close the location in a few years. They probably regretted the deal for life, because, with their 0.5% share at the time, it would have guaranteed them $15 million a year until the late 1970s, while their heirs would have received $305 million in 2012. And Kroc probably got a good deal on that loan.

By 1965, the company was operating more than 700 restaurants. That year, they went public. McDonald's stock started at $22 a share, but within a week the price had risen to $49. By the end of the decade, they had 1,500 restaurants worldwide and has started at Sonnenborn's suggestion, they continued to own the land on which the Meccas operated. Now they are looking for new land with fairly high standards: it should be about 4,600 m2, with the possibility of building on 370 m2, and located on the corner of at least one, but preferably two, busy roads.

Also in 1965, the then very limited offer was expanded: the Filet-O-Fish sandwich was added to the national menu. The fish burger was invented to give Catholic customers a choice during Lent. In 1968, the Big Mac, the iconic double-decker burger, was introduced. The Egg Muffin was introduced in 1975, the Happy Meal in 1979, and Chicken McNuggets in 1983. Of these, the Happy Meal is perhaps the most interesting, as it has made McDonald's one of the largest toy sellers in the world: 1.5 billion toys are sold each year thanks to the Happy Meal.

Ray Kroc never stopped working for McDonald's until he died on January 14, 1984. To this day, McDonald's provides its customers with great-tasting, affordable food, franchisees and crew members with job opportunities, and suppliers with reliable ingredients and products.

Key takeaways

Successful market penetration does not always require a complete upheaval of the rules of the sector. The McDonald brothers did not invent any truly new dishes, but they did let awareness guide the design of their restaurants. So the number-one success factor for McDonald's is professional design and process management.

The second success factor is sales behavior. While other restaurants were slower to offer their products, the excellent policies encouraged employees to sell customers as many extras as possible. Even today, "go big" accounts for a significant portion of restaurant profits (industry rumors say 40%). 

The third approach is the real estate-based approach. The franchising system that Ray Kroc perfected is still used today, and we know from the annual report that the company makes more revenue from franchisees than it can generate itself.

The McDonald’s Products

Core products.

McDonald's core products include burgers, which typically consist of a slice of beef, cheese, and sauce sandwiched between two halves of a bun - in all combinations and sizes. The smallest product is the standard burger, while the largest is the Big Mac. The sandwiches are available with chicken and fish, as well as localized versions in many countries around the world.

Core products include French fries, which also come in a variety of sizes. In addition, the Happy Meal menu specifically for children, as well as shakes and soft drinks, continue to be an integral part of fast food restaurant menus in almost all countries. According to market research , an average McDonald’s menu includes around 145 items. 

Seasonal products

National holidays, Halloween, Christmas, or even Easter - whatever the occasion, McDonald's introduces new seasonal products every month in every country around the world. Some are country- or region-specific (for example, the foie gras sandwiches are made specifically for the European audience), but most products are available in other countries after a limited local testing period. 

Typically, a traditional product, such as a standard burger, is enhanced with additional ingredients (e.g., spices, additional meat, or a special design) to reflect the seasonal event.

Localized products

McDonald’s has achieved this global success through maximizing localization techniques and appealing to local audiences. The company manages the menus to fit culturally and socially accepted norms; tailoring their traditional Big Mac meals to suit a local audience with specific requirements.

• Argentina: McFiesta burgers are available at McDonald's restaurants in Argentina, which are quarter pounders with mayo instead of ketchup. There are typical US sides here like French fries and Coca-Cola. Consider getting ice cream in an Oreo cone for dessert.
• France: Typically, you'd find the McBaguette combo at Mcdonald's in France - a sandwich that is topped with two hash browns and includes breaded chicken, ham, and cheese. The 'Le McWrap' and the 'Le Menu Happy Meal' are also available. Try their apricot and lime macarons for dessert, or their cherry tomatoes as a side dish.
• Hungary: In Hungary, specialized seasonal menus are very common, both in terms of ingredients and appearance. This is also facilitated by the fact that, since 2019, Hungarian McDonald's restaurants have been managed by a centralized, Hungarian-owned company, while the American McDonald's company provides only the brand and franchise rights. Foie gras is a regular item on Hungarian menus, as is "Dotted McFlurry" (a cottage cheese-based ice cream) made in cooperation with a very popular local dairy supplier. ‍
• India: McDonald's has created the Maharaja Mac by substituting chicken patties for the traditional beef patties in its Big Macs. In India, cows are regarded as sacred animals, thus the reasoning behind this change. Indians also enjoy the Vegetable Pizza McPuff, a unique side dish. However, fries and Coca-Cola are just as popular here as they are everywhere else.

• Middle East: Specifically for Middle East dining, Mcdonald's has created the McArabia Pita, which is served with beef or chicken patties (pork is not allowed in the predominantly Muslim diet), onions, and tahini sauce. 
• New Zealand: Despite being removed from the permanent McDonald's menu in New Zealand, the 'Georgie Pie' is still available in some restaurants. With fries and frozen Coke, a square pie topped with steak and cheese is served.
• Sweden: Scandinavian countries tend to favor healthy diets, especially vegetarian food. McDonald's capitalizes on localization with its vegetarian McBean Patty. Served in a bun with lettuce, tomato, and sauce, it has cannellini and kidney beans, onions, green peppers, and carrots.
• Thailand: There is a Samurai Pork Burger on Thailand's national McDonald's menu, which is a pork patty dipped in teriyaki sauce with lettuce, onions, tomato, and mayonnaise. Besides the usual apple pie, you'll also find corn and pineapple pies that aren't available anywhere else.

Partnerships with other companies

• Coca-Cola: The story of McDonald's and Coca-Cola began in 1955 when the fast-food restaurant was looking for a soft drink supplier. The partnership has continued ever since, with Coca-Cola selling not only soda but also other products to the restaurant chain.
• Oreo: Oreo is a worldwide popular dessert brand that mainly produces biscuits. The filled biscuits have become so popular that McDonald's has become a major supplier of Oreo to Mondelez International. In most countries, the biscuit pieces are served with ice cream, but in 2019, McDonald's China team tested the market with a burger with spam and Oreo biscuits . (It was not a global hit.)
• Beyond Meat: The trend toward vegetarian diets is spreading like wildfire around the world, and McDonald's is no stranger to it. According to the BBC , the McPlant burger will be available in British and Irish outlets as early as next year. The beef patty, made with pea protein, is available in 10 restaurants in Coventry, England, in the first round since the end of September, and then throughout the United Kingdom next year. The product's main ingredient is made for McDonald's by Beyond Meat, a publicly-traded startup.
• Local suppliers: Whether we're talking about the US or any other country in the world, one of McDonald's main and most forward-thinking efforts is to source its ingredients from local suppliers. To ensure that the fish, meat, or burger bun is always made to the same standard, McDonald's applies incredibly strict and centralized guidelines. 

Healthy or not healthy?

The restaurant chain has made great strides in the area of healthy eating in recent years: think supply chain with only local suppliers or the introduction of gluten-free, lactose-free, and vegetarian options. The calorie content of a hamburger today is much lower than that of a burger from 1980. In addition, the McDonald's team places great emphasis on healthy living - and they are trying to recruit new colleagues who will promote this corporate image. But that's just one side of the big picture.

A very interesting post came to light in 2008 when Karen Hanrahan revealed a shocking picture. Out of curiosity, she had set aside a McDonald's burger she bought in 1996 to see how quickly it would disintegrate (since there were theories about "plastic" foods in the past). After 12 years, the burger looked exactly like the one she had just bought, except it had shrunk a bit.

Although this is not part of the company's strategy, the following sources have been criticized the company:

• Jamie Oliver and his legal battle against the company
• Super Size Me , a movie in which the protagonist eats only McDonald’s products 
• In 1986, Greenpeace distributed flyers against obesity, naming McDonald’s among the ones responsible.
• There are also a lot of myths (most of them already busted) around the company’s procedures and products.

The product portfolio is the company's strength, so it's no wonder McDonald's is constantly improving and perfecting its recipes. Although the company has yet to build its healthy food image, its fast service and delicious, robust flavors win over millions of customers every month. 

The range includes flagship products available in all restaurants (except were banned for religious or legal reasons). These include traditional burgers, fries, and cola.

The company also diversifies its menu with seasonal and localized items. In the latter category, offerings vary from country to country and region to region, usually in partnership with local businesses and brands.

Franchise System

What is a franchise system.

Franchising has spread throughout the world not as a separate form of business, but as a special kind of business.

