Mcdonald's Case Study

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According to Michael Porter, there are three generic strategies that a company can use to achieve competitive advantage: Overall Cost Leadership, Differentiation, and Focus (Dess, McNamara, & Eisner, 2016). Applying this concept to the McDonald’s case, it is possible to infer that the primary generic strategy adopted by the company is cost leadership (Gregory, 2017). A strategy of Overall Cost Leadership is based on attracting customers using a competitive advantage based on low cost (Dess, McNamara, & Eisner, 2016). According to the last annual report, the price is one of the bases of the firm’s competition (Annual Reports, 2016). To ensure low prices, McDonald’s needs to implement some of the most important tactics required by the…show more content…
Beyond the cost strategy, McDonald’s uses the Differentiation as a secondary/supportive generic strategy (Gregory, 2017). Differentiation consists of creating differences in the firm’s product or service offering by creating something that is perceived industrywide as unique and valued by customers (Dess, McNamara, & Eisner, 2016). The firm’s vision is to be the world’s best quick service restaurant experience (McDonald 's, n.d.). To achieve this ambition, the company needs to provide outstanding quality, service, cleanliness, and value (McDonald 's, n.d.). In the beginning of the McDonald’s history, it is possible to identify these efforts in all restaurants; however, it seems that the company has lost its ability to create differentiation among its competitors, and, most important, customers have not perceived value in its experience. According to the last report regarding fast food industry developed by The American Customer Satisfaction Index (ACSI’s), McDonald’s received a low score in customers satisfaction (69/100), falling behind several critical competitors (Cox, 2016). The company has been working to reverse its scenario, investing in Marketing, developing promotional and public relations activities to promote McDonald’s brand and differentiate the firm from competitors (Annual Reports, 2016). The company recognizes that compete successfully in the current market depends on the firm’s ability to improve

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