Mc 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.
2.1 BACKGROUND OF MC DONALD
In 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 DESCRIPTION
McDonald'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 CafÃÂ© is a chain of coffee houses selling sandwiches and desserts.
3.0 Situation Analysis
In 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 Analysis
3.1 REASONS FOR POOR PERFORMANCE
McDonald'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...