Franchising is a form of business based on close cooperation in which the franchisor or the owner of the system sells a complex system that has been carefully designed professionally and commercially in every respect and successfully tested in a market environment. The system is handed over to the franchisee with full training, branding, and ongoing support and supervision. Franchisors operate the franchise system to the specifications of the transferor, in the agreed territory, for a fee, for a fixed period.

McDonald’s Franchise Costs & Requirements

When purchasing an existing restaurant or a new restaurant, an initial down payment of 40% is required. Down payments must be made from non-borrowed personal resources, such as:

• cash on hand
• vested profit sharing
• business or real estate equity

The down payment amount will vary depending on the total cost of the restaurant. McDonald's generally requires $500,000 of non-borrowed personal resources before considering a new franchise partner. With less cash available, most opportunities to participate in the program are limited and depending on the transaction's specifics, financial requirements may be much higher. Additional or multi-restaurant opportunities may be more available to those with additional funds.

Franchise financing

To purchase a McDonald's restaurant, the buyer must pay a down payment of at least 25% cash. It is possible to finance the remainder of the purchase price for a period of up to seven years. Although McDonald's does not offer funding the project, McDonald's Owners/Operators benefit from established relationships with many national lenders.

Franchise - Ongoing Fees

• Service fee: Currently, a service fee of 4.0% of monthly sales is based on the restaurant's sales performance. 
• Rent: Rent that is based on a percentage of sales monthly.

Other costs of setting up a new franchise

Costs usually range from $1,2 million to $2,2 million. Most of the costs are related to the construction of the restaurant, such as building and interior design, but the franchisee also pays for equipment, furniture, and kitchen appliances.

General franchising strategy in 2021

McDonald's restaurants provide quality food and beverages in 119 countries, which are franchised and operated by the company. At year-end 2020, McDonald's will have 39,198 restaurants, of which 36,521 are franchised, or 93 percent.

McDonald's franchise restaurants fall into one of the following categories: conventional franchises, development licenses, and affiliates. Optimal ownership structures for restaurants, trading areas, and markets (countries) depend on a variety of factors, including financial resources and entrepreneurial abilities, as well as legal and regulatory frameworks in key areas such as property ownership and franchising. McDonald's business relationship with independent franchisees is governed by standards and policies, which are of fundamental importance to the company's performance as well as its brand protection.

McDonald's franchise partners are not financial investors, but committed partners who not only put up the capital to open a restaurant, but are also willing to participate in the day-to-day operations and running of the restaurant. They know all the ins and outs of the business, but they also reinforce the McDonald's brand through their involvement in the local community.

The potential partner does not have to have a suitable location, as the location of the restaurants is always determined by the company and handed over to the franchisee.

The Company’s Old/New Strategies

Accelerating the Arches is the Company's new growth strategy for 2020. As the leading global omnichannel restaurant brand, McDonald's Strategy encompasses all aspects of the company's business as well as updated values and new growth pillars that leverage the company's competitive advantage.

Growth Pillars

• Marketing: Investing in new, culturally relevant marketing approaches to effectively communicate the brand's story, food, and purpose. Customers will be provided with more personal services through enhanced digital capabilities. 
• Products: Focusing on serving delicious burgers, chicken, and coffee. Chicken and beef will be the company's primary focus as they represent the largest growth opportunities. McCafe’s brand, experience, value, and quality will be leveraged by the markets to drive long-term growth for McDonald's.
• Digital, Delivery, and Drive-Thru: McDonald's plans to accelerate technology innovation to meet the needs of customers as they interact with the company.
• Digital Experience: Known as "MyMcDonald's", the new digital experience platform will transform the company's digital offerings across drive-thru, takeaway, delivery, curbside pickup, and dine-in options. Through the digital tools available on the platform, customers will receive tailored offers, will be able to enroll in a new loyalty program, and will have the option to order and receive McDonald's food using their preferred channel. 
• Delivery expansion: McDonald's has expanded its delivery service to nearly 30,000 restaurants in the last three years and plans to expand further.
• The increasing importance of Drive-Thru: More than 25,000 restaurants globally have drive-thrus, including nearly 95% of the over 13,000 in the U.S. This channel has gained in importance since the COVID-19 outbreak, and leadership expects that it will play an even greater role as customers demand more flexibility and choice. In the U.S. and International Operated Markets, the vast majority of new restaurants will have a drive-thru. In addition to automated order taking, the Company plans to test a drive-thru express pick-up lane for customers with digital orders and a restaurant concept that offers drive-thru, delivery, and takeaway only for customers to enjoy a faster and more convenient experience.

For decades, McDonald's sales efforts focused on the cash register and drive-thru. One of the strongest elements of this was the introduction of the "Go Large" theme. By sizing and pricing the products, even those who had no real need chose the largest product, believing it to be the best and most appropriate offering. 

Today, in addition to physical sales, digital sales have become a priority. An app developed by the company not only speeds up the ordering process but also offers additional discounts that can further increase the cart value per customer.

With the introduction of home delivery, McDonald's has begun working with several partners including UberEats, FoodPanda, and Wolt. For a long time, these online marketplaces did not offer fast food products like McDonald's, but they have now become serious players in the market. The company's offering is particularly strong when it comes to speed: on average, food is delivered in 15-20 minutes, compared to 50-80 minutes for a traditional restaurant.

There are several cornerstones of the company's marketing strategy that have contributed greatly to McDonald's success:

• The Ronald McDonald figure: An owner of a McDonald's franchise introduced Ronald McDonald in 1967. To appeal to children, franchise partners decided to use a clown icon as an advertising tool. 96% of American children knew the name Ronald McDonald by 1973. Ronald McDonald is the second most recognizable fictional character among US schoolchildren, behind Santa Claus.

• The McDonald’s logo: There's no doubt that McDonald's golden arches are one of the most recognizable logos in the world. It was created in 1940. During the '60s, McDonald's decided to simplify their logo and focus on branding the company. A brilliant move was choosing the golden arches as the logo for the fast-food restaurant. The McDonald's logo looks very much like two golden-brown French fries bent into a letter M, and this is one of the most effective design features of the logo. McDonald’s is advertising one of its most popular menu items without viewers even noticing it.

• “Para PaPa Paaaa… I’m lovin’ it”: McDonald's has been using this jingle for a very long time. McDonald's jingle highlights a positive dining experience. The musical theme makes the diners feel at home during their meals there, as well as conveys how friendly and helpful the staff is.
• Promotion campaigns: Television advertising has become a favorite field for all fast-food restaurants with the proliferation of TVs. To this day, McDonald's is a loyal advertiser on channels aimed at children and their parents. Its campaigns focus on delicious food, fun, natural ingredients, and health. 

The company is one of the biggest innovators in the food industry and is credited with inventing or perfecting the following:

• McDonald's put in place order-taking kiosks in 2015, making it one of the first fast-food chains to do so. A touchscreen machine located near the front of restaurants lets customers place their orders without the need for a cashier.
• The introduction of specialty coffee at McDonald's changed McDonald's from a fast-food restaurant to something more. McDonald's introduced its specialty coffee line in mid-2007.
• The company separated a part of larger restaurants and re-branded it as McCaffes, a place where customers can buy coffee and desserts. Now it competes with Starbucks for coffee-lovers.
• McDonald's was one of the first fast-food chains to organize even the smallest details of its operations in a manual. This manual is still being improved today.

The 2020 growth plan contained nothing new compared to the path taken a year earlier. The key elements were digital customer access, which was a key driver of the company's continued growth during the COVID epidemic.

Sales and marketing go hand in hand at McDonald's: over the past 80-plus years, the techniques used have been perfected, all aimed at getting customers to buy. Advertising builds on this image of cheap and healthy food.

Final Thoughts And Key Takeaways

Growth by the numbers.

McDonald's has seen steady growth since its founding. Because of the relative cheapness of its products, it is a truly crisis-proof company, which even COVID could not bring to its knees - unlike millions of small catering businesses.

The company has emerged from the crisis as a winner, thanks in particular to digital developments, drive-thru, and the spread of home delivery.

