Sunday, March 15

Product positioning map for McDonald's

How the product positioning is aligned with MCD corporate strateg?



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McDonald has perceived product-positioning maps in comparison to their corporate strategy do line up to what is expected. There are areas for improvement in relation to their direct competition in every town. In reference to EPS/EBIT, it is relevant to their strategy implementation.
McDonald’s product positioning maps do line up with their corporate strategy. Their strategy or motto is “Plan to win”. When I think of a fast food restaurant winning, I think of winning over the masses of customer traffic. They certainly do this well. What makes up this strategy is; continued growth in the US and abroad, being a sustainable company, new items, new designs of business models, and remaining very competitive (NMINM's University, "n.d."). There is nothing about being the best quality, friendliest customer service, healthiest option, or most comfortable atmosphere. In these categories, I feel that they want to just do better than they have in the past with continued improvements. When you look at these product positioning maps, they tend to fall on the lower ends and very conservative in many fields such as atmosphere, quality, healthy choices, and limited choices (NMINM's University, "n.d."). Areas they tend to do better than some of their competition is speed of service, taste, and price (NMINM's University, "n.d."). This is in line with sales. These are the categories that the masses of customers tend to pay more attention to. There are over 32,000 units open and with them be accepted with taste, speed of service, and especially price, this is the draw for the majority of customers (David, 2011).

How the product positioning is aligned with MCD corporate strategy
When it comes to gaps or their weaknesses, Burger King and their fresh ground beef patties wins in the industry for quality. Chick-fill-A will win in the customer service. For areas like these, it would be a major strategic change in business that they may never try to win in these areas. It may not be accepted for such a change with their customer base due to it affecting the pricing strategy that they have. Customer service does not cost a thing. This all comes down to the expectation of what the company is willing to except from their employees. This could be a problem from their hiring committee. Hiring higher quality employees could affect their price strategy. When it comes to healthy choices, McDonald’s has recognized this as an area they need to make some changes and have done so with the oil that they use, offering apples instead of fries at the customer’s request, and lower calorie fries (McDonald's, "n.d."). With all of these changes, it is still too early to access if these tactics will change the mindset of the American people.
Relevance of the EPS/EBIT chart and why it is significant with respect to strategy implementation
The relevance of their EPS/EBIT analysis in comparison to their strategy implementation coincides very well. With their strategy to continue to grow here in the US and abroad while being a more sustainable business, and continue to introduce new product lines and new business designs all cost money to fund these strategies. After conducting the analysis, the debt-financing model seemed to work better than the other options for funding these strategies. Their EPS during a recession was 3.86, normal was 4.68, and the boom was 5.49, which was not a big benefit over the common stock or combination model on paper. In dollars, I am sure that this adds up to many millions of dollars saved. Any savings that they can keep in the bank will allow them to continue to produce their food as they have done for years at a low price in comparison to the industry. (David, 2011).
When it comes to making the customer happy, they tend to spend their money where they are comfortable, enjoy the food that they eat, and get these items at an acceptable price. With the real-estate that McDonalds covers here in the US and abroad, sometime the convenience will outweigh some of these other categories where they may not be the industry leader. With their financials in check, they will be able to continue this growth and provide goods and services at a good price for their customer base. With their plans for the future, they will continue to introduce these new items and new venues that have never been seen that will continue their foot traffic even more.



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References
David, F. R. (2011). Strategic Management: Concepts and Cases (13 ed.). Upper Saddle River, NJ: Person.
McDonald's. ("n.d."). Nutricional Choices. Retrieved 11 20, 2013, from http://www.mcdonalds.com/us/en/food/food_quality/nutrition_choices.html