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Mc Donald's : Competitor Analysis, Conduct A Swot Analysis, Evaluate Current Segmentation, Targeting And Positioning Before Presenting Recommendations.

2731 words - 11 pages

1.0 AbstractMc Donald's, the number one fast food chain in the world with over 30,000 restaurants in over 120 countries reported in January 2003 its first quarterly loss of $343.8m in more than 40 years of business. This report aims to investigate the reasons behind Mc Donald's poor performance by using marketing theory and analysis. Concluding with recommendations for improvement.2.0 Introduction2.1 BACKGROUND OF MC DONALDIn 1937 Richard and Maurice McDonald developed a simple food processing and assembly line at a small drive in restaurant. Noticing an opportunity, Ray Kroc negotiated a franchise deal and eventually bought the brothers out in 1967. McDonald's in now the largest and well know global fast food retailer.2.2 BUSINESS DESCRIPTIONMcDonald's serves around 30,000 fast food restaurants that sell a menu of convenience food. McDonald's operates at a uniform standard and service. Besides from its outlets, McDonalds have new chains to meet the different sectors in the market, in the UK, Aroma Café is a chain of coffee houses selling sandwiches and desserts.3.0 Situation AnalysisIn order for McDonald's to analysis its situation; it must split its whole situation into four segments, two external and two internal. Each one will help them to analysis the individual segments and to aid in decision making. This report will look into the two internal and external sectors combined.Figure 1: Situation Analysis3.1 REASONS FOR POOR PERFORMANCEMcDonald's early success was that its restaurants offered lower prices, faster services, and more consistent quality than competitors. Now competitors have caught up and are equally matching McDonald's quality and service. The fast food sector is now near saturation, with an overcrowded restaurant market and poor eating experience. McDonald's was forced to close over 700 restaurants and rethink its marketing strategy to attract old and new consumers.Domestically McDonald's failed to keep up with trends in eating towards healthier upmarket meals. McDonald's has maintained a uniformity of all its restaurants that worked well in its domestic market. However, the novelty of American eating style has faded, new consumer habits differ from those in the 70s and 80s.With more health wariness consumers, it is essential for the fast food market to adapt to changes. Last year burger restaurants sales grew only 2% whereas sales at sandwich restaurants like Subway jumped 8% (Consultancy Technomic Information Services). McDonald's seem to have lost its capability to compete with rival's more innovative products, such as Burger King's fries and whoppers. With increasing competition from healthier options as well as other fast food chains, McDonald's need to make drastic changes to maintain its position as market leader.Higher standards of living and social ambition has affected the way people want to buy. An increase in culture and taste, organic foods, up market restaurants and quality has become more significant,...

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