Key takeaways from the McDonald’s story:

• Real estate business: The McDonald's business model has evolved from a restaurant to a complex system in a relatively short period, with some revenue coming from franchise fees, some from land leases, and some from food sales. 
• Thoughtful processes: While other restaurants are constantly experimenting with food, McDonald's has focused on improving its production technologies from the beginning. In addition to innovative machinery, internal processes have also been organized to ensure that products reach customers as quickly and consistently as possible.
• Franchise system: Behind the amazingly dynamic growth of McDonald's has been a well-constructed franchise system, the foundations of which were laid by the McDonald brothers, but perfected by Ray Kroc. 
• Core, seasonal and localized products: The main feature of the company's product range is that it is extremely consistent, as we can also get fries and cola in the farthest corners of the world. At the same time, local companies, at their discretion, can launch the menu with seasonal and localized products, enabling them to engage their customers even more.
• Strong marketing: Mcdonald’s has consciously built up the dining experience - regardless of whether we’re eating a hamburger in the car, in a restaurant, or at home. The logo, the iconic clown figure, the company’s theme song, the packaging, the internal design, and many other elements add up to become an unforgettable experience.
• Home delivery: Delivery was the largest innovational step from McDonald’s for decades, and partnering with food delivery startups, like UberEats or Wolt helped the company not only to survive the pandemic but get in shape for rapid growth.

Consumer opinion on McDonald's is certainly divided: some say it's plastic, others say it has grown up to meet consumer expectations. As a publicly-traded company, the owner of the golden arch has no choice but to march forward, pioneering innovation as it has throughout its history. What does the future hold for the company? An even broader product range, a stronger home, and digital experience - and, investors expect, continued revenue growth.

Brought to you by:

McDonald's Corporation

By: Frank T. Rothaermel, John Kim

McDonald's newly appointed CEO Chris Kempczinski, who assumed office on November 4, 2019, is the protagonist of the case. With $21 billion in sales (in 2019) and 45,000 restaurants globally (thereof…

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• Publication Date: Nov 4, 2019
• Discipline: Strategy
• Product #: MH0065-PDF-ENG

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McDonald's newly appointed CEO Chris Kempczinski, who assumed office on November 4, 2019, is the protagonist of the case. With $21 billion in sales (in 2019) and 45,000 restaurants globally (thereof 27,000 in the United States), McDonald's remains the largest quick-service restaurant (QSR) chain. Attempting to be "everything for everybody," McDonald's fell victim to being "stuck-in-middle," without a clear strategic position. Kempczinski must confront several challenges if he is to return the company to its former glory, including: 1) How to balance the need to introduce new items while addressing "menu bloat"? 2) How to re-establish the reputation for quality products? 3) How to appeal to Millennials? 4) How to upgrade the customer experience through all channels and locations (in-store, delivery, and drive-through)? 5) How to reignite growth?

Learning Objectives

Vision, Mission, and Values; Core Competency; Business Model; Business Unit and Corporate Strategy; Industry and Competitor Analysis

Nov 4, 2019

Discipline:

Geographies:

United States

Industries:

Real estate industry, Restaurants and food service industry

McGraw-Hill Education

MH0065-PDF-ENG

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Jun 7, 2023

McDonald’s: Through the Golden Arches to Global Dominance

• Customer Experience (CX)
• Digital Management and Leadership

Written by Conor Ward

In marketing theory and analysis, we often stress that a brand is much more than just a logo. There are many factors involved when it comes to developing one that’s instantly recognizable (product offering, mission, tone, messaging and customer experience ). 

But, McDonald’s is a brand that’s inextricably linked to one particular brand element: its Golden arches logo. It’s a powerful and meaningful image, built up over decades that evokes familiarity and a sense of fun for many customers.

Let’s look at how McDonalds used marketing and innovation to become a leading brand in a competitive market. We’ll also look at some of the challenges faced and consider  how the company continues to modernize and adapt to embrace the changing digital landscape including artificial intelligence .

The Origins of Empire

Brothers Richard and Maurice McDonald  opened the first McDonald’s restaurant in San Bernardino, California in 1940. The restaurant’s early years’ success led the brothers to franchise their concept to further locations, and the Golden Arches logo was first introduced in 1953 in Phoenix, Arizona.

Ray Kroc, a Chicago native and distributor of a milkshake mixing machine, visited the McDonald brothers in 1954, which led to him becoming their franchise agent. Kroc  ended up buying the rights to expand McDonald’s throughout the US.

How McDonald’s Built a Global Brand

Kroc’s ambition was to bring the company to a larger scale which he did largely through clever and creative marketing. 

Kroc - subject of the 2017 film The Founder - established a partnership with Coca-Cola in 1955 to be the McDonald’s beverage supplier, a key alliance which has endured to this day and helped drive both companies to global expansion.

One standout piece of marketing to drive this growth was the “Look for the Golden Arches!” campaign, introduced in 1960. With the logo gaining increased prominence and traction, this message was genius in its simplicity.

Ronald McDonald was introduced in 1965, and the character began appearing in advertising to target their audience of children, adding that all-important element of fun: albeit one that hasn’t continued so well into this century, despite going through a 2012 makeover.

The company ramped up its advertising campaigns during these years, involving major spending on media – TV, radio and newspapers – with billboards and outdoor signage also playing a role in building brand awareness. The emergence of McDonald’s as a major brand coincided with the golden era in TV advertising, and the company leveraged the medium to its advantage.

Another arena for brand exposure is McDonald’s ongoing sponsorship of sporting events, such as the FIFA World Cup, although their 41-year partnership with the Olympic Games ended in 2017 due to heightened competition, the need to fund menu changes and tech improvements along with bad press for selling ‘junk food’.

McDonald’s Braves Stormy Waters

The company has often been the focus of controversy over the years. As its power and prominence have grown, its business practices, environmental record, working conditions, and health issues have come under the microscope.

In 1990, activists from a small group known as London Greenpeace distributed leaflets entitled ‘What’s wrong with McDonald’s?’, criticizing its environmental, health, and labor record. The company sued them for libel and the case turned out to be the longest running legal action of all time in the UK, referred to as the ‘McLibel’ case .

Morgan Spurlock’s 2004 documentary ‘Super Size Me’ claimed that McDonald’s food was contributing to the increase of obesity in society, and the company was failing to provide nutritional information to its customers. Just weeks after the film premiered, McDonald’s announced that it was eliminating the super-size option from its menu, and creating the adult Happy Meal. Aside from nutritional and health issues, McDonald’s has been a key target of the “Fight for $15” movement which started in the U.S in 2012 as a ground-level push from fast-food workers who started to walk off the job in an effort to raise the minimum wage. Their efforts have had some effect, with 22 million workers seeing raises, and the issue is expanding  into other sectors, like the “gig economy” and ride-share workers.

Modernization and Improving Image

Coming into the 21st Century, the company worked on addressing its deficiencies, improving its image and keeping up to speed with technologies. McDonald’s published its first ever Social Responsibility Report in 2002.

The tagline “I’m lovin’ it”, launched in 2003, has been a success, enduring in marketing campaigns ever since. Menu items continue to change according to health and environmental trends. The brand’s charity work is well known, like the ‘McHappy Day’ annual event and the Ronald McDonald House Charities. The corporate website highlights many areas of the company’s corporate and social responsibility , like climate action, beef sustainability, packaging, diversity, recycling and more.

Most recently—under the leadership of current CEO Chris Kempczinski—the brand rolled out its pivotal “Plan For Change”: an engaging and informative piece of content that outlines key objectives surrounding its revamped net zero emissions, sustainable food sourcing, efficiency, and inclusion and diversity initiatives.

Digital Transformation and Investment

“How do you transition from mass marketing to mass personalization? To do that, you’ve really got to unlock the data within that ecosystem in a way that’s useful to a customer.” McDonald’s CEO Steve Easterbrook

McDonald’s is in the midst of a digital transformation , adapting to new trends and leveraging technology to its advantage.

Pioneering AI decision technology

In 2019, McDonald’s purchased big data start-up Dynamic Yield Ltd, becoming one of the first global restaurant brands to integrate decision technology into its restaurants. 

By leveraging its AI technology, McDonald’s enabled personalization in its drive thru menu and in-store kiosk displays by showing relevant items based on factors such as the weather, time of day or regional preferences. While Dynamic Yield was sold to Mastercard in 2022, McDonald’s will continue to scale and integrate the technology to further enhance customer experience. 

However, some customers were not fans of this new software, Ren Adams (@resinsbiren) made a drive thru order only to have the passenger’s order who pulled up beside her also included! Other users have reported mishaps with the AI technology adding multiple orders or misinterpreting requests. 

Customer Loyalty

Its ‘My Rewards’ app is so successful that in 2021 alone it earned 100% more downloads than its main loyalty competitor, Starbucks.

By developing a cohesive eco-system based on automated technologies, the brand plans to drive extra loyalty from its existing customers while creating a far more bespoke experience by tracking key insights from digital menus, food collection points, and mobile app interaction.

