1. How important are efficiency, quality, customer responsiveness, innovation to McDonald's competitive position?
2. Does McDonald's have any distinctive competencies? If so, how do they impact the business?
3. Is McDonald's pursuing a low cost strategy, or a differentiation strategy?
4. Why did McDonald's start to lose its competitive advantage in the 2000s? What did it do to halt the erosion in its competitive position? What does this teach you about the sustainability of competitive advantage?
Started in 1955 by Ray Kroc, McDonald's franchising fast food concept has grown to be the largest restaurant chain in the world. McDonalds's success was built upon giving consumers value for money, good quick service, and consistent quality in a clean environment. Using standardized processes, McDonald's could ensure increased productivity and consistency in service for all consumers. As McDonald's was able to develop supply chain relationships and realize economies of scale in purchasing, consumers received cost savings through lower priced meals which subsequently drove increased demand and brand loyalty. However, by the 1990s and early 2000s, McDonald's contributions to obesity, high fat foods, and image had been tainted. McDonald's was faced with the action of corporate makeover. By changing top management, adding healthier options, performing consumer research, adding new beverages, and new restaurant designs, sales and profits are growing with more customers and increase in perception of quality.