McDonald’s and Hungry Jack’s: Competitive Strategies, Pricing, and Market Structure

McDonald’s and Hungry Jack’s
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Executive summary
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McDonald’s and Hungry Jack’s 2
The report concludes that the market for the fast food industry is oligopolistic
characterized by a few large firms that have control over the market. The report also found that
McDonald’s and Hungry Jacks used bundling pricing and psychological selling to lure their
customers into purchasing more of the products. However, despite Hungry Jack’s charging low
prices for most of their food products, McDonald’s dominates the market with most consumers
preferring to have their foods at McDonald’s. The companies in the Australian market also
differentiate their commodities as a move to establish themselves in the market. McDonald’s
has used both the global strategy and the localization strategy in operating in the Australian
market. However, amidst health concerns by consumers to have health-conscious menus is an
opportunity that should be utilized by Hungry Jack’s if it is to compete with McDonald’s.
Introduction
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McDonald’s and Hungry Jack’s 3
The report analyzes the operations of McDonald's and Hungry Jack’s regarding their
competitive strategies, pricing and non-pricing strategies in Australia. The first part of
introduction entails a brief history of McDonald's and Hungry Jack's.
McDonald's started its operations in 1979 with its first food retail outlet situated at
Yagoona which was a suburb of Sydney (McDonald's, 2019). As of today, McDonald's boasts of
operating 950 food outlets spread across Australia and employ more than 100000 individuals in
both the restaurants and in the management.
Hungry Jack's was first started in 1971 when its shop began its operations. Hungry Jack's
was reported to be the exclusive master food with its foundations on franchisee of Burger King
Corporation. However, it was unfortunate that the brand had already been trademarked by
another fast food retail outlet situated in Adelaide.
The second part of the report entails looking at the pricing and non-pricing strategy.
Then an analysis of the market structure is looked based on the nature of competition exhibited
in such a market. The next section involves analyzing the growth strategies and
recommendation for the appropriate growth strategies for the selected company and lastly,
there is a conclusion which highlights the major work in the report together with the findings.
The current position in the market
McDonald's has been ranked as a market leader not only in Australia but also globally. It
has more than 850 restaurants situated in Australia only. However, Hungry Jack's, on the other
hand, has more than 340 stores located in Australia. In the 2009-2010 fiscal year, the reported
sales amounted to more than $1043 billion, and the after-tax profits were roughly $321 million.
Pricing strategy
Using the Face-Off particularly in fast food outlets, it provides an occasional Lifehacker
trait where it is possible to compare two similar takeaway commodities from other competitors
to ascertain the offers that provide the best value (Jager, 2014). In this context, we will
compare the fries produced by McDonald’s versus those by Hungry Jack's. According to Jager
(2014), McDonald's was selling its standalone small fries for just $1, and this was a strategy to
reform its loose change menu, which was temporary. However, the small fries from Hungry
Jack's was retailing at $ 2.50. This was amidst claims that Hungry Jack's had assumed the
market position of being a cheaper choice compared to the McDonald's with the prices of
combo falling below a dollar or two compared to the rival. However, Hungry Jack's breakfast
menu is affordable, particularly the egg and bacon muffins costing only $2. Thus, such an
aggressive pricing strategy fails to extend to the French fries.
Pricing by Hungry Jack's
Hungry Jack's adopts the competitive pricing since the competition is intensely
originating from the likes of McDonald's. Hungry Jack's has been regularly monitoring and
examining its pricing policy to ensure that its consumers are not burdened by the rates they
charge for their products. Apart from analyzing the process that the customer is willing and able
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