What is McDonald's main competitive advantage?
Cheat prices is McDonald's main competitive advantage. The company is engaged in an extensive utilization of economies of scale to achieve the cost advantage. True to 'fast food' format of its restaurants, McDonald's is famous for the speed of customer service without compromising the quality of the service.
| Rank | Location | Number of McDonald's |
|---|---|---|
| 1 | United States | 14,146 |
| 2 | Japan | 2,975 |
| 3 | China | 2,391 |
| 4 | Germany | 1,470 |
McDonalds uses both informative and persuasive adverts, the informative ones are about eating healthy and the persuasive ones persuade people to buy the food sometimes, with TV adverts they show people eating the food and really enjoying it.
Business Model
McDonald's can leverage its market position to negotiate deals because it has control over the land and long-term leases. This is akin to a subscription, where the subscriber (the franchisee) pays a fixed amount each month.
The first key to McDonald's success is their uniformity. Whatever country you visit a McDonald's in, you are assured the same quality, experience, and food. Consumers rely on consistency, admiring the equal value regardless of the location. The second key to McDonald's global success is their cultural awareness.
The Top 10 Fast-Food Restaurants by Sales in America
McDonald's: $37 billion in system-wide U.S. sales. Starbucks: $13 billion in system-wide U.S. sales. Subway: $10.8 billion in system-wide U.S. sales. Burger King: $10 billion in system-wide U.S. sales.
Adaptation strategy
With this strategy, McDonald's adapts to the needs of the consumers as required by the cultures of specific countries. Adaptation works very well for McDonald's. The strategy enables the fast food chain to have a wider reach worldwide.
McDonald's uses a value-based pricing strategy and strives to provide value to its customers across the menu, and also offers a $1-3 menu. In essence, their goal is to keep prices as low as possible.
In McDonald's the business strategy for the company is to make food fast available to its customers at a very low competitive price but to get profit as well by reducing the cost of the product and expanding the business world wide. Operations strategies play a very important role in achieving organizational goals.
McDonald's primary generic strategy is cost leadership. In Porter's model, this generic strategy involves minimizing costs to offer products at low prices. As a low-cost provider, McDonald's offers products that are relatively cheaper compared to competitors like Arby's.
What made McDonald's different from its competitors?
Quality in Product -As the machines handled most of the tasks, the McDonald brothers were free to work on the quality of the product at every step. That further enhanced the quality of Hamburgers, fries, and beverages.
Global Presence: One major source of competitive advantage for McD is its extensive global presence. McDonald's restaurants are mainly run through independent franchisees in more than 100 countries. The franchisees own and operate more than 90% of McDonald's restaurants globally.
The brand value is closely related to the brand recognition and reputation. Usually, the more valuable a brand is the better it is recognized worldwide. McDonald's, which operates in 120 countries, where billions of people live, enjoys some of the greatest brand awareness among all global corporations.
Strong brand name. McDonalds has been around since 1954 and has established a strong brand name through effective promotion and quality fast food. Strong brand loyalty. Consumers have loyalty for McDonalds because of their product variety, quality and strong brand presence globally.
Our mission is to make delicious feel-good moments easy for everyone. This is how we uniquely feed and foster communities.
The customers were allowed to view the kitchen and the supporting areas where the food is prepared & processed. So, McDonald's Value Propositions were Quicker Service, Lower Price, Quality Food, Quality Experience, and Cleanliness.
McDonald's is one of the largest and most well-known fast-food chains in the world. Privately-owned Burger King is McDonald's closest competitor. Yum Brands operates Taco Bell, KFC, and Pizza Hut.
There are three main types of sustainable competitive advantage: differentiation, cost leadership, and focus advantage.
Global Presence: One major source of competitive advantage for McD is its extensive global presence. McDonald's restaurants are mainly run through independent franchisees in more than 100 countries. The franchisees own and operate more than 90% of McDonald's restaurants globally.
