- Introduction
McDonald’s Corporation depicts an American fast-food firm that started in 1940 as an eatery. The enterprise began as a hamburger and then transformed into a franchise. McDonald’s remains the globe’s biggest restaurant chain by revenue, with more than 90 million clients in over 100 nations. It is popularly recognized for its hamburgers, breakfast foods, wraps, French fries, cheeseburgers, chicken products, and desserts. However, due to changing consumer preferences and pessimistic criticism due to their unhealthy foods, the firm has included fish, fruits, salads, and smoothies. McDonald’s company income is derived from the firm-operated restaurant sales and the franchisees’ fees, rent and royalties. McDonald’s is thus the planet’s second-largest private company with over 17 million staff. It has approximately 36889 restaurants in 120 States that encounter numerous direct and indirect rivalries. It has situated its headquarters in Chicago. This essay provides a competitive analysis of McDonald’s, describing its competitors and the way each is differentiated. It outlines two strengths and two weaknesses of the company compared to the other two of their competitors. Starbucks and KFC are the chosen competitors. The essay also analysis its marketing strategies using the four Ps. Finally, this context identifies the company’s competitive advantage.
- Competitive Analysis
MacDonald’s has various competitors within diverse markets, especially in the United States. They include fast-food eateries, traditional fish and chips outlets and coffee shops. McDonald’s countenances direct rivalries from other restaurants like Subway, Wendy’s, KFC, Starbucks, Burger King, and Taco Bell. These competitors are still its competitors within the global markets and the UK. They compete for market share. McDonald’s performance in 2019 was relatively low, which shows several rivalries revamp their menus to boost their competition stance (Badkar, 2019). McDonald lagged behind KFC in China as it has more than 5000 restaurants within the nation, making it the market leader. Both KFC and MacDonald target similar customers and cost-effective services make competition between the two very intense. KFC around the globe has greatly been very competitive, making it a recession-resistant industry. In Germany, McDonald’s remains the present market leader despite dire competition from other firms.
McDonald’s brand value remains far ahead of its rivals. In 2019, it had an approximate brand value of $130.4 billion. (Lock, 2019) demonstrates that Starbucks followed with an estimated brand value of $ 45.9 billion. Such comparisons render McDonald’s to make better tactics and strategies to compete with its competitors. For instance, branding is its great asset making it the most famous brands on the planet.
Additionally, it uses a cost leadership strategy to serve its clients’ food and beverages at a cost that its competitors struggle to contest. It delivers food speedy battling out rivals. Its speedy delivery of food is also useful to the battle out competition.
Starbucks also has its weakness as compared to McDonald’s. Its prices are relatively higher for the middle-class group and the working consumers compared to McDonald’s price. Thus, the high cost lower affordability for the users. Imitability of the Starbucks products lowers its competition to MacDonald’s. Its products are not highly unique, making it quite easy for other firms to imitate and offer similar services.
Starbucks Strengths include a strong brand image within the food and beverage sector, making it compete with McDonald’s. Its loyal clients keep increasing with time. In 2019, it had an $11.7 Billion brand value. Starbuck also possesses a strong financial performance that makes it stand out within the market.
KFC remains a big competitor for McDonald’s. Its strengths remain that it is the second-best global brand in value and a strong position within China. However, its untrustworthy suppliers and unhealthy food menu lag its competitive stance.
References:
Badkar, M (2019) McDonald’s sales growth slows in the US, available at https://www.ft.com/content/f52f8524-f424-11e9-b018-3ef8794b17c6 (accessed 4 November 2020)
Jacobs, H. (2019) KFC is by far the most popular fast-food chain in China, and it’s nothing like the US brand — here’s what it’s like, available at https://www.businessinsider.com/most-popular-fast-food-chain-in-china-kfc-photos-2018-4?r=US&IR=T (accessed 4 November 2020)
Koptyug, E. (2019) Most popular fast-food restaurants in Germany from 2015 to 2019, available at https://www.statista.com/statistics/560813/most-popular-fast-food-restaurants-germany/ (accessed 4 November 2020)
Lock, S. (2019) Brand value of the 10 most valuable fast food brands worldwide in 2019, available at: https://www.statista.com/statistics/273057/value-of-the-most-valuable-fast-food-brands-worldwide/ (accessed 4 November 2020)
McDonald’s (2020) About us, available at: https://www.mcdonalds.com/us/en-us/about-us.html (accessed 4 November 2020)