Mcdonalds Existing Objectives and Strategies

Assignment 2: Preparing a Comprehensive Case Study, Part 2

McDonalds Existing Objectives and Strategies

Mark Farley

Professor Belay

Business 490 Business Policy


McDonald’s has a strong global presence with its nearest domestic competitor being only half its size, McDonald’s is the market leader in both the domestic and international markets. MacDonald’s benefit from cost reduction through economies of scale because of its enormous size and its huge   global presence allows it to diversify risk involved with the economic performance of specific countries. With respect to nternational markets, MacDonald’s is well placed to expand and take advantage of long-termeconomic growth. MacDonald’s also has a strong real estate portfolio. The company’s outlets are located in areas that are highly known for visibility, traffic volume and ease of access. McDonald’s also has exceptional brand recognition. This strong brand recognition creates significant opportunities for the company. MacDonald’s is able to generate more sales because of its brand recognition. Through aggressive market planning, MacDonald’s has been able to recapture its youth market once again.
The food industry is really saturated. As a result of this, MacDonald’s has to deal with the prospect of looming market saturation, which could make it difficult to add new outlets. The market is forecast togrow by around 2% per year. There is also an increasing price competition driven by too manycompetitors, which reduces the company’s ability to increase revenue. Nevertheless, the swift of thecompany’s focus from a value menu to a more diverse one has recently limited the negative effect of the intense price competition that was traditionally taking place among the industry leaders. Lack of   product innovation is another weakness of McDonalds. The last break-through for McDonald’s was theChicken McNugget in 1983, but again the...