McDonald’s Corporation Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

McDonald’s Corporation Case Study Help

Market segmentation and positioning strategies

Demographic segmentation

McDonalds is known for using geographic and demographic segmentations. The primary target market of McDonalds is young individuals, children and mothers. From the perspective of mothers; McDonalds is affordable, quick and easy meal. The consumers are urban people with professional careers, high income level and with focus on social status. The key demographic group of the McDonalds is comprised of single and young professionals, whose income is above average.

Geographic segmentation

In addition to this, McDonalds is located in upscale locations, near college campuses and offices. College students can hang out and be entertained at McDonalds as the company is constantly focusing on adopting new technologies, and tends to focus on social networking.

Moreover, the positioning strategy of the companyhas been outstanding since its inception, as it has developed a strong image in the minds of customers. Also, McDonalds has high class image and is exclusive all around the world. McDonalds has made itself to be the family friendly restaurant that offers high quality products in the fast food business.

Behavioral segmentation

The behavior of the single professionals and young generation is characterized by their willingness and readiness to pay for the high quality products and spending quality time with loved ones outside the home, in a cheerful atmosphere.

Customer analysis

Income

The consumers are the real assets of McDonalds,because they can demand more for the products, due to which the sales of the company could increase. The consumers are highly responsive to McDonalds and are ready to pay extra for the utmost quality of the product.

Age

Students, employees, professionals, bachelors, and young age groups are primary consumers of Starbucks. They tend to enjoy meals offered by McDonalds in a relaxing and soothing environment. The social class of the consumers is middle and upper class.

Lifestyle

The lifestyles of the consumers include:succeeders, aspirers, mainstreamers, explorers and reformers. They are ambitious, determined and regular users of McDonalds.

Marketing mix strategies

Product

Since its inception, the company is focused on becoming the first choice for diners starving for high-quality products in a comfortable and warm dining environment. The company offers a variety of products to its customers, which includes:hamburgers, cheeseburgers, chicken products, fries, desserts, soft drinks and breakfast items.

Price

The pricing strategy of the company comprises of price bundling,in which the company offers its meal at discounted pricing. Additionally, the company is well aware of the fact that the perception of value of customer is core determinant of the price charged. Using a low price might promise the customers a product of compromised quality.

Place

The places through which the products are distributed, includes:standalone kiosks, mobile app, restaurants and postmates’ websites. The restaurants are where McDonald’s generate most of its sales.

Promotion

Various tactics have been used by McDonalds to increase its products’ sales, which include: direct marketing, sales promotion, public relation and advertising, such as: online media, TV, radio and so forth. Additionally, the company offers discount coupons to its customers, as a way of attracting them.

Alternatives Generation

In response to the issue being faced by McDonalds; various alternatives are enlisted below, along with their rationale to select the optimal one:

Alternative: operational management

Pros

As operational management is delivery focused, it would allow the company to ensureits production to be carried out in an efficient manner.
It would ensure the precise and careful utilization of resources, which includes significant waste reduction and cost effective decision making.
It would allow the company to create optimized schedules,balancingits delivery performance and production efficiency.
The operational efficiency would ensure the speed, affordability and quality of products, as it contains various aspects, such as: production, inventory management and distribution.

Cons

The results are guaranteed only if the plan is carried out inproper& appropriate manner.
The deployment of the automated system for the operational efficiency, requires capital investment.

Alternative: brand re-energization and fuel innovation

Pros

It would allow the company to revitalize its brand through recreating the brand culture being inspired and aligned to deliver an exceptional brand experience to its customers.
It would allow the company to innovate its product menu and beat the market competition.
It would enable the employees to entice the customers and satisfy them as they would get engaged inachieving the common organizational goals.
It would allow the company to find new talent with innovative ideas and fuel innovation, to offer differentiated products and innovate creative and new menu options that would appeal to the target market.
It would allow the company to motivate its employees so that they would work collaboratively and passionately, to deliver an exceptional experience to the customers. The employees’ pride would act as a powerful motivational force that would compels McDonalds to excel.(Light, 2017).

Cons

Re-energizing the employees would require considerable amount of money and time on their training.
The consistentimplementation would require the company to be aligned around the common process and focus.
It would require consistent commitment of leadership to ensure that whether people are committed to the new brand direction or not.

Recommendations

After taking into consideration the benefits and drawbacks of each alternative, McDonalds is advised to go with alternative 1, due to the fact that currently the company needs to make the delivery faster and entice the customers. It would allow the company to balance the speed, quality and affordability and at the same time respond to the competitive threats by adopting a broad differentiation strategy through differentiating the product offerings from the market competitors, by offering high-quality products that appeal to the broad spectrum of purchasers.

In addition to this, the company is recommended to incorporate current feedback of the consumers and maintain the value proposition of “close relationship” with the consumers. By doing so, McDonalds would be able to reinforce the value proposition and the uniformity of the offerings, along with synchronization of consumers’ “on the go” behaviors. To gain an additional market share, the company should incorporate reward programs to encourage the people to buy McDonaldsand utilize the points for their next purchase, enhancing the repeated purchase and binding the consumer, which would result high retention of its customers.

Moreover, the company should engage with the consumer base through social media platforms, in order to create a significant impact on the consumers and build a strong relationship based on personalization of service. In addition to this, the company should incorporate the feedback system, in which the consumers will offer feedback and new ideas to help the business cater the consumers’ needs beforehand, thus, restricting the competition and capturing the market share. Finally, the company will expand its brand offering by incorporating additional items to gain an additional market share.(Freed, 2013).

Conclusion

McDonald’s – the world’ largest restaurant chain with 36000 stores in over 100 countries,praises its position as a world pioneer and fast food giant. Such an increase in the number of stores depicted not only an aggressive growth of McDonalds in the market but also an effective brand adoption of the consumers. Operating as the world’s leading quick service restaurant brand, provided McDonalds a strong competitive edge in the highly competitive market arena. The company aims to be the favorite place of customers. Along with its customer value proposition, this tends to implies value creation for the society in terms of convenience and affordability. Furthermore, the company advertises various corporate values, which include: local integration, progressiveness, inclusiveness and leadership.

Though, McDonalds has so far gained a substantial market share and has developed a strong brand value. However, an increasing competition from Starbucks, Subway and KFC poses serious threat to the company’s value proposition, as these players are offering at much reduced rate than McDonalds. Under such circumstances, the company has to develop a well strategic plan and strategy for business sustainability in the long term, maintaining the brand image and value proposition along with having a strong customer retention strategy..................................

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