McDonald’s or simply McD is a known name in the fast-food industry. It is the market leader of the same segment, but the journey has not been easy for McD.
It started with its first restaurant in San Bernardino, California in 1948. And since then the company has left its mark in the fast-food industry.
When we talk about strategy, its either lost cost strategy or differentiation strategy. McD followed the low-cost strategy to provide affordable food to every customer.
It also firmly believed in the franchisee model where the partners would operate the store under McD name and earn revenue for it. This meant McD would never fully own the store and hence would not have to invest significantly in new stores.
The success of McDonald’s comes from a very simple theory of Standardization. McD has tried to standardize its products to the smallest possible detail.
There is a strict shop floor quality inspection, standard products and budget friendly production of food by cheap labour who are supervised by a manager. This complete concept and brand name are franchised to entrepreneurs.
It also has strong human resource policies which ensure that employees never operate against the brand.
McDonald’s believes in the system of “Organization Above Individual” and hence can manage a turnover of 100% which can crumble any industry. The mission and vision of the company also clearly tells us what the company believes in.
Business Strategy of McDonald’s:
- Adding more than 600 stores annually so that brand remains at the top of customer’s mind.
- Choosing sites convenient to customers.
- Providing offers to customers and adding new items while defending existing ones.
- Extensive marketing and using the prefix “Mc” before every product.
The journey for McDonald’s has not been easy and the biggest concern is its competitors. Burger King is next in line to McD and its biggest competitor.
The whopper line of Burger King is its differentiating factor and also the fact that it can be customized according to customers. It also has other items like the Croissan’wiches and French toast sticks.
McDonald’s also had to face the negative publicity regarding the way the company treats and keeps the animals and their employees. It also has been criticized for not allowing its employees to form unions and for minimum wage issues.
Company has taken drastic steps to ensure better practices. Also, McD realized that it is not easy to stick to a standard menu in every country and hence tried customizing it according to geography. For eg: it introduced an all veg menu for India.
Whenever one enters a McDonald’s store in any city, any country, one would find the same ambience and a very known menu. The taste would also be the same throughout the world and it is not an easy feat to achieve.
This could not have been possible without the logistics and the strong policies of the company. Whatever be the success mantra of McDonald’s, it surely rules our tongues and deserves all the love and support!