Speaking on the initiatives, McDonald’s President and CEO Chris Kempczinski, explained:

“Digital changes everything. So today, with 90% of the customers coming into my restaurant, I don’t know who they are. I don’t know their prior purchase. I don’t know what their buying pattern is. As I get better and better visibility into that customer, I can actually track and identify their preferences over time.”

The idea here is not only to drive an immense level of personalization , but to also improve operational efficiency in a way that improves output as well as speed of service.

Driving centralization

McDonald’s has centralized its digital strategy for its social media accounts, simplifying their entire social operation, and allowing them to respond to customers in a personalized manner. 

The launch of McDonald’s global brand hubs , a series of offices around the world, employs a ‘follow the sun’ model of engagement to track and interact with customers in real-time, on a constant basis. With thousands of brand mentions a day to deal with, this forms a key part of the digital strategy.

Inspiring communications and campaigns

Recent advertising campaigns have focused on advances in customer experience and digital innovations, highlighting how the brand is making life easier for customers. 

The brand’s most recent forward-thinking campaigns include its artistic ‘McDelivery Pins’ print billboards, its star-studded influencer-led ‘Wanna Go To McDonald’s?’ initiative, and its quirky ‘Raise Your Arches’ campaign.

Spearheaded by British filmmaker, Edgar Wright, this stand-out video ad likens raised eyebrows to the famous Golden Arches.

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Amplified by the hashtag #raiseyoureyebrows, the campaign has earned droves of engagement from various channels.

By partnering up with trending celebrities for its Famous Orders collaborations - including its Travis Scott Meal and J Balvin Meal - McDonald’s has tapped deep into the consciousness of Gen Zers while boosting in-app loyalty exponentially in recent years. In fact, the app installs skyrocketed by 23% during the initial week of its big BTS Meal promotion. No small feat in such a saturated industry.

However, McDonald’s has reprioritized its advertising budget in a bid to get more value and efficiency from its spending. A reduction in overall ad spend (a drop from $98.7 million in 2014 to $63.8 million in 2022) as well as more focused campaigns has proved to be a winning approach.

Tapping into community

The lion’s share of McDonalds’ traffic comes from organic search, direct engagement, and paid advertising—but what’s particularly interesting is the fact that community platform Reddit is one of the brand’s most engaged social channels.

It appears that the colossal impact of its various marketing initiatives, irresistible consumer deals, and commitment to making change has resulted in an ever-growing online community where fans share thoughts, opinions, and insider McD’s hacks. 

This Subreddit provides the brand with access to no end of consumer insight for future marketing initiatives while offering an opportunity to connect with its audience on a personal level.

This video ad showcases McDonald’s ability to tap into memorable everyday moments to position the brand as a fast food purveyor for the people. With a wealth of content, from the funny and inspirational to the enlightening and educational, McDonald’s also earns healthy levels of engagement from its YouTube channel .

McDonald’s: Analysis and Final Thoughts

The digital revolution represents a major challenge for McDonald’s, a brave new world where it needs to adapt to remain strong and profitable. The company is showing that it’s up for that challenge, however, making some smart moves in order to stay ahead of the chasing pack. 

“Long-term vision and commitment to staying the course goes a long way. Too many digital transformation projects are launched with the flawed expectation of jam tomorrow. McDonald’s is chasing the digital secret sauce over a far more pragmatic time frame,” according to digital commentator Stuart Lauchlan.

Millions of people continue to engage with, and buy from, the company daily. It’s an incredible success story, and it will be interesting to see how this powerful brand will continue to evolve.

Published 2019, updated 2023

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Conor is a content producer and writer, and former Membership Content Executive at the Digital Marketing Institute. In that position he played a key role in building and managing an extensive library of specialist digital marketing content for the Membership platform. He is an experienced writer and editor, both for print publications and digital platforms, with a passion for content marketing, major brands and career topics. He can be found on LinkedIn here . 

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Table of Contents

Mcdonald's consumer profile, mcdonald's advertising strategy , promotion for broadcast, billboard ads, outdoor ambient marketing, mcdonald's digital marketing strategy, become a digital marketer in 2022, mcdonald's marketing strategy - a case study.

In 1940, California was where the first McDonald's opened. It became well-known quickly for its tasty hamburgers and friendly service. Eight years later, it was one of the first places to switch from traditional table service to fast food. It added new kinds of burgers and milkshakes to its menu. The success of the development led the company to sign its first franchise agreement in 1952, which led to rapid growth worldwide. The company runs about 40,031 restaurants worldwide, and sales in other countries brought in about $21.076 billion in 2019.

McDonald's marketing strategy has helped the company achieve the success it commands today. From the start of its growth, the company wanted to build strong brand recognition and market penetration to help promote its growing franchise business. As the company's number of customers grew, they did more research on demographics to help them target easily. McDonald's marketing strategy includes investing in online and offline marketing methods that spread its clear, brand-centered messages to a large audience and using other channels like its dedicated mobile app to reach and keep loyal customers.

Learn All the Tricks of the Marketing Trade

McDonald's has a wide range of customers because it uses mass marketing and has low prices at fast-food restaurants. Most of the chain's customers are between 35 and 54. Buyers, both men and women, often have low to average incomes. They are known as brand-loyal casual diners who spend an average of $7.79 each time they eat.

Many of these customers are parents of young children who like that the brand's atmosphere and food are good for families. This market group was first targeted in 1979 when Happy Meal, a set of children's meals with a free-themed toy, was introduced. 

McDonald's website wants to create a "pleasant, entertaining environment for everyone to enjoy." This shows how many different kinds of people it wants to attract. The brand does primary market research to determine how to market itself and make sure it fits the demographics of the people it wants to reach. McDonald's uses surveys and questionnaires in stores, on social media, and through its mobile app to find out how happy customers are with the food, service, delivery, and other things. McDonald's Community and other digital channels are always being watched to keep track of what customers say and do.

McDonald's spends a lot of money on billboards and TV ads. In 2018, the company spent nearly $1.5 billion on advertising in the US alone. Outdoor, TV, and radio ads aren't likely to reach many people, so digital marketing strategies are used to send consistent information to people who aren't likely to see or hear the ads.

McDonald's marketing strategy uses TV and radio to get the word out about its brand and promote new menu items, meal discounts, and charitable work. Its broadcast channels and times are chosen so that most people will watch or listen. In November 2018, when the NFL season was at its peak popularity, McDonald's is expected to have spent $52.9 million on TV ads in the United States. This shows the importance of the fast-food chain getting the most prominent broadcast ad positions.

McDonald's has a lot of traditional billboard ads, which have the same marketing goals and content as its TV ads. With billboards that range from static to digitally interactive and are placed in high-visibility, high-traffic areas, the company tries to keep its target demographic and other connected consumer groups thinking positively about its brand.

This is a great example of how multiple ways to promote the same goals can make the campaign more successful compared to campaigns that only use one method.

McDonald's also does creative and interesting outdoor ambient marketing. Ambient advertising is when promotional materials are put in places or on things that are very unusual or unexpected or that aren't usually used for advertising. McDonald's is using this type of guerrilla marketing to make more of an impact on customers. McDonald's campaign shows this for its "Massive McMuffin Breakfast." During the whole year of 2010, the company put up big paper takeout bags with the name of its new breakfast item on major streets in New Zealand. The unexpected and hard-to-miss image got a lot of attention from people walking by, as shown by the many photos of the scene people took and shared on social media. This helped promote the McMuffin breakfast.

The brand's street markings at pedestrian road crossings are another example. They are meant to look like fries sticking out of a McDonald's-branded package of fries.

Online advertising helps the brand reach its goals of building brand awareness and creating demand. The information used online is similar to what you might see in a McDonald's TV ad or on a billboard. However, both the language and the graphics are made to work best on the social media platforms used, such as Twitter, Facebook, and Instagram. By asking customers to post pictures of their meals online, McDonald's takes advantage of the growing food photography trend. In fact, between September 2018 and February 2019, 4,9 million logos of McDonald's were posted on Twitter around the world. This made McDonald's the second most pictured brand.

The company also works on search engine optimization (SEO), but its "organic" SEO method does better than "sponsored" promotion. As of December 2019, 90.7% of the search traffic to mcdonalds.com came from natural search results, while 9.3% came from sponsored keywords.

