McDonald’s Corp Essay Example

industry, McDonald's acquired two new chains in the late 1990s: Chipotle, a Latin American fast food chain in 1998, and Donato's Pizza from Ohio in 1999. That same year, McDonald's expressed interest in purchasing Boston Market restaurant chain after it filed for bankruptcy. Boston Market specialized in meal replacements but had limited full-service restaurants (FSR). In 2000, the acquisition was approved and marked McDonald's first major purchase outside of the QSR realm. Responding to criticisms about their food's nutritional value and attracting health-conscious consumers, McDonald's added healthier options such as high-quality salads and fresh fruit.

In 2004, McDonald's ceased offering "supersize" menu items and were the first fast food chain to provide nutritional information on their packaging in 2006. The updated packaging presents bar charts and icons for calories, protein, fat, carbohydrates, and sodium. Despite competition from rivals, McDonald's has a market share of almost 45% in the US foodservice industry thanks to innovation, marketing efforts and market penetration which resulted in value share growth between 2000-2005. However, with the McDonald's brand reaching saturation point in its primary market, there are now challenges for further expansion.

The company initially adopted a diversification strategy, which involved acquiring Chipotle and Boston Market. However, McDonald's has recently shifted its focus to increasing unit same store sales by introducing new products and enhancing its value menu. Notable additions include premium chicken breast sandwiches, premium salads, and the Chicken Snack Wrap, which features crispy chicken, cheddar jack cheese, and ranch dressing wrapped in a soft tortilla. Chipotle, a leader in fast casual Latin American fast food, is owned by McDonald's and is the largest fast casual Latin American restaurant. Although Taco Bell

dominates the Latin American fast food market, McDonald's plans to divest Chipotle by the end of 2006 to concentrate on its fast food hamburger chain and allow for the purchase of McDonald's shares using appreciated Chipotle stock without facing taxation on the appreciation. (www.)

According to datamonitor.com, McDonald's initially purchased Boston Market because of its real estate value, but the fast food chicken chain has since become a valuable brand due to McDonald's diversification efforts. Since the acquisition in 2000, the Boston Market brand has seen an increase in sales. Unlike fast food chicken chains such as KFC that primarily sell fried chicken items, Boston Market specializes in high quality home meal replacements such as rotisserie chicken. As consumer demand for convenient meal options continues to increase, particularly for healthy and high quality food, it is expected that Boston Market will continue to perform well.

McDonald's strategy is focused on offering a varied selection of traditional burgers, premium products, and value items to appeal to a broad range of customers. Their objective is to expand their business and boost sales at existing locations by concentrating on five essential elements: people, products, place, price, and promotion. By prioritizing these fundamentals, McDonald's aims to improve customer satisfaction and increase overall profitability.

As the biggest restaurant chain worldwide, McDonald's aims to create diverse customer experiences that foster loyalty and profitability. Despite media scrutiny of its food offerings, the company remains committed to promoting healthy lifestyles through balanced menu options. In fact, McDonald's was the first fast food restaurant to include nutritional information on their packaging in 2006. To appeal to mothers, they introduced premium salads, chicken sandwiches, and apple slices.

Additionally, during a global campaign coinciding with the Olympics, McDonald's used athletic role models such as Venus and Serena Williams to promote exercise and nutrition.

Although the company is making efforts, it is still encountering negative publicity due to the growing obesity problem in the US. Despite this, McDonald's is anticipated to uphold its powerful market presence and experience growth and expansion worldwide, thanks to its well-known brand, extensive outlet coverage, constant menu updates, and affordable pricing, supported by significant yearly investments in marketing and advertising. Visit www.mcdonald's.com for more information.