Gap – Analysis – McDonalds

McDonald’s is the world’s biggest Fast Food operator, operating more than 30. 000 outlets in more than 120 countries. In the UK McDonald’s Restaurants Ltd operates 1200 stores, of which 70% are company owned. McDonald’s generally sets the highest standard for itself, yet most are not achieved or public perception differs from that of the company’s. McDonald’s is perusing a value strategy offering its products at relatively low prices. They differentiate their products through successful branding campaigns.

Although McDonald’s try to maintain an image of high ethical responsibility major gaps have been identified. They manage to disguise a considerable part of these gaps through effective communications. However major gaps remain in terms of working conditions and animal welfare treatment. Great efforts have been made to create an environmental friendly image, in the outlets and on the supplier side. The recent financial performance has poor and clearly failing their aim of ‘system growth’. Closing this gap will be one of their main priorities.

Reducing all other gaps will be essential in closing the financial gap. Findings are set in respect to McDonald’s competitors. Terms of reference The Research Team of the Financial Times has been asked to conduct a Gap Analysis for the MNE McDonald’s Restaurants Ltd. The report will be handed over to Mr A. P. Davies on the 31st of March. Objectives Company aims and policies in the categories of Product ; Market Strategy, ethical stance, environmental policies and financial performance are stated. Company actions to achieve goals should be recognized.

Possible gaps are to be identified and their extent analysed. Recommendations to reduce or eliminate gaps should be found. Research approach To gather relevant information our team consulted McDonald’s Annual reports, relevant literature, market reports and Internet websites. Also investigated were competitors and their business, their product and market strategy, ethical stance, environmental policies and financial performance. Background ‘McDonald’s is probably the best-known franchised fast food restaurant chain in the world […].

When the first outlet was opened in the US in 1955 and even when the first UK restaurant appeared in 1974, it would have been hard to imagine a worldwide network of 30,000 outlets by 2002 and 1,200 outlets in the UK. McDonald’s is easily the largest fast-food brand in the world and instantly recognisable in many countries. Across the global network, the majority of outlets are operated by franchisees but, in the UK, only a third are franchised although this percentage is increasing.

‘ McDonald’s has been growing organically, with new sites located in smaller towns, roadside developments and food court concepts in leisure parks and shopping centres. (Keynote, 2002)McDonalds’ aim (‘vision’) is to be the ‘world’s best quick service restaurant experience. This means running and opening great restaurants and providing exceptional quality, service, cleanliness and value (‘QSC;V’), so that we make every customer in every restaurant smile’. Usually, local management teams who know its market firsthand run product and market strategies.

Consequently, the strategies applied to the UK market will be investigated. Generally McDonalds pursues a value strategy offering its products at relatively low prices. McDonalds targets primarily children (Happy Meal, toys, adverts) in the hope to build a life long customer relationship and future brand loyalty. McDonalds focuses on maintaining a powerful brand to differentiate its core products (Big Mac, French Fries) and create barriers to enter the market.