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McDonald's marketing strategy in the digital medium includes customer interactions through social media like Facebook and Instagram. The customers interact with the brand and with each other on social media. Also, the company offers various discounts and coupons through their social media pages and the company app. McDonald's was one of the few companies that performed well during the 2000s recession. The reason for the success was that the company communicated its strategy to the consumers.

McDonald's digital marketing strategy allowed the company to fight back rumours circulating on social media in 2018. The company got  a Long Term Excellence Award from the Marketing Society. The company responded directly to the allegations that it faced and was able to get its message out in the open. 

McDonald's marketing strategy across the various offline and online methods has allowed the company to maintain its leadership position in the fast-food business. The target audience is families that allow most of the population to feel comfortable at the restaurant. McDonald's marketing strategy across the digital channels helps the company communicate clearly and directly.

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McDonald’s Corporation Case Study Analysis

Overview of the case, definition of the problem, alternative solutions, selected solution to the problem, expected results and rationale for the solution, positive and negative results.

McDonald’s, the first food chain known for its strong performance in a very competitive industry is facing stiff competition from other firms. The firm’s breakfast offerings are not as competitive as they were before due to strong performance by products from other market players such as Taco Bell, White Castle, Dunkin Brands Group, Burger King and Starbucks.

These firms have new breakfast products which have been received well by consumers in different areas they are operating in. As a result, these firms’ improved performance in the industry has negatively affected McDonald’s market share (Jargon, 2014, p. 1).

McDonald’s poor competitive position can be seen through its declining sales and profit revenues in the past six months. This paper is going to discuss the main marketing issues that McDonald’s faces in its operations and how they can be improved to help the firm regain its competitive position in the industry.

McDonald’s weakening position in the industry is due to its failure to come up with effective marketing strategies that respond to the needs of young consumers. In the past, the firm’s breakfast offerings performed well in the market but it has been losing customers gradually to new firms.

Low innovation in the firm has made it difficult for the firm to attract new consumers who are willing to try out the product it sells in the market (Jargon, 2014, p. 2).

The firm has also failed to come with an effective product development strategy to help it sell new high quality products that satisfy consumers’ expectations. As a result, this has affected the company’s competitive position in the market because it has failed to keep up with modern market trends that are crucial for its long term performance.

The firm also needs to improve the relationships it has with its franchisees. They feel that the firm’s marketing strategies are not effective and fresh ideas are needed to help the firm regain its footing in the industry. In addition, they insist that more needs to be done to improve the quality of the firm’s operations in the industry.

The main actors that need to be analyzed are: McDonald’s, its competitors and franchisees. McDonald’s has not been able to come up with important strategic changes to help it maintain its market share in the industry. Other fast food firms have developed efficient market processes that are responsive to current consumer trends in the market.

Therefore, McDonald’s competitors have been able to institute higher operational standards that position them well in the industry (Jargon, 2104, p. 3). The firm has also been unable to develop beneficial partnerships with its franchisees. They feel that it needs to come up with innovative promotional strategies to attract new customers to sample its products.

McDonald’s faces various problems such as: a weakening brand, low sales, ineffective promotions and the inability to keep up with its competitors. The main problem the firm needs to address to solve all these issues is its marketing mix functions. The company needs to review the four P’s of the marketing mix which are: products, prices, promotions and place.

This will help the firm to improve the value of its internal systems of operations to help it attain high standards of performance in the long run (Bradley, 2010, p. 75).

In addition, the firm needs to understand issues related to the quality of service it offers that need to be improved to help it attain its objectives in the industry. This approach will help the firm to focus on priorities to regain its market share in the industry to help it register good performance in the long run.

Product improvements and developments are a crucial part of any marketing strategy. McDonald’s needs to carry out research to find out specific types products that customers prefer to consume for breakfast. This approach will enable the firm to stay in touch with its customers to anticipate their needs and expectations by providing products that satisfy them.

At the moment, the firm has failed to create appropriate menus that attract customers to make them more willing to try out its product offerings (Bradley, 2010, p. 79).

The pricing of products should be maintained at current levels to make customers have positive perceptions about the quality of products they are purchasing. This requires the firm to develop effective customer relationship management systems that increase the value of its products in the market.

Promotional aspects of operations need an overhaul to enable the firm to regain its competitive position in the market. The firm needs to rethink its strategy of offering customers give away products because this is likely to increase its costs of operations in the long run.

The current strategy of offering give away products has caused disagreements between the firm and its franchisees, a situation that is likely to have a negative effect on the firm’s operations in the long run.

In addition, the firm needs to look at the internal atmosphere in its outlets to find out if it is suitable for consumer’s eating patterns (Rue & Byars, 2003, p. 43). It may be compelled to redesign its restaurants to enable them to offer a memorable service experience to customers.

The firm needs to carry out market research to find out new products which can be introduced to improve its performance in the industry. The firm needs to test some of its product concepts in some franchises to find out how they are likely to be received by customers. This approach will enable the firm to evaluate how they are likely to perform in the firm in the long run.

The main benefit the firm will get out of this strategy is that it will be able to create new revenue streams for its operations and this will help to increase its profits in the industry.

The firm will also be in a position to establish relationships with new customers to make them more interested in consuming its products (Rue & Byars, 2003, p. 49). However, the main disadvantage associated with such a strategy is that the firm may end up experiencing losses especially if the new products do not appeal to customers’ interest effectively.

The firm needs to improve the quality of service it offers to its customers. It needs to come up with new ways of engaging with its customers to make them understand the benefits they can get from its services.

The firm needs to rely more on innovative technology solutions to market its offerings and attract young consumers in the industry. As a result, this will enable the firm to understand new market trends and how they affect its long term operations in the industry (Panda, 2008, p. 37).

The benefit of this approach is that the firm will be in a position to satisfy the needs of its customers because it will sell appropriate products that conform to specific market conditions. The disadvantage the firm is likely to experience from this approach is that it may take a long period of time before it yields positive results.

Another solution the firm needs to use is to change its promotional strategies. The firm needs to engage with people in their communities to make them have positive perception towards its operations. It needs to go out and conduct promotions in schools, colleges and other places to encourage young people to try out some of its breakfast products (Panda, 2008, p. 43).

This approach is likely to yield positive results in the long run because the firm will be able to understand how to elicit positive consumer sentiments that favor its products in the market.

The advantage of changing its promotional strategy will enable the firm to attract new consumer segments that are willing to sample its products. On the other hand, the main disadvantage associated with this strategy is that it may increase the costs incurred by the firm in its operations.

New product concepts will enable the firm to regain the market share it has lost to its competitors. The firm should consider using popular accompaniments with its products to make them more appealing to customers. As a result, this will help the firm to increase the value of its brand in the market to take advantage of new opportunities which exist.

In addition, the firm needs to develop new menus that attract consumers to make them more interested in various products that are on offer.

Customers should be given more consideration when new product concepts are developed to enable them to satisfy their needs and expectations (Salisbury, 2014). This approach will help the firm to increase the value of its brand in the industry making it well prepared to capitalize on various opportunities that exist.

The firm needs to differentiate services offered to customers who consume breakfast in its outlets. It needs to come up with new ways of appealing to their lifestyles. Moreover, the firm needs to find out conditions that exist in its restaurants to find out if they satisfy the high standards it has set for itself in its operations.

Customers’ perceptions towards a particular product are influenced by the quality of service they get whenever they consume it. Therefore, the firm needs to come up with ways of ensuring that its customers have positive experiences whenever they visit its outlets to consume breakfast (Salisbury, 2014).

This entails retraining its employees to ensure they offer prompt and high quality services to customers in different outlets. As a result, the firm needs to empower its employees to make them more willing to satisfy customers who visit its restaurants.

The firm needs to rebrand its breakfast service offerings to differentiate them from other products that are sold during the day. This approach will help the firm to direct customers’ attention to new quality improvements in its operations that make it stand out in the market. As a result, this will improve customers’ perceptions towards the firm’s products because they will feel that they connect with them on a personal level.

The firm needs to use focus strategies to increase the value of its important products in the market. In addition, the firm needs to redefine specific customer segments it will target with its new breakfast products. This will enable the firm to find out specific methods it can use to attract them. Consequently, the firm will be in a position to turn around its operations to by increasing its profit revenues (Vrontis & Pavlou, 2008, p. 299).

There has been an increase in the number of customers who are interested in consuming healthy diets that have low sugar and fat content. The firm needs to engage young people and make them aware about healthy diets it is going to offer for breakfast as part of its menu. As a result, the firm will be in a position to diversify its product offerings to enable it to attract new customer segments in the industry.

