(PDF) McDonald's Success Strategy And Global Expansion

Mc Donald’s Company
Rishinika Perera
190920012

Table of Contents
An Introduction Summary........................................................................................................................3
An explanation of the organization’s micro and macro environment.....................................................4
MICRO ENVIRONMENT........................................................................................................................4
MACRO ENVIRONMENT.......................................................................................................................4
Business Model (Products and services mix............................................................................................5
SWOT Analysis of McDonald’s.............................................................................................................6
Importance and Process of McDonalds Segmentation, Targeting.........................................................7
Product/service features and benefits.......................................................................................................8
McDonald’s Marketing Mix (4Ps) Analysis.............................................................................................8
McDonald’s Products (Product Mix)...............................................................................................8
Place/Distribution in McDonald’s Marketing Mix..........................................................................9
McDonald’s Promotion (Promotional Mix).....................................................................................9
McDonald’s Prices and Pricing Strategies.....................................................................................10
3p’s People, Process and Physical evidence in Mc Donald’s................................................................10
Process..............................................................................................................................................10
People................................................................................................................................................10
Physical Evidence............................................................................................................................10
Mc Donald’s marketing mix responds to changing market conditions...............................................10
References................................................................................................................................................11
An Introduction Summary
McDonald’s Corporation is a “Centralized, International company”, which is
the largest chain of fast-food restaurants with more than 30,450 fast-food

restaurants in 121 countries worldwide. Fifty-eight percent of these stores
are operated by franchisees, twenty-eight by the company, and fourteen
percent by affiliates. McDonald’s expand its market into foreign countries
through three primary methods, franchising, company owned restaurants,
and joint ventures which will help McDonald’s easily to be accepted into
unfamiliar markets and franchising continues to contribute heavily to
McDonald’s international success. Although its expansion rapidly, McDonald's
still manage a tight grasp on operations, cost and quality by using a
centralized, international structure. However, McDonald needs to face the
risk of its change in operation strategy

An explanation of the organization’s micro and macro environment
MICRO ENVIRONMENT
The environment which is close to the company that affects, positively or negatively and it
creates value and relationship with its customers. Marketing success will require building
relationships with other company departments, suppliers, marketing intermediaries, customers,
competitors, and various publics, which combine to make up the company’s value delivery
network. Micro environment that surrounds organization can be complex by nature; however,
company has an element of control over it. Some of the factors which affect the micro
environment are:
 Suppliers
 Intermediaries
 Customers
 Competitors
MACRO ENVIRONMENT
Macro environment consists of broader forces that shape opportunities and pose threats to
company. It shows six major forces in the company’s macro environment. These are:
 DEMOGRAPHIC ENVIRONMENT
 ECONOMIC ENVIRONMENT
 NATURAL ENVIRONMENT
 TECHNOLOGICAL ENVIRONMENT
 POLITICAL ENVIRONMENT
 CULTURAL ENVIRONMENT
Business Model (Products and services mix)

McDonald’s business model can be described as follows:
• McDonald is famous for value proposition: food of a constant quality that is served
quickly and consistently.
• The main customer divisions are families and youngsters.
• Key resources are the company’s employees and its restaurants on locations.
• McDonald’s main strategic partners are its franchise holders. At year-end 2013, more
than 80% of McDonald’s restaurants were franchised.
• McDonald’s distributes its products through the restaurants.
• The cost structure consists of employee salaries, facility construction costs, raw
materials procurement and marketing costs.
• McDonald’s revenues are generated at the restaurants owned by the company itself
and those owned by its franchise holders.
Stakeholders
McDonald’s top stakeholders are its employees and customers. However, the firm’s corporate
social responsibility status is also subject to the influence of other stakeholders. The following
are McDonald’s main stakeholder groups, arranged according to significance:
 Employees
 Customers
 Investors
 Communities
SWOT Analysis of McDonald’s

Strengths
Strong Global Brand, McDonald’s has one of the most recognizable brands in the world.
Diversified Income.
Clean Environment & play space for kids.
Competitive prices.
Weaknesses
Negative publicity, McDonald’s has always maintained the perception that its food is
unhealthy, loaded with fat, carbs, salt, and sugar.
Limited vegetarian options.
Weak product development
High Employee Turnover
Opportunities
Expansion into the vegetarian market.
Expansion opportunities in more underdeveloped nations.
The company is also trying to strengthen its position in the high-margined caffeinated
beverages industry
Threats
More health-conscious customers
Competition, McDonald’s faces significant competition from national, international,
regional, and local retailers of food products.
Global economic recession
Importance and Process of McDonalds Segmentation, Targeting
McDonalds segmentation, targeting and positioning is one of the integral
components of its marketing strategy. Segmentation involves dividing
population into groups according to certain characteristics, whereas

