Based on what you know about the quick-service restaurant industry, does McDonald's strategy as described in Concepts & Connections 1.1 seem to be well matched to industry and competitive conditions? Does the strategy seem to be keyed to a cost-based advantage, differentiating features, serving the unique needs of a niche, or some combination of these? What is there about McDonald's strategy that can lead to sustainable competitive advantage?
McDonald's market growth despite the recent global economic challenges is a clear indication that their strategy is well matched to both industry and competitive conditions. Total 2011 revenue of $27.0B up from 2010's $24.07B revenue demonstrates the effectiveness of their value proposition, while an operating income of $8.5B demonstrates the efficiency of their operations.
Does the strategy seem to be keyed to having a cost-based-advantage, offering differentiating features, serving the unique needs of a narrow market niche, or being the best-cost provider?
McDonald's is moving towards a best-cost strategy. Their key initiatives include a strong value proposition aimed at providing better quality products and services while keeping strict price controls in place. Their affordable pricing is being made possible by strict cost control across the entire enterprise.
What is there about the action elements of McDonald's strategy that is consistent with its approach to competitive advantage?
Their competitive advantage is in delivering quality products and services at lower prices. Their action elements of
(1) Improved restaurant operations,
(2) Affordable pricing,
(3) Wide menu variety and beverage choices all work together to provide competitive advantage.
From the information provided, which tests of a winning strategy does McDonald's strategy pass?