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McDonald’s Business-Level Strategy and Issues

McDonald’s has undergone many business strategies, product sales, and conditions for customers during its existence. According to the study by Dess et al. (2020), the company’s total revenue fell from $ 24,622 million in 2016 to $ 21,025 million in 2018. Hence, the company needed to rethink its products and management structure to stabilize. To solve the problem, they followed the fundamental principle of customer orientation, which includes the introduction of artificial intelligence and new product ranges, franchising strategies and locations, and restaurant management and marketing.

Artificial intelligence helps fast-food restaurant chains analyze the factors influencing sales, such as time of day, weather, and trending menu items. Its implementation allows for the improvement of technological equipment and speeds up the understanding of customer needs, depending on various aspects. New marketing ideas such as changing the flavor of burgers were not always good. McDonald’s tried to make its products healthier in multiple ways, such as replacing liquid margarine with real butter and using natural chicken meat with no antibiotics. Increasing competition forced the restaurant to expand its product range, rising from 33 to 121 positions over 24 years, higher prices, turnaround times, and lower product quality (Dess et al., 2020). The introduction of artificial intelligence makes it possible to improve existing technologies, contribute to faster analysis of consumer needs, and increase employees’ speed.

Franchising and locating restaurants allows a company to grow faster, but it takes much effort to meet quality standards. The restaurant owner pays special attention to partners who open branches in different parts of the world, increasing general capital in an arithmetic progression. It leads to a monopoly and allows the business to remain in its leading position in the fast-food industry, despite the growing number of competitors. Due to the rapid expansion and opening of new branches, the quality and speed of service suffer, since a new location is not always prepared. Restaurant location also plays an important role, as geographic accessibility is a critical factor when choosing a place to eat. If the restaurant is conveniently located, a student comes in to buy a coffee before school, and an office employee visits it to have a lunch. A franchise strategy helped the company’s growth and a suitable location of branches; still, these days, because of rapid expansion, product quality has suffered.

Restaurants should unify the organization of work because it helps marketing develop a personal brand. The organization comprises several factors, such as strictly adhering to quality standards, the sanitary condition of premises and equipment, the organization of services, cashiers’ work, computerization, and the development of alternative management methods. Marketing concepts have undergone many changes, such as changing the logo and slogan after falling profits. Changes in the branches’ interior, new chairs and sofas, lighting, large TVs, wireless Internet, and convenient motorists’ access have become the corporation’s new face. The renovation was financed from each of the branches’ profits and reached 125 thousand dollars (Dess et al., 2020). A unified approach to McDonald’s restaurants worldwide has allowed customers to ensure they will receive the same product everywhere; in contrast, marketing changes have strengthened their brand and created a loyal customer base.

McDonald’s uses a variety of strategies to tackle revenue decline, all of which are customer-centered. The integration of artificial intelligence has helped people create better products and faster service, a measure that is effective as satisfied customers will come again. The transfer of business rights and a successful branch location is an excellent strategy that must be applied correctly. For example, at the beginning of its history, McDonald’s could grow, and nowadays, expansion has led to a decrease in product quality, loss of customers, and profits. Merging restaurants and creating unified products allow you to develop your marketing and personal brand while increasing customer loyalty. In conclusion, McDonald’s has completely changed its approach to products and business, allowing profits to grow. Its further success will depend on its ability to compete in its industry.

Reference

Dess, G., McNamara, G., Eisner, A., & Lee, S. (2020). Strategic management: Text and cases (10th ed.). McGraw-Hill Education.

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Essay4Business. (2022, October 6). McDonald’s Business-Level Strategy and Issues. Retrieved from https://essay4business.com/mcdonalds-business-level-strategy-and-issues/

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Essay4Business. (2022) 'McDonald’s Business-Level Strategy and Issues'. 6 October.

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