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Mcdonald's competitive strategy
- 1. McDonald' s Competitiv e Strategy Project Sample-Yuhan Zhou GroupMembers: Yuhan Zhou, Youwei Lian, Jiayi Chen, Minghao Li
- 2. Agenda ➢Executive Summary ➢CompanyBackground ➢Vision, mission and values ➢Goals and Objectives ➢Situational Analysis ➢Problems and Opportunities ➢Strategies ➢Timeline and budget
- 3. Executive Summary McDonald’s hasalways been the largest fast-food chain in the U.S. Even though it still possesses the most market share through all these years, its image to millennials seems starting to dime. That’s why this whole competitive strategic plan aims to help Mcdonald’s win back the favors among this demographic group. Based on the characteristics of millennials, the core strategy is to have them find their own personalities from Mcdonald’s brand. The specific strategies are elaborated in four aspects, including social activation, tech sense, social responsibility and trendy. For each section of the strategies, we have various tactics corresponding to it, which all come from millennials’ preference. Hopefully, millennials will find their resonance in McDonald’s brand, thus resulting in 50% increase of all restaurants traffic.
- 4. Company Background 36,000+ location-- World Famous Leading Fast Food Service Chain U.S -- Where It Origins Burgers and Fries -- What It’s Famous For Franchisee, Affiliate and Corporation -- How It’s Being Operated
- 5. Organizational vision, mission& value Vision: "To be the best quick service restaurant experience" Mission: "Is to be our customer's first choice, when it comes to, top quality products, outstanding service / cleanness and great value for money ". Value: Make better food, more sustainable sourcing, happier people, a stronger community and a healthier planet.
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- 7. Situational analysis ---Internal $200 Billion (2015) REVENUE 200,000 + RESTAURANT S 50 Million Per Day CUSTOMERS 80% OPERATION Franchised Quality Center Food Safety Advisory Council Independently owned and operated distribution channel Supply Chain & Quality Assurance Product Substantially Uniform Menu Local Flavor Hamburger, cheeseburger, Fries, nuggets, oatmeal, wraps, coffee, beverage All-day breakfast Egg Mcmuffin, bagel sandwiches
- 8. Situational analysis ---Internal Culture Change US Emphasis Ability to move one test market in April to launch in October in over 13000 restaurants Simplify order procedure Interact with customers through mobile app More choices with compelling price Future Resolution
- 9. Situational analysis ---Customer “All Ages” 25% Eat some type of Fast food every day 44% Say that they’ll eat fast food at least one time per week. 6% Say that they eat fast food 7x per week. 53% vs. 42% Men are more likely than women to eat fast food weekly. 110 million Visited McDonald’s in the past month at least one time. Household Income $75k/year vs $50k/year Same likelihood to eat once per week at Mcdonald’s 39% of less than $20k/year Eat at least once per week
- 10. Situational analysis ---External
- 11. Situational analysis ---External Regulation & Policy: ➢Food safety & standards ➢Labor relations ➢Smoking bans ➢Franchising laws The level is medium The trend is increasing Technology & systems: ➢Quality of service ➢Point of sale systems ➢Labor scheduling ➢Social media The level is medium
- 12. Competitive Analysis McDonald’s PaneraBread Starbucks Chipotle Strengths 1.Largest fast food market share 2.Strong brand image 3.Higher income and more capital 4.Global operations all over the world 1.A core competency of Panera bread is in artisan foods 2.Strong consumer loyalty 3.Highest quality of the food 1. Highest sales growth 2. Global coffee brand built upon a reputation for fine products and services 1.Rapid growth 2. Healthier food choices 3.Strong management team and good at innovation
- 13. Competitive Analysis McDonald’s PaneraBread Starbucks Chipotle Weaknesses 1.Changeless on food menu 2.Unhealthy 3.High employee turnover 1. Brand presence of the company is not as strong as McDonald’s 2.The development of the brand is slow 3.The restaurant does not provide 1.Slow to diversify into other sectors 2.Stereotype of the brand image 3.Remain vulnerable to the new product 1.Higher price than competitor 2.Limited menu 3.Not authentic Mexican food
- 14. Problem “Big Mac”is Facing Ain’t Popular Among Millennial ⇩ 2011 Age 19-21 Monthly Visits Has Fallen by 12.9% Age 22-37 Monthly Visits Remain flat ⇩ 2012 3.6 billion visits vs. 4.2 billion visits in 2007
- 15. Chances to Reverse Millennials Easierto access to millennials in digital age 56% report them to be one of the first to try technology 50% of Millennials wouldbe more willing to make apurchase from a companyif their purchase supportsa cause 46% of them post original photos or video online that created by themselves Active in social activities of different types
