“As Thompson (1993) writes in one of his cases to explain what the competitive advantage means and how it can be achieved, McDonalds Company is the leader in its sector for five main reasons” (Markatos: 2006). McDonald’s is global and focuses on opening 500 restaurants every year. Their logo, golden arches is instantly recognizable and is placed in such a way that it’s clearly visible. In addition to this is their commitment to their parent company from the franchise branches and the ownership of real estate sites. Over the past few years they never tried to diversify or tried to sell any other food, but they just keep changing the product like adding breakfast and salads in America or position themselves next to military bases or in hospitals or venturing with companies like Walmart. Hence, there is a flexibility and change in the products as they adapt to different countries by selling appropriate products in each occasion, e.g., bone in fried chicken, McCrispy in Japan, Maharaja Mac Sandwich in India or McO2 in Australia. McDonald’s company earned a competitive advantage (Markatos: 2006).
“McCarthy, 1975 formulated the concept of 4 P’s – product, price, promotion and place marketing mix. For many years these are being used as the principle foundation on which a marketing plan is based. However, with particular attention being given to services marketing in recent years theorists have identified additional variables which could be added to the 4 P’s which is process, physical and people. It is these 7 P’s that will use in analyzing the marketing mix of McDonalds.
Products – features quality, quantity.
Place – location, no. of outlets.
Price – strategy determinant levels.
Promotion – advertising, sales promotion, public relations.
People – quantity, quality, training, promotions
Process – blueprinting, automation, controlled procedures.
Physical – cleanliness, décor, ambience of the service”
(Vignali: 2001)
Products –
McDonald’s focuses on strategy of standardizing all their products which means the taste same whether in Singapore, Spain, India or UK. There is a huge cost saving by adapting standardization but it also helps to adapt in an environment which ensures success. Hence, “think global, act local” has been adopted by McDonalds. For several reasons including tastes and preferences of customers and law and customs adaptation is important. There are many examples where McDonald’s has adapted product because of religious laws and customs in a country. Best example is in Israel where after protest big Macs are served without cheese in several outlets thereby separating meat from dairy products as required by Kosher restaurants. Also, outlets in India serve vegetable mcNuggets and mutton based maharaja Mac instead of beef which is not accepted by Hindus and Muslims do not eat pork. In Malaysia and Singapore, McDonald’s had to go through high level of inspection by Muslim clerics to make sure ritual cleanliness and the restaurant awarded with a HALAL certificate which means it is clean and acceptable to the locals. There are many examples of how McDonalds adapted the original menu to meet the customer’s needs and wants in different countries such as guava juice was added to the menu in tropical countries while beer as well as McCroissants is served in Germany and McSpaghetti in Phillipines.(Vignali, 2001). “McDonald’s have made such a fetish of its deep fried potatoes and continuous to work on improving the delivery of its industry winners” (Vignali, 2001). In terms of quality there is an assurance team which monitors and is responsible for the food products starting from the suppliers until the restaurants. This involves continuous inspections, audits and visits both announced and unannounced to the production facilities, distribution centre’s and to the restaurants. These visits could also extend to secondary suppliers such as farms to monitor the crop. This is a global practice and is one of the distinguishing features of McDonalds as a fast food restaurant. (Vignali: 2001)
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