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A market analysis of the McDonalds corporation

McDonalds is a popularly known Market Head in the Fast food Industry or better known as the 'Burger' Industry. Started in the entire year 1948, it includes were able to emerge triumphant regardless of a number of companies stepping into the industry. The company has successfully founded a popular brand image. Actually the development of junk food has been called after the company as 'McDonaldization'.

Marketing involves figuring out what customers demand and striving towards get together their demands. Marketing Audit requires analyzing the company's various aspects and assessing the company's online marketing strategy. It includes in bringing out the pitfalls in the organizations operating.

The following pages contain the examination of McDonalds Corporation. We have investigated the various areas of the organization functioning concerning how well they have were able to reach customers. There's been an research of the industry aspects like the customers, competitors and the suppliers. Also the Macro Environmental research combined with the SWOT has been performed. We've analyzed the current Marketing techniques. On examining the existing situation of the company and the marketplace in the junk food industry we have provided some suggestions which might end up being useful for the organization on its successful execution.


The statistics statistics show that the global junk food market come to a value of $102. 7 billion in 2006, growing by 4. 8%. Meanwhile, analysts forecast that in 2011, the global fast food market will "have a value of $125. 4 billion, an increase of 22. 2% since 2006" ("Fast Food: Global Industry Guide", n. d. ).

McDonald's is the worlds leading company in the junk food industry. They have more than 30, 000 restaurants in more than 100 countries providing millions people about the global. The company's success was because of this of the plan they follow, known as the Q. S. C. &V. (Quality food; Fast, Friendly Service; Restaurant Cleanliness; and a menu that provides Value).

The company was initially started as a drive-in restaurant in San Bernardino by the two brothers Mac pc and Dick McDonalds in the entire year 1948. It was later bought by Ray Kroc, who was their franchising agent in 1961 and exposed his first McDonalds in Illinois. The business's menu initially contains Hamburgers, Cheeseburgers, French Fries, Sodas, Milkshakes, milk and coffee, although it has grown considerably since.

The company employs a unique business design referred to as the "three legged feces" wherein the three legs will be the owners/providers, suppliers and Company employees. It really is an organization that develops, manages, franchises and services a worldwide system of restaurants that prepare, assemble, bundle and sell a limited menu of quickly ready, moderately costed food. McDonalds has pioneered food quality specs, marketing and training programs, and functional and supply systems, which are the benchmarks of the industry across the world.

Marketing Mix

Every business company must develop a powerful online marketing strategy. The 7 P's is employed to continually examine and re evaluate business activities. The seven Ps are product, price, promotion, place, packaging, placement, and folks. The 7 P's are used to ensure that the business is on track and achieve maximum results.


Predominantly markets Hamburgers and cheeseburgers which forms the area of the standard menu worldwide

Also sells various types of rooster sandwiches and products, French fries, soft drinks, breakfasts, and desserts.

They sell a number of products during limited promotional schedules.

The company studies services on a continuing basis. Example: Hen Nuggets in the year 1983



Focuses on Friendly and Fast service which helps them to maintain their reputation

Employees have a typical uniform.

Statistics of staff composition

Restaurant staffRestaurant managementOffice staffFranchisees' staff44, 000300050025, 000They have high recruitment expectations, employ local personnel and proper training.



Manufacturing process is clear and noticeable to customers.

Customers are invited to check on the ingredients found in the food.

Maintain high quality control specifications.

Use of ground breaking ideas and having latest solutions installed.

Drive through facility


Have "Specials", two buck burgers

Competitors find it difficult to follow

Generally use a value-based approach to pricing,

Aim at providing consumers the best value for money


Best methods to maintain high awareness and promote their image

Advertising through Billboards, Television set, Radio etc.

Sponsorships like Ronald House and local Basketball

Sales Promotion, Examples: Two buck burger, Happy Meal

Direct Marketing through Birthday and Clubs



Placed extensively and easily accessible

Have Drive through where customers can pick up food

Mc Delivery offers options for home delivery

Holds another type of put in place the consumer's mind

Fun place for children

Physical Evidence

Means looking for aspects customer uses to assess something and assess its position

High quality standards are maintained

Emphasizes on clean and hygienic interiors of its outlets

High importance to the appearance of the personnel and the service provided.


Current Marketing Strategy

McDonalds as a world Market Leader has certain goals which it aims to accomplish 100% customer satisfaction, increase its market share and optimize profitability by minimizing costs.