- 16. Target Audience Demographic ❖ 18-24- the millennials ❖ 31.2 million (9.7% of U.S Population) Psychographic ★ Transparency: the quality of food, the transparency of a company, where the food comes from, and the sustainability of that food ★ Food experience ★ Food meets their healthy lifestyle ★ Social Responsibility ★ Early adopter of technology ★ 98% of online US adults aged 18-24 use social media
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- 19. Unique Selling Proposition FindYour Personalities with Mcdonald's
- 20. Acquisition Speak for peopleand create resonance Retention Provide reward value and new experience
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- 22. “I am best” “M”logo Encourage Millennial to pose “M” in their creative way Purpose: Showcase their strengths and expertises #mbest
- 23. Ad Campaign Slogan -“That’s how you make M colorful” Support LGBT #mcolorful
- 24. Collect different filters indifferent store Where, when, and why 40%~60% of daily Snapchatters ”Snapchat - Sponsored Lenses & Geofilters” Interactive ad Average play 20 seconds 41%
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- 26. Geofencing & MobileApp Marketing Real-time Promotion Reward Program “Hey, you are in the M zone. Why not get refreshed or sweeten? Today-only Deal Get your next selected beverages 50% off” Bonus: Buy 8 combos for 1 combo free Lottery: 10 Free Recent Celebrity Concert tickets for those who purchase over 50 times and pay by mobile app in 3 months
- 27. In-store VR Kiosk ●Directly Order & Pay ● Customize their food ● Virtual Tour to Mcdonald’s factory Restaurants in the hub area of major cities
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- 29. Set up Recyclestations in selected McDonald’s locations Recycle: batteries, mobile phones, globes and printer cartridges Recycle Station
- 30. For every dollaryou spend in McDonald’s, we donate 5 cents to the UN Refugee Agency Charity Program
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- 32. Sponsorship for ElectricDaisy Carnival Official Food & Drinks Provider Peripheral Products
- 33. Mcdonald’s Dota 2Tournament 20M M Viewership
- 34. TimeLine & Budget JanFeb Mar Apr May Jun Jul Aug Sep Oct Nov Dec #mbest $ 40 million #mcolorful $ 50 million Geofilter $40 million Lense $40 million Geofencing $ 75 million VR Kiosk $ 50 million Recycle $ 18 million Charity $ 100 million EDC $ 50 million Dota 2 $ 50 million Budget account for 6% of the sales from last year: 8.56 billion * 6% Total budget: $513 million
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Editor's Notes
- #5 Mcdonald’s is the leading fast food services organization for over 36,000 location in the world. It is founded in US in 1940 as a barbeque restaurant but became popular because of its hamburger.Mcdonald's has three types of operation-franchisee, affiliate and corporation itself. But over 80% of Mcdonald’s restaurants are operated as franchisee. Their menu consists of burgers, french fries, desserts, soft drinks, salads and some seasonal selections.
- #11 Based on xxx research, fast food industry has 228.2 billion dollar revenue totally. And it still has 2 percent annual growth in the next 5 years. And we can see this industry has more than two hundred thousand businesses, it’s really very competitive. Based on Barnes Reports research, the number of establishments grew 1.1 percent from 2014 to 2015. And sales increased 4.5 percent. This research was performed in October 2015 and looked at the 130 largest U.S. industries (nearly 3.1 million establishments and $2.8 trillion in sales). http://www.statista.com/topics/863/fast-food/ The fast food industry in the United States generated approximately 198.9 billion U.S. dollars in 2014. By 2020, this figure was forecasted to exceed 223 billion.
- #12 Now, let’s focus on the regulation and policy toward fast food industry. It includes food safety and standards, labor relations, smoking bans and franchising laws. Although the level of regulation is medium, which is ok, the regulation and policy are increasing. Not too strict, but it’s getting harsh.
- #13 Strong brand value and market leadership Focus on positioning itself as a value and family restaurant brand Strong cash flows Robust dividend growth strategy earning in excess of $600 million in 2004.The company generated revenue of more than $5000 million in the same year It has almost 9000 cafes in almost 40 countries
- #14 Tax evasion and lawsuits received lower-than-average customer satisfaction ratings
- #15 The percentage of people age 19 to 21 in the U.S. who visited McDonald's monthly has fallen by 12.9 percentage points since the beginning of 2011, according to Technomic, while the percentage of customers age 22 to 37 visiting monthly during that period has been flat.In the year ended November 2012, millennials made 3.6 billion visits to hamburger chains, down from 4.2 billion visits in the year ended November 2007.
- #23 Reason: comparing to competitors, McDonald’s sign “M” is a signature and easy to express
- #25 On any given day, Snapchat reaches 41% of all 18 to 34 year-olds in the United States. Source: Nielsen Media Impact, Reach Duplication, Nielsen Total Media Fusion/GfK MRI Survey of The American Consumer 9/1/2015 – 9/30/2015 (Television, Internet, and Mobile)
- #33 18-24区间 人数最多 Salary -> Purchase power