targeting implies choosing specific groups identified as a result of segmentation to sell products.
Positioning refers to the selection of the marketing mix the most suitable for the target customer
segment. McDonald’s uses adaptive type of product positioning and accordingly, the company is
engaged in periodical re-positioning of products and services according to changes in the segment.
The following table illustrates McDonalds segmentation, targeting and positioning:
Type of
segmentation
Segmentation
criteria
McDonald’s target segment
Geographic
Region Domestic/international
Density Urban/rural
Demographic
Age 8 – 45
Gender Males & Females
Life-cycle stage Bachelor Stage: young, single people not living at home
Newly Married Couples: young, no children
Full Nest II: youngest child six or over
Income Low and middle
Occupation Students, employees, professionals
Behavioral Degree of loyalty ‘Hard core loyals’ and ‘Switchers’
Benefits sought Cost benefits, time efficiency
Personality Easygoing & careless
User status Potential and regular fast food eaters
Psychographic Social class Lower, working and middle classes
Lifestyle McDonald’s targets Resigned, Struggler and Mainstreamer individuals
according to Cross Cultural Consumer Characterization developed by
Young & Rubican
Product/service features and benefits
McDonald’s provide a both services and products, the product being food and the services being
Customer care, McDonald’s provide fast food. Toys are given to kids with a “Happy Meal”.
There is a delivery option to limited number of companies right now.

McDonald’s Marketing Mix (4Ps) Analysis
McDonald’s Corporation’s marketing mix (4Ps) involves various approaches that meet business
concerns in different fast food restaurant markets around the world. The marketing mix defines
the strategies and tactics that a company uses to reach target customers, in terms of products,
place, promotion, and price (the 4Ps). In this business analysis case, McDonald’s has corporate
standards that its marketing mix applies globally.
McDonald’s Products (Product Mix)
As a food service business, McDonald’s has a product mix composed mainly of food and
beverage products. This element of the marketing mix covers the various organizational outputs
(goods and services) that the company provides to its target markets. McDonald’s product mix
has the following main product lines:
 Hamburgers and sandwiches
 Chicken and fish
 Salads
 Snacks and sides
 Beverages
 Desserts and shakes
 Breakfast/All-day breakfast
 McCafé
Place/Distribution in McDonald’s Marketing Mix
This element of the marketing mix enumerates the venues or locations where products are
offered and where customers can access them. Restaurants are the most prominent places where
the company’s products are distributed. However, the business utilizes various places as part of
this 4P variable. The main places through which McDonald’s distributes its products are as
follows:

 Restaurants
 Kiosks
 McDonald’s mobile apps
 Postmates website and app, and others
McDonald’s Promotion (Promotional Mix)
This element of the marketing mix defines the tactics that the business uses to communicate with
customers. Among the 4Ps, this variable focuses on marketing communications with target
customers. For example, the company provides new information to persuade consumers to
purchase new products. McDonald’s uses the following tactics in its promotional mix, arranged
according to significance in the business:
 Advertising (most significant)
 Sales promotions
 Public relations
 Direct marketing
McDonald’s Prices and Pricing Strategies
This element of the marketing mix specifies the price points and price ranges of the company’s
food and beverage products. The aim is to use prices to maximize profit margins and sales
volume. McDonald’s uses a combination of the following pricing strategies:
 Bundle pricing strategy
 Psychological pricing strategy
3p’s People, Process and Physical evidence in Mc Donald’s
Process
Process is generally the activities undertake to deliver a service to a client or customer.
Importance of process is also very important for a giant like McDonald’s as they have to
maintain homogeneity in the process of serving, preparation and with all this they have to also
manage the cultural and legal needs of the UK environment, like usage of oils components,

health issue prescribed by UK government agencies etc. Thus, McDonald’s has to have a
homogeneous process though with a small addition of country’s needs.
People
People are everyone who is involved in any stage and any way to make the organization function
as it does. For McDonald’s generally the people are employees at store, manager who manages
them etc.
Physical Evidence
Physical evidence means the store ambience, appearance etc. With McDonald’s one would relate
an ambience which is comfortable, fun loving, lively etc.
Mc Donald’s marketing mix responds to changing market conditions
McDonald's is extremely adapting to the local resources promoting the use of local resources, the
best example of this would be when McDonald expanding into the Canadian cost were lobster is
abundant, therefore McDonald's designed and produced a McLobster which was a lobster salad.
In Finland, Salmon is abundant and McDonald's produced the McLuks salmon burger which is
more popular by rhea local community than that f the traditional McDonald's beef burger.
References
 Dominici, G. (2009). From marketing mix to e-marketing mix: A literature overview and
classification. International Journal of Business and Management, 4(9), 17-24.

 Goi, C. L. (2009). A review of marketing mix: 4Ps or more? International Journal of
Marketing Studies, 1(1), 2.
 Hisrich, R. D., & Ramadani, V. (2017). Entrepreneurial Marketing Mix. In Effective
Entrepreneurial Management (pp. 75-99). Springer International Publishing.
 McDonald’s Corporation – Form 10-K.
 McDonald’s Corporation – Mobile Ordering.
 McDonald’s Corporation – Full Food Menu.
 Rahmani, K., Emamisaleh, K., & Yadegari, R. (2015). Quality function deployment and
new product development with a focus on marketing mix 4P model. Asian Journal of
Research in Marketing, 4(2), 98-108.