In the long term, this will help the firm to increase various sources of incomes for its operations to increase its competitive edge in the industry. Many people are conscious about what they eat due to the high increase in lifestyle diseases which are mainly caused by poor eating habits revenues (Vrontis & Pavlou, 2008, p. 301).

Therefore, this approach will help the firm to demonstrate that it takes seriously the health and wellbeing of its customers and as a result, it will be in a position to turn around its operations.

McDonald’s new product development strategy will help it take advantage of future opportunities in the industry. This will allow the firm to appeal to younger consumers to make them more loyal. As a result, the firm will be in a better position to grow its revenues to overcome the challenges it has been facing in the industry.

The firm’s business model will focus more on adapting to market conditions to increase its competitive advantage in the long run. As a result, this will enable the firm to use efficient methods to respond to external market conditions that have caused it to lose its market share to competitors (Marder, 1997, p. 47).

For a long time, the firm has focused more on standardizing processes in different markets where its operations are based. However, this strategy will enable the firm to be more flexible in its operations to enable it to achieve higher levels of service excellence in the industry.

An effective product development strategy will enable the firm to improve quality perceptions that are associated with its products in the market. As a result, the firm will be in a position to increase the value of its brand in the industry by ensuring that its operations focus more on customer service excellence.

More importantly, the firm will be able to institute learning processes that enable its staff to acquire new skills to make them satisfy customers’ needs and expectations (Marder, 1997, p. 52). This will increase revenues obtained by the firm from its operations in the industry. In addition, this will help the firm to share information with its franchisees regarding specific improvements that need to be made.

The rationale for this solution is due to the fact that the firm is losing its competitive edge in the industry. Therefore, this requires the firm to make its external and internal processes more innovative so that it can be well prepared to satisfy the needs of its customers in different markets. In addition, the firm’s current strategy has the potential of causing conflicts with its franchisees who are important stakeholders.

As a result, this solution will enable the firm to improve the relationships it has with its stakeholders to ensure that they understand the importance of its new strategies.

The firm needs to review the manner in which it conducts its operations by coming up with new ways of engaging young consumers (Kotler & Armstrong, 2007, p. 72). As a result, this will enable the firm to develop strong and reliable relationships with them and this will help it attain good long term performance in the long run.

The firm needs to implement effective brand management strategies to safeguard the product life cycle of their current and potential new products in the market. This approach will enable the firm to find out how to regulate the growth of its new products in the market to maintain high levels of interest from consumers.

The firm needs to be careful about fads that are driven by high levels of customer excitement which do not last for a long period of time. Therefore, the new product development processes must be guided by information obtained from the targeted customer segments in the market (Kotler & Armstrong, 2007, p. 75). This will to find out how its new products are likely to fare in the market in the long run.

Therefore, the firm needs to rely on forecasting tools to predict expected changes in consumer behavior that are likely to impact on the performance of new products which are sold in the market.

The firm also needs to be careful about becoming complacent in the industry after it starts to register good results from its operations. The firm should institute learning processes that make all employees and other key stakeholders aware about constant trends in the industry that have an impact on its operations.

As a result, this approach will help the firm to focus its attention on organizational priorities that affect the manner in which it performs its functions in the industry. Therefore, this will help the firm to come up with proactive solutions to various challenges it is likely to face in the industry in the long run (Kotler & Armstrong, 2007, p. 82).

Moreover, it is important for the firm to adopt risk management strategies to protect it against situations that are directly caused by poor financial performance. This will increase the stability of its operations in the industry in the long run.

McDonald’s needs to take urgent measures to protect its market share in the industry. The firm needs to develop new products that can satisfy the needs of its customers in the industry. In addition, the firm should come up with new service improvements to help its clients obtain high quality services from its operations. This approach will improve the firm’s advantage over its competitors in the industry.

Bradley, N. (2010). Marketing research: Tools and techniques. New York, NY: Oxford University Press.

Jargon, J. (2014, Apr. 20). McDonald’s faces sharper competition in breakfast battleground. The Wall Street Journal.

Kotler, P., & Armstrong, G. (2007). Principles of marketing. Upper Saddle River, NJ: Pearson.

Marder, E. (1997). The laws of choice: Predicting customer behavior . New York, NY: Simon and Schuster.

Panda, T.K. (2008). Marketing management. New Delhi, India: Excel Books

Rue, L. & Byars, L. (2003). Management: Skills and applications. New York, NY: McGraw Hill.

Salisbury, P. (2014, Feb 20). The globalization of “fast food”. Behind the brand: McDonald’s. Global Research. Retrieved from https://www.globalresearch.ca/the-globalization-of-fast-food-behind-the-brand-mcdonald-s/25309

Vrontis, D., & Pavlou, P. (2008). The external environment and its effect on strategic marketing planning: A case study for McDonald’s. J. International Business and Entrepreneurship Development, 3 (3/4), 289-307.

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McDonald’s SWOT Analysis

Before we deep dive into the SWOT analysis, let’s get the business overview of McDonald’s. McDonald’s is a fast-food chain founded in 1940 by Richard and Maurice McDonald in San Bernardino, California. Today, it is one of the world’s largest and most well-known fast-food chains, with over 38,000 restaurants in more than 100 countries.

The menu at McDonald’s includes a variety of items such as hamburgers, cheeseburgers, chicken sandwiches, french fries, milkshakes, and soft drinks. In addition to its standard menu, McDonald’s offers limited-time promotional and seasonal items.

McDonald’s has become known for its efficiency and consistency in delivering quick and affordable meals to its customers. It has also faced criticism for the nutritional value and environmental impact of its food and packaging, as well as for the treatment of its workers. In recent years, McDonald’s has made efforts to improve its sustainability practices and introduce healthier menu options.

How does McDonald’s make money from the franchise business model?

Here is the SWOT analysis for McDonald’s

A SWOT analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or individual. It involves identifying the internal and external factors that can affect a venture’s success or failure and analyzing them to develop a strategic plan. In this article, we do a SWOT Analysis of McDonald’s.

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SWOT Analysis: Meaning, Importance, and Examples

McDonald’s is a highly successful and iconic company with several strengths, some of which include the following:

• Brand Recognition : McDonald’s is one of the most recognizable brands in the world, with its distinctive golden arches logo and well-known slogan, “I’m Lovin’ It.” The company’s branding and marketing efforts have been highly effective in creating a strong and positive image for the brand. Marketing Strategy of McDonald’s that makes you “loving it”
• Global Presence : McDonald’s has a vast global footprint with over 38,000 locations in more than 100 countries, allowing the company to reach a broad customer base and take advantage of economies of scale.
• Strong Franchise System : McDonald’s operates using a franchise model, allowing it to expand rapidly while minimizing the risks and costs associated with owning and operating its own restaurants. The company’s well-established and highly effective franchise system has helped it maintain consistency and quality across its locations.
• Efficient Operations : McDonald’s is known for its highly efficient operations, with streamlined processes and systems that enable the company to serve customers quickly and consistently. This helps to minimize wait times and enhance the customer experience.
• Innovation : McDonald’s has been innovative in introducing new products and services to its menus, such as its famous McCafé line of coffee drinks and all-day breakfast. The company has also invested in digital technology and mobile ordering to enhance customer convenience.

Overall, McDonald’s strengths have helped the company become a global leader in the fast-food industry and maintain its position as a brand for many consumers.

While McDonald’s is a highly successful and iconic company, it also has some weaknesses, including:

• Health Concerns : McDonald’s has faced criticism for its food’s nutritional value and contribution to health problems such as obesity and diabetes. In recent years, the company has made efforts to introduce healthier menu options and reduce the amount of sodium and saturated fat in its food. Still, these efforts have not entirely resolved the issue.
• Negative Public Perception : McDonald’s has also faced criticism for its labor practices, including low wages and poor working conditions for its employees. This has led to a negative public perception of the company and calls for boycotts and protests in some regions. In 2021, McDonald’s cooks and cashiers in 16 cities in the US went on strike to demand the burger giant pay every worker across the McDonald’s system a living wage of at least $15 an hour.
• Dependence on Franchisees : While McDonald’s franchise system is a strength, it also means that the company is highly dependent on its franchisees for revenue and growth. This can create challenges in ensuring consistency and quality across all locations and managing franchisee relationships.
• Limited Menu Appeal: While McDonald’s is known for its signature items, such as Big Macs and french fries, some customers may view its menu as limited or lacking in variety compared to other fast-food chains.
• Environmental Impact : The company has also faced criticism for its environmental impact, including its use of single-use plastics and its contribution to deforestation by sourcing beef and palm oil.