On analyzing the business's marketing position, listed below are an integral part of the existing strategy in order to attain its customers:

Healthier foods

To cope with the change of tendency towards much healthier food this McDonalds have modified the way the food is ready. It makes sure 100% vegetable essential oil is used, low fat milk can be used for milkshakes and the amount of sodium has been cut down.

Food Quality and Nutrition

The quality and security of foods are of paramount importance in McDonalds. This is achieved through rigorous product standards, strict enforcement of working methods and work in close marriage with the suppliers.

Larger Menus

McDonald's aims at reaching the other important expectation from the consumers ("want for choice"). To this McDonalds reacted by presenting the breakfast time menu with a variety of food products. Apart from this they also have introduced a great deal of other products.

Restaurant Diversity

The restaurants in each location are custom-made and their selections are in line with the needs and needs of the clients in the location, the food on the menu would comply with the regional and ethnic tastes.

Brand Positioning

McDonald's Brand positioning is mainly carried out through sponsorship of incidents and activities. It sponsors occasions like Dome's community programme and learning experience and Child Basic safety Week.

Industry Analysis

Industry evaluation of an organization involves the examination in the next categories:

Customer Analysis

This identifies buyer force. The buyer has significant amounts of selecting power due to the fact that if they are dissatisfied with the food or service they can certainly switch or purchase from another product. Nonetheless it is undeniable that any business cannot satisfy the needs of all the consumers. Therefore group divides the market into segments which screen similar characteristics or habit is essential. McDonald's market segmentation is based on demographic variables Years and Lifestyle. The principal target marketplaces are seniors, individuals and teenagers, but the most seriously targeted segment is children.

The market segmentation of McDonalds can be visualized as follows:

Market Segments





Customers are those who pay money to acquire an organization's goods or services. For quite some time McDonald's generally targeted the young people, however it has changed in this decade; McDonald's has changed towards a far more general market. Using this method McDonald's concentrates on the family, targeting a diverse market

Competitor Analysis

It was said that "the JUNK FOOD industry is highly competitive" ("Data Warehousing RESEARCH STUDY: JUNK FOOD", n. d. ). McDonald's major Opponents include that Burger Ruler, Taco Bell, Subway, and Panera Breads. Especially, KFC, that provides fowl nuggets and fries on its menu, manages over an 11000 restaurants in more than 80 countries.

Fast food, especially fries, hamburger and so on, are believed as garbage-food because of high-calorie. You can find high likelihood of healthy substitutes posing a threat to these businesses. Of course, McDonalds is concentrating on the health part by advantages of healthy food items in the menu.

The following are the conclusions of the competitive position of McDonalds predicated on the Porter's five forces:


This involves how the company differentiates itself from its competitors. In case of McDonalds, as reviewed above the major competitors are Burger King, KFC and Wendy's. Though McDonalds is the Market Leader currently, capable of the rivals growing your competition seems strong. The rivals want to increase their sales by concentrating on the health factors.

New Entrants:

With so many popular fast food companies on the market new entrants are not much if a risk when seen internationally. McDonalds comes with an advantage over its opponents as it is internationally spread.


With realistic prices and quick service provided by McDonalds, there may be less opportunity for customers to go to competitors for the merchandise. With the introduction of the cordless facility in the some of the outlet stores has added to the attraction.


Except for the wintry drink from Coca Cola, the company doesn't have a single dealer at a worldwide level. For meat it has its own plantation and other recycleables are from local store


There are high likelihood of healthy substitutes posing a hazard to the business. Though McDonalds is concentrating on the health aspect by launch of healthy food items in the menu, it could still be posed with the task of substitutes.

Supplier Analysis

Supplier is an organization that provides resources for other organizations. In McDonalds three legged feces philosophy the 3rd knee is supplier associates. McDonald's has applied a backward vertical integration, by changing most of its suppliers. It has done so for just two reasons,

To reduce costs, and

To ensure that its products are of top quality.

These equipment include beef and dairy to be utilized in its products, which it gets from its farms. Other suppliers include local food markets that supply McDonald's with more fresh vegetables. Soft drinks are supplied exclusively by Coca-Cola, which is also its ally. McDonald's products also include raw materials such as flour, sweets, candida, etc.



Companies always operate in a more substantial macro environment of makes and trends that condition opportunities and post hazards. These forces represent "non-controllable" forces, which the company must screen and respond to. Generally, we identify macro environmental factors by an acronym, PESTEL.

P: Political System of the country.

