McDonald’s is a multinational company operating in more than 117 countries with more than 32,000 McDonald’s restaurants. Most of the McDonald’s restaurant are owned by independent owners worldwide (Miranda, 2017). The history of McDonald’s is that it initially started as being a small hamburger stand in Bernardino California, which was owned by Dick and Mac McDonald. Later on they had a determination to develop their business, so they decided to close their business for 3 months and later on re-opened it on 1948 as a self-service drive in restaurant serving only 9 items (Miranda, 2018). Later then in 1954, a salesman known as Ray Kroc signed a franchise agreement with Dick and Mac McDonald opening his first McDonald’s, it is then when McDonald’s starting growing its successful fast food restaurant. (Meyer, 2018).

McDonald’s Corp., a leading global fast food chain, which offers sandwiches and sides (cookies/chips) and drinks (juice, water, soda) like its competitor Subway, is the company to be analyzed with the matrix in this paper.

1. The BCG Matrix for McDonalds will help McDonalds in implementing the business level strategies for its business units. The analysis will first identify where the strategic business units of McDonalds fall within the BCG Matrix for McDonalds.
2. BCG MATRIX OF McDonald’s The need for strategy, in order to expand its existing product in very promising market for McDonalds is very essential. McDonalds and other major fast food chains have dominated the American continent as well as elsewhere.
3. BCG Matrix in the Marketing strategy of McDonald’s – Hamburger, MacAloo Tikki and French fries are stars. A non-veg menu of McDonald’s is not that popular and that’s why it is a question mark. It’s Desert menu is struggling to attract customers, and that’s why it’s in Dog in BCG matrix.

BCG – Matrix

According to Smart Insights (2018), there are mainly 4 types of quadrants in a BCG growth matrix which are the Dogs; which are the products with low growth and market share, Question marks; these are the products with low market share but high market growth, Stars; segments which compete and operate in high sales growth industry and have high market share. Cash cows; these are the products with low market growth but high market shares.

According to Kasi (2018), McDonalds has the highest market share in the fast food industry compared to its core competitor, the Yum brands, which owns KFC, Pizza Hut, and Taco bell. McDonald’s has segmented its operations into 4 geographical areas which is America, Europe, APMEA (Asia Pacific, Middle East, Africa geographical region) and other.

Mcdonald 27s Bcg Matrix Portal

Application of BCG Matrix on McDonald’s

Stars: Kasi (2018) mentioned that McDonald’s Europe segment will come into the category of stars because in 2015 and 2016, Europe has generated the highest revenue for McDonald’s, and it requires effective market development and strategies for market penetration to evolve this segment into cash cow for financial stability in the long run.

Cash Cow: He also mentioned that the American segment of McDonald’s reported 31% share of revenue in their annual sales. But on the other hand, Kasi (2018) also mentioned that the American segment has a very tough competitive environment, where customers can replace McDonald’s with substitute restaurants. And there is also the risk of high entrants, as fast food businesses requires less start-up cost with a unique product for differentiation which can attract customers to try out new menu’s instead of dinning in the same restaurant throughout, or new firms entering the market can try to imitate McDonald’s key selling product which is the beef burger and be able to sell their products with a lower price by cutting down on their costs in other to drag customers towards them. McDonald’s should focus on including new products into their menu, target more market segments, identify their needs of cuisines and satisfy them accordingly.

Question Mark

The APMEA geographical segment can be considered in this segment of McDonald’s, The core competitor of McDonald, Yum brands has been establishing new franchise every day in this region, even though McDonald’s is huge sales growth in this region, they are unable to take advantage of this opportunity because McDonald’s was not unable to compete with its competitors. It order to overcome this situation in this region, McDonald’s should focus on market development of its products, and come up with product development strategy and they should also increase their franchisees outlet in this region according to the need of its customers like how they tailored their menu in India by introducing the Veggie burgers in order to capture the market. If McDonald’s is able to successfully implement these strategies, they will be able to turn this segment into a star quadrant of the BCG matrix.

Mcdonald 27s Bcg Matrix Energetics

Dog

As this segment is composed of low sales and low market growth, it is a bad decision for McDonald’s to continue business operations in this segment, thus if any of its outlets fall in this region, they tend to close it down in order to save their brand image. Thus, none of McDonald’s segment falls in this category.

References

Kasi, K. (2018). BCG matrix of McDonald’s. [online] BCG Matrix Analysis. Available at: http://bcgmatrixanalysis.com/bcg-matrix-of-mcdonalds/ [Accessed 16 Jun. 2018].

McDonald Steel. (2016). Mission, Vision and Values – McDonald Steel. [online] Available at: http://mcdonaldsteel.com/mission-vision-values/ [Accessed 16 Jun. 2018].

Mcdonald's Bcg Matrix Chart

Meyer, P. (2018). McDonald’s Vision Statement & Mission Statement Analysis – Panmore Institute. [online] Panmore Institute. Available at: http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis [Accessed 16 Jun. 2018].

Bcg Matrix Analysis

Miranda, B. (2017). [online] Available at: http://mcdonaldsteam3.blogspot.com/2010/05/mcdonalds-introduction.htmlhttp://mcdonaldsteam3.blogspot.com/2010/05/mcdonalds-introduction.html [Accessed 16 Jun. 2018].

Miranda, B. (2018). McDonald’s Introduction/History/CEO. [online] Mcdonaldsteam3.blogspot.com. Available at: http://mcdonaldsteam3.blogspot.com/2010/05/mcdonalds-introduction.html [Accessed 16 Jun. 2018].

Smart Insights. (2018). How to use the BCG Matrix – Smart Insights Digital Marketing. [online] Available at: https://www.smartinsights.com/marketing-planning/marketing-models/use-bcg-matrix/ [Accessed 16 Jun. 2018].