Unit II Case Study Essay

Unit II Case Study
John Mejia

Columbia Southern University McDonald’s Corporation continues to function as the leader in the fast food industry by focusing on superior customer service, quality menu choices and a deep understanding on social responsibility. In 2013, McDonald’s reported that they served over 70 million customers per day (McDonald’s Corporation, 2013). The target audience for McDonald’s includes a vast majority ranging from children to older adults. Because of this, they offer an equally varying range of menu items including hamburgers, chicken sandwiches, salads and drinks. In comparison to two of their main competitors, Burger King and Yum! Brands, McDonald’s revenue in 2008 was over 22.99 billion while Burger King reported 2.55 billion with Yum! Reporting 11.08 (David, 2011). McDonald’s strengths are the main reason why they lead the pack in the fast food industry. One of their major strengths is how they develop their menu, either by offering lower priced items or by creating healthier products. Most recently their McCafe has dived into the coffee market by offering their customers an alternative to higher priced coffee institutions such as Starbucks. McDonald’s dollar menu has been another driving force for customer traffic by delivering lower-priced items. Some may consider this as both a positive and negative with the lower priced food items cutting into the profits of their more expensive menu items. In order to compete, Burger King replicates the dollar value menu, offering lower priced hamburgers, sandwiches and sides. McDonald’s view on expansion is another one of their strengths as they opened more than 1,400 restaurants in both established and emerging markets in 2013 (McDonald’s Corporation, 2013). This dedication to growth can help an organization gain more recognition against their competition. “Competition in virtually all industries can be described as intense – and sometimes as cutthroat” (David, 2011, p.71). To combat McDonald’s large footprint, Burger King has been able to form partnerships with different government entities including the Army Air Force Exchange Service. This move has helped Burger King corner one particular market that is entirely their own. McDonald’s other main competitor, Yum! Brands are also able to cut into McDonald’s profits by offering different product lines. Some of their restaurants include, Taco Bell, Pizza Hut and Kentucky Fried Chicken. “Offering more than one brand at a single location has helped Yum! increase traffic at a single real estate location” (David, 2011, p.34). It is not unusual to see a Pizza Hut and Taco Bell co-located in the

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