E : Economical Factors

S : Sociable / Cultural factors

T : Technological factors

E : Ecological factors

L : Legal factors


McDonald's employees and job people are determined, trained, marketed and treated on the basis of their relevant skills, skills and performance and without reference to race, color, nationality, ethnic source, gender, marital position or disability. In support of this, McDonald's also offers an insurance plan on Intimate and Racial Harassment. All McDonald's restaurants work to specifications which meet the highest' best practice' guidelines for Building and Health and Safety regulations.


McDonalds is analyzing every aspect of its business in conditions of its impact on

the environment which is committed to waste minimization with a goal of an 50% volume

reduction. McDonalds works only together with suppliers with sensible environmental practices. It also has a administrator accountable for environmental affairs.

A revolutionary new static waste material compactor is currently in 60 restaurants, which reduces misuse volumes by an average of 40-50%. McDonald's is focused on using recycled materials whenever we can in its packaging and business generally. Waste oil makes up 10% of the restaurant's waste and is also recycled via local hobbyists at local refineries, into canine feedstock and other by products.

In Apr 1988, McDonald's switched to non-CFC foam packaging which holds the CFC-Free note. McDonald's is playing an active role in global initiatives to develop more green refrigerants.


McDonald's feels that it address public concern regarding nutrition via a combination of strict product standards, firmly enforced restaurant operating procedures, and close working relationships with suppliers to assure that McDonald's food is safe and of the highest quality. It also discloses nutritional and ingredient information regarding its menu items through in-store posters and brochures sent out upon request. In the early 1990's, international extension into new ethnicities and corresponding eating habits led to new product introductions in a number of locations. McDonald's new items generally receive no advertising and little sales promotion through the test period.


McDonald's corporation has built a whole selection of systems such as intranets, cellular applications or progressive kiosk systems, all predicated on Day's Communiqu. In their most recent effort, the company migrated their global internet existence mcdonalds. com to our platform.

An important component of McDonald's operational strategy is to anticipate customer traffic patterns and food selection based on a detailed analysis of sales history and trends. Restaurants use this information to prepare menu items in the right amounts and at the right times to really have the food ready for customers when they appear. To ensure freshness, all food not served within 10 minutes must be discarded.


During the late 1990's and the beginning of the new millennium, McDonald's found itself in a regression, the first one since its conception in 1955. The Yellow metal Arches weren't shining like they once do, however there are in the process of being polished, figuratively speaking. In 2003 McDonald's positioned eighth out of 100 brands in the Global Brand Scoreboard built by Interbrand Corporation and Business Week, showing that McDonald's is one of the world's best known & most valuable brands. However, that wasn't the truth during 2001 and 2002.


The legal platform includes that any company in the meals and Beverages industry should never transport goods that are harmful alive and property or that are contraband in mother nature. Example: illegitimate drugs and unlicensed arms and ammunition. McDonald's acts 100% beef, 100% poultry, and Grade A eggs. McDonald's food comes only from qualified suppliers who are audited and inspected frequently. A lot more than 2, 000 protection, quality and inspection bank checks surround McDonald's food as it goes from the farms to your restaurants. McDonald's requires that 72 safe practices protocols are conducted each day in McDonald's restaurants.

McDonalds's Talents Weaknesses Opportunities and Threats

Strong Player

Global Existence and Massive Size

Strong Brand Marketing

Outlets easily accessible

Consistency and Fast Service

Weak Product Differentiation

Slowed Revenue and income growth

Mature Industry

Strength of competition

More health conscious consumers

International Expansion

Only offering 1% of worlds population

Growing dining-out market


McDonald is a strong player in international market with his competitors scarcely half the business.

Global presence and considerable size allows him more diversification in food menu.

Exceptionally strong brand acceptance and extreme marketing.

A strong real real estate selection makes its shops situated in the areas which are often accessible

It gets the uniformity in his junk food supply and success of its food items


Lack of product differentiation. The competitors also caused the development of similar products.

Too many competitors entering the marketplace which reduces the business's potential to increase earnings and also brings about slow income development.


More international growth, as it still required penetrating in many countries especially in Asia, European countries and Latin America covering only 1% of world population

There has been a rise in the quantity of men and women who dine out, thus paving way for growth


Market saturation leaving less opportunity for growth and revenue generation.

Competitors are quite strong and increasing good market share with new innovations.

More people are getting health mindful and moving over to different eating habits.

Findings and Implications

Domination of the industry

McDonalds Company services the world's major chain of fast food outlets and has established as market Leaders. It offers a market show of around 7. 7% in the quick service industry in the United States. It holds a market of 43. 1% in the burger section. But it might need to increase in the non-burger fast food market.


As way as home market is considered there has the growth has slowed down.