Overall, McDonald’s weaknesses highlight the need for the company to continue to address issues related to nutrition, labor practices, and sustainability while maintaining its market position and profitability.

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Opportunities

McDonald’s has several opportunities for growth and expansion, including:

• International Expansion : Although McDonald’s already has a global presence, there are still many untapped markets where the company can expand. This includes emerging markets in Asia and Africa, with increasing demand for fast food.
• Health and Wellness Trends : As consumers become more health-conscious, there is an opportunity for McDonald’s to introduce new and healthier menu options. The company can also leverage its existing supply chain management and operations strengths to create more sustainable and environmentally friendly menu options.
• Digital Technology : McDonald’s has already invested heavily in digital technology, including mobile ordering and payment, which has enhanced the customer experience and streamlined operations. There is further opportunity for the company to innovate in this area and leverage data and analytics to improve its menu offerings and marketing efforts.
• Delivery and Convenience : With the rise of third-party delivery services, there is an opportunity for McDonald’s to expand its delivery offerings and increase convenience for customers. This includes exploring partnerships with popular delivery platforms and investing in its own delivery infrastructure.
• Partnership and Collaborations : There is an opportunity for McDonald’s to partner with other companies or brands to create unique and innovative menu offerings. This can include collaborations with popular food brands or local chefs, which can help to differentiate the company and appeal to new customer segments.

Overall, McDonald’s has several opportunities to continue to grow and evolve its business while addressing changing consumer preferences and societal trends.

McDonald’s faces several threats that could impact its business, including:

• Intense Competition : The fast-food industry is highly competitive, with several major players vying for market share. McDonald’s faces competition from other fast-food chains and emerging trends such as healthier eating options and plant-based diets.
• Changing Consumer Preferences : As consumers become more health conscious and environmentally aware, there is a risk that McDonald’s menu offerings may become less appealing. The company must adapt to changing consumer preferences and continue to introduce new and innovative menu options that align with these trends.
• Economic Factors : Economic factors such as inflation, changes in consumer spending, and currency fluctuations can impact McDonald’s business. Economic downturns or instability in key markets can also negatively impact the company’s revenue and profitability.
• Supply Chain Disruptions : McDonald’s depends on a complex supply chain to source its ingredients and products. Disruptions such as natural disasters, trade disputes, or supply chain breakdowns can impact the availability and cost of key ingredients, negatively impacting the company’s operations.
• Regulatory and Legal Challenges : McDonald’s faces regulatory and legal challenges related to labor practices, food safety, and environmental impact. Regulation changes or legal challenges can impact the company’s operations and profitability.

Overall, McDonald’s faces several threats that can impact its business. The company must continue to adapt to changing consumer preferences and societal trends, invest in innovation and technology, and address potential supply chain and regulatory challenges to remain competitive and profitable in the long term.

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• Harvard Business School →
• Faculty & Research →
• October 1992 (Revised September 1996)
• HBS Case Collection

McDonald's Corporation

• Format: Print
• | Pages: 22

About The Author

Joshua D. Margolis

Related work.

• October 2002 (Revised June 2005)
• Faculty Research

McDonald's Corporation (Abridged)

• McDonald's Corporation (Abridged)  

Fast and Pluribus: Impacts of a Globalizing McDonald’s

The expansion of McDonald’s in the twentieth century brought the fast food chain to more than 100 countries. But how well did it integrate into its new home(s)?

The connection between globalization and McDonald’s is a tale of scholarly metonymy. There’s no textual shortage of evidence that references the now-global fast food chain’s success in other countries , often linking it to themes of self-sufficiency, post-industrial stability, and democracy-formed capitalism.

Among these chunks of research is a more endogenous angle that examines the impact McDonald’s has had within offshore cultures; namely, how the American fast food model has been diffused across different countries. Such case studies, which look at individual cultural phenomena and their direct applications to globalization activity, refines not only the framework of McDonald’s in theories, but overall globalization processes and strategies as well.

Japan’s stylish renditions of fast food practices, for one, existed long before McDonald’s came to the country. Given the existing popularity of convenient and on-the-go meals—including conveyor belt sushi and street vendor meals—American fast food chains were bound to succeed. Scholars John W. Traphagan and L. Keith Brown investigate this supposition by employing an ethnographic model of research, building the argument that Japan not only assimilated—but basically swallowed whole—the McDonald’s dining model , to the point that younger people especially believe McDonald’s is a Japanese company.

Traphagan and Brown emphasize that, rather than “styles of preparation or ingredients,” fast food is defined by “a style of selling food.” Essentially, McDonald’s brought no real paradigm shifts to Japan—but rather constructed a space in which already-formed Japanese cultural practices could continue.

Their case study contrasts with that of geographers Ray Oldakowski and John McEwen, who similarly investigate McDonald’s and its cultural assimilation—but in Ecuador. Their evidence shows that the integration of American fast food dining followed a different path , and McDonald’s remains an obviously foreign establishment in the cityscape. McDonald’s didn’t attempt to adapt to Japanese or Ecuadorian culture (for McDonald’s, “the strategy has been one of consistency, i.e. McDonald’s prefers not to change its way of doing business to adapt to foreign cultures, rather, it changes local cultures to meet its own needs,” they note), but Ecuadorians clearly viewed the fast food chain as a deviation from local tastes, unlike Japanese consumers.

“[A] comparison of exterior designs revealed that the McDonald’s in Guayaquil [Ecuador] were very similar to the typical McDonald’s restaurants in the United States,” write the authors. Moreover, the menus were also similar. Only 2 percent of those polled considered the food served at McDonald’s similar to Ecuadorian food. In contrast, very few interviewees considered Kentucky Fried Chicken—another American fast food establishment—different from Ecuadorian food. Eighty-four percent reported that KFC was the most similar to Ecuadorian food, and 68 percent said it was actually where they dined regularly.

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“Those results suggest that McDonald’s might gain new customers, and more visits from existing customers, if they also offered menu items more typical of Ecuadorian food,” conclude the authors.

In neither Japan nor Ecuador did McDonald’s actively work to adapt itself to the tastes of the host countries, but the depth of integration into local dining customs differed between the two nations. Such observations could prompt additional nation-specific analyses and possibly reveal additional adaptations to the “strategy of consistency” associated with McDonald’s. However, the study of the globalization of fast food from a micro-cultural angle requires challenging assumptive attitudes around American businesses and classical theories, with one of the most popular—and infamously controvertible—examples being the Golden Arches Theory of Conflict Prevention , built on tropes of democratic peace through development. Globalization and its effects could also be examined in light of McDonald’s cultural impacts on its origin country of America, opening a conversation on socio-economics and class .

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McDonald’s Branding Strategy and Marketing Case Study

Analysis and examples of mcdonald’s identity, positioning, key messages, tone of voice, brand archetypes, customer benefits, competitors, and marketing content..

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Brand Overview

• Food Service

Business Type

Physical Products

https://www.mcdonalds.com

Target Customer

Classic Fast Food Consumers

Primary Need ( Job To Be Done )

Eat the same fast comfort food I’ve had my whole life

Brand Visual Identity & Content

Primary brand colors, brand typefaces, hero content.

Hero Content Type

Content features people, brand messaging, key messages, benefit or feature focus, tone of voice, brand archetypes.

( Learn More About Brand Archetypes )

Everyperson

Brand Positioning Strategy ( Elements of Value )

( Learn More About The Elements of Value )

Aspirational

Affiliation / Belonging

Sensory Appeal

Reduces Cost

Brand Benefits

Get nearly the exact same meal from any location around the world

Eat and share the same meals that I’ve had my entire life

Save money on a quick meal that fills me up

Competition

Key competitors.

Burger King , Wendy’s, Jack In The Box, Carl’s Jr., Chipotle , Arby’s, KFC, In-N-Out, Five Guys, The Habit, Taco Bell , Subway

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McDonald’s Supply Chain Issues – a Case Study on Supply and Demand Analysis

Is there a more iconic symbol of American culture than McDonald’s?

The fast-food industry has shaped the modern lifestyle, not only in the USA. McDonald’s Corporation is present in over 100 countries and has more than 1.7 million employees. There are a lot of helpful business lessons a student can learn from doing the McDonald’s case study .

• 🍔 McDonald’s Supply Chain
• 🥬 Case Study Ideas
• 🚚 Supply and Demand Analysis
• 📈 Supply Analysis
• 💊 Supply Chain Issues
• 📚 Demand Analysis
• 👍 McDonald’s Case Study – 30 Best Examples

🔗 References

🍔5 facts about mcdonald’s supply chain.

