Staying ahead in a competitive environment
A McDonald's Restaurants case study

Page 1: Introduction

For any business, becoming and staying the market leader is a huge task, even for household names such as McDonald's. Keeping ahead involves continuous hard work to enhance the reputation of the brand, coupled with product innovation based on detailed market research that indicates how to please customers. McDonald's has built its success around a formula of providing a range of standardised...
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Page 2: The competitive environment

For businesses to understand adequately the nature of the competition they face, they must define their market accurately. This involves recognising a broad base of competitors. McDonald's has thousands of competitors, each seeking a share of the market. McDonald's recognises that it is up against not only other large burger and chicken chains but also independently owned fish and chips shops...
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Page 3: Consumer trends

Over time, consumers' tastes evolve in response to changing fashions and greater awareness of alternative lifestyles. Businesses need to monitor these changes and, whenever possible, anticipate them. In terms of the product life cycle, quick service restaurants have reached maturity in the UK and need an injection of fresh life through innovative ideas if their lifespan is to be...
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Page 4: The marketing mix

Enlightened businesses respond to the data they gather through market research by providing the best possible marketing mix (the four P's) for their customers. This involves providing: appropriate products e.g. chicken as well as beef, salad items, and healthy drinks for children the right price: in this case providing food and drinks in a value for money way in the right place (at convenient...
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Page 5: The McCafe Concept

Even mature markets can have gaps in provision that leave some potential customers unsatisfied. The McCafé development is the result of intensive market research that has identified a group of potential customers that had remained largely untapped. McDonald's recognises the importance of listening to the needs and requirements of this substantial group of users. McCafé provides an...
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Page 6: A casual welcoming environment

The emphasis is on a casual coffee experience in a comfortable place where people can relax and feel welcome. At the same time, McCafé's association with McDonald's brings with it a 'Family Friendly' environment and, unlike some of the more pretentious cafés, a place where children are welcome and specifically provided for. The convenience of car parking and playgrounds also makes...
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Page 7: Conclusion

As the market leader and as a pioneer of the Quick Service Restaurant concept, McDonald's has to respond to a changing business environment. It is well placed to do so. It has listened to its customers, and also observed them. Based on its research, it has launched McCafé and McChoice - new products conceived and designed to complement and extend what it already offers and to keep the...
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