The company's earnings grew by 9% to track record a $21. 6 Billion. The similar sales of the organization risen to about 5. 7% from the year 2005 and the machine wide sales risen to 7%. Income from carrying on businesses per common show was $2. 30 with $2. 03 in 2005.

The pursuing is a five yr analysis of the amount of McDonald's UK retail outlets and their pre-tax revenue:







No of restaurants






Pre-tax earnings (m)

100. 2

82. 3

127. 9

137. 5

141. 4

The Expansion of Mc Donald's in terms of restaurants may very well be below:

International Sector

McDonalds has extended to numerous countries across the world.

It has opened up 744 restaurants in 2006, closing the year with more than 31000 shops worldwide.

The company has clearly demonstrated intensive and impressive progress by increasing into markets across the globe, increasing penetration in to the existing marketplaces and stretches its product range to include exciting breakfasts. It is often conceived that McDonalds is nearing the finish of its extended growth period. But with increasing inhabitants throughout the world, assuming people take in three meals every day, it serves around 1% meals a talk about position that delivers possibilities for a great deal of progress within the industry. Competition is however aggressively snapping at the bottom of golden arches. A fresh genre of restaurants appears to have emerged in the market, dubbed as the 'fast casual'. They are offering consumers fresher, healthier plus more variety of food in a far more inviting atmosphere.


Prospects for growth


High Market Share

Mature Markets

Market leader in one product market

Maintaining Market Share

Substitutes stepping into the market

Maintaining Dominance in the market

Increase of Market size

Innovative redefinition of existing markets.

Expand into related product market

Maintaining good romantic relationship with customers and suppliers.

If high prospects for expansion then entry into alternative market

Buying a few of the emerging organizations in order to lessen competition through extension.

McDonalds is the company with the best market show in the Fast food industry. To be able to expand and increase further it is necessary for the business to expand the market itself. This is done by the advantages of innovative food items in the menu in order to attract all sorts of consumers. Without invention expanding the marketplace size might demonstrate advantageous to the competitors too.

Mature market segments can be handled by redefining the existing markets in a manner that from redefining new market segments are created in order to expand. To be able to redefine the market they can present jumbo size burger and sandwiches at reasonable price which is sure to entice more customers from all categories and hence expands the market.

Since McDonalds is market Leader in the Junk food industry, it can continue with the extension into other related industries. Like McCafe in the espresso industry, it can broaden into another field like having their own drinks produced and making.

In order to maintain its current market share it should continue to maintain good marriage with customers and suppliers by guaranteeing more quality to its consumers

When there's a threat of better substitutes entering the market, McDonalds can also enter the swap market if it has potential clients for growth and it is growing in its first stages that may avoid McDonalds from facing hazards. The major substitutes McDonalds have are the healthier ones. To be able to face the risk from substitutes, McDonalds can make their menu healthier, they can have a minimal fats menu items with sandwiches, wraps and burgers that are healthier

In order for McDonalds to keep up its market dominance, it can purchase small but rising firms in the industry so the competition reduce in number.













Market Penetration Strategies

Current Products: Big Mac pc, Grilled Chicken Foldovers, Beverages, France Fries etc.

Current Market: Students, Working Pros, families.

Collaboration with institutes, universities

Opening outlets at campuses, easily accessible places, commercial areas

Investments on advertisements, vouchers, coupons etc

Product Development Strategies

Introducing Fruit and vegetables food

Healthy and Nourishing products, e. g. Dark brown bread instead of white one.

Successful product launches in U. S. included High grade Roast Espresso, the Asian Salad and snack wrap.

Combination of continental food with local food at affordable price


Market Development Strategies

Entering into more developing countries

Offering franchise in new market

More Advertisement and promotion

Inaugural discounts

Providing account cards

Buying some rising firms

Diversification Strategies

New restaurants offering various cuisines

Cake shops, bakery items

Improving circulation or delivery service.

The Ansoff's Matrix depicts the marketplace expansion strategy for McDonalds.


The intensive research of McDonalds Company has been pursued. The business being the major player in the junk food industry has a competitive edge over the others within the industry. It has created great popularity between its customers especially amidst the youngsters who are McDonalds key aim for customers. The business does indeed face a threat of widening in the adult market and taking over by the competitors which has been highlighted. It includes several key strategies which if managed will continue steadily to stay as the leader in the fast food industry. The key factors being its quick and fast service, quality food, easily accessible and fair rates of the meals items. MEDICAL factor towards that your style is moving is to be considered by the organization which will be added advantages to its expansion and extension.

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