• A new McDonald’s opens nearly every 14.5 hours . McDonald’s supply chain management made the company the number one fast-food chain globally.
• McDonald’s has one of the best supply chains in the world . In 2016, it was ranked the second-best in the Top Supply Chains by Gartner.
• McDonald’s uses The Three-Legged Stool approach for franchising . The company’s founder Ray Kroc designed this method: the first leg is McDonald’s employees, the second is the franchise owners, and the third is the suppliers.
• Products are transported to McDonald’s restaurants by special cars . They are equipped with innovative temperature-control mechanisms. Check out our free essay samples to learn more about McDonald’s supply chain.

🥬 McDonald’s Case Study – Fresh Ideas

Various factors contribute to McDonald’s successful financial performance. Here’re some ideas to consider when doing the McDonald’s case study.

• Corporate culture.
• Vertical integration of the supply chain.
• International menu variations.
• McDonald’s inventory management system.
• Storage and distribution systems.
• Marketing principles.
• Recruitment practices at McDonald’s.
• Suppliers’ code.
• McDonald’s largest suppliers.
• The SWOT analysis .

🚚 McDonald’s Supply and Demand Analysis

• McDonald’s supply chain overview McDonald’s outsources 100% of its supply needs. The company grows its products through contracted producers and transports its own goods. McDonald’s supply chain promotes growth not only for the restaurants but also for the suppliers.
• McDonald’s consumers’ demands Most customers expect quick and simple ordering from McDonald’s restaurants. Having failed the experiment with pizza in the 1990s , McDonald’s has stuck to hamburgers, cheeseburgers, and French fries on the menu.
• McDonald’s model is a win-win relationship between the company, the suppliers, and the customers.
• Instead of looking for suppliers that offer the best price, McDonald’s maintains long-term relationships with existing ones.
• McDonald’s does not micromanage business partners in its business model.

📈 McDonald’s Supply Chain Case Study

• McDonald’s supply chain: sustainability McDonald’s aims to use natural resources to contribute to protecting the environment. One of the significant steps in this process is utilizing nature-positive supply chains. While trying to reduce their impact on nature, the company also develops a more sustainable global economy.
• McDonald’s supply chain: economics McDonald’s works with its suppliers to research and share the best practices to increase productivity and financial performance. The company aims to reduce hunger and provide decent jobs to its suppliers worldwide.
• McDonald’s supply chain: food safety Food safety is a serious responsibility of McDonald’s. To help with this, suppliers have special programs allowing them to track food in the supply chain. Moreover, McDonald’s approaches a Food Safety Advisory Council to educate its employees about food safety.

💊 McDonald’s Supply Chain Issues

• McDonald’s switching from frozen to fresh burgers Since 2012, McDonald’s has lost 500 million restaurant visits as customers have chosen more fast-casual alternatives that provide fresh burgers. For that reason, in 2018, the company announced that it was switching to fresh patties instead of frozen in its burgers at 300 U.S. restaurants.
• McDonald’s supply chain issues due to Covid-19 In 2021, McDonald’s lacked some bottled drinks across its 1,250 restaurants in Great Britain. This happened because of a shortage of lorry drivers due to Covid-19 restrictions and self-isolation rules.
• McDonald’s supply chain disruptions Supply chain disruptions can significantly impact McDonald’s financial performance and reputation. To reduce the negative impact, McDonald’s has multiple supply backup sources. McDonald’s has tested and trustworthy suppliers ready to help if a disruption occurs.

📚 McDonald’s Demand Analysis

• Menu and burgers at McDonald’s McDonald’s used to make the tastiest hamburgers in America. However, this award today goes to other fast-food restaurants, such as Shake Shack . To win back customers, McDonald’s needs to focus on improving the quality of its core products.
• Lower prices at McDonald’s McDonald’s customers are unwilling to spend more than $5 on a hamburger. McDonald’s has a simplified menu and self-serve ordering system to lower its prices. It is important to notice that organic food and high quality are not the first things consumers want from McDonald’s.
• Customer service at McDonald’s McDonald’s employees’ essential quality is having a passion for people. McDonald’s adopts a multi-channel communication system to ensure that all its messages from the customers are delivered to staff. McDonald’s collects feedback and complaints on its website to identify factors affecting the demand .

👍 McDonald’s Case Study – 27 Best Examples

Mcdonald’s supply chain issues.

• Food industry: McDonald’s company . This essay investigates McDonald’s price elasticity of demand for its goods and services and its supply chain.
• Mcdonald’s vs. Wal-Mart’s Strategic Choices . This paper compares the two successful American companies and their supply chains.
• McDonald’s organization: operation management . This report focuses on the key concepts of McDonald’s operations management, including supply chain management.
• Mcdonald’s entering Estonia case analysis . This study investigates how McDonald’s can enter the Estonian market successfully and build a trustworthy relationship with local suppliers.
• An external and internal analysis of McDonald’s Corporation . This paper conducts an external and internal analysis of McDonald’s Corporation and evaluates its supply chain management.
• Quality management in McDonald’s restaurant . This essay analyses the measures McDonald’s uses to ensure that all supply chain operations occur safely.
• Business strategy analysis of Mcdonald’s . This paper explores how McDonald’s supply chain supports its operations worldwide.
• McDonald’s and Wendy’s International Inc . This report focuses on the management, suppliers, and customers of the two competing companies— McDonald’s and Wendy’s.
• McDonald’s, Starbucks, and American International Group . This paper compares three selected public companies, focusing on their financial performances and supply chains.

McDonald’s Marketing Strategies & Advertisement Campaign

• McDonald’s and Coca-Cola ads in the Russian market . This essay explores McDonald’s and Coca-Cola’s ads’ impact on the Russian audience.
• Marketing analysis: McDonald’s company. This study explores McDonald’s marketing approach to maintaining the balance between price and quality.
• McDonald’s marketing strategies in the UAE. The report analyzes the marketing strategies of McDonald’s, as well as market descriptions and segments of the company in the UAE.
• McDonald’s company’s marketing strategies . This report presents an analysis of the internal and external environments of McDonald’s and reviews its marketing mix.
• McDonald’s company marketing practices and strategies . This paper looks at the most suitable market entry strategies McDonald’s can use to continue expanding to the international market.
• Business ethics and Social Corporate Responsibility for McDonald’s . This essay investigates how McDonald’s CRS policy contributes to the company’s marketing success.

McDonald’s Human Resource Management & Employment

• McDonald’s business principles: employment violations . This essay concerns the problem of the company’s ethics strategy and how McDonald’s tries to fix it.
• McDonald’s strategic management of human resources & innovation . This research contains an overview of McDonald’s human resource management and suggests how it can be improved.
• McDonald’s human resources management practice . This paper explores McDonald’s human resource management and its strengths and weaknesses.
• McDonald’s company: human resource functions. This research focuses on McDonald’s human resource issues.
• McDonald’s company H.R. management practices . This essay aims to demonstrate how McDonald’s efficient H.R. management practices benefit the company’s financial performance.
• McDonald’s Corporation’s talent management program . This paper provides details on McDonald’s successful talent management program.

Mcdonald’s Financial Performance & Market Influence

• McDonald’s company case analysis . This paper aims to assess the effects of McDonald’s operations strategy and its different perspectives on the company’s financial success.
• McDonald’s Corporation’s five forces analysis. This essay focuses on the five internal and external factors influencing McDonald’s performance.
• Microsoft Corporation and McDonald’s corporation: financial performance . This paper compares Microsoft Corporation and McDonald’s Corporation’s financial performance.
• McDonald’s accounting information system . This paper examines the accounting information systems at McDonald’s.
• McDonald’s company’s strategic management. This essay investigates how McDonald’s strategic decisions influence the company’s financial performance.
• Comparative financial statements of McDonald’s. This writing analyzes the financial aspects of McDonald’s over the recent years.
• Best Items on McDonald’s All Day Breakfast Menu – Business Insider
• The Supply Chain: From Raw Materials to Order Fulfillment – Investopedia
• 2022: Supply chains will face many challenges this year | World Economic Forum
• McDonald’s Is Using AI and Data to Optimize Its Supply Chain
• Demand and Supply Planning for a Large Fast Food Chain – AnyLogic Simulation Software

Descriptive Essay Topics: Examples, Outline, & More

371 fun argumentative essay topics for 2024.

• Study Guides
• Homework Questions

47201509 Christina Auduong MKTG3002 Case Study Analysis