McDonalds Business Strategy Essay Example | Topics and Well Written Essays - 9500 words

McDonalds Business Strategy - Essay ExampleBy 1968, the chain comprised 1,000 units, which rose to 5,000 units by 1978. By 2001, the company operated around 30,000 units worldwide. Whilst keeping menus limited, McDonalds diversified its range from its genuine hamburgers and cheeseburgers. In 1964, the company launched its Filet-o-Fish machinate, followed by signature burger the Big Mac in 1968, Happy Meals in 1979 and fearful McNuggets in 1983. (Keynote, 2003 Leitch 2004) While the majority of sales remain concentrated on burgers and fries, drinks and desserts are important and the scratch periodically experiments with other menu additions, such as salads and local specialities. McDonalds currently gearing up for the introduction of a new salad range in 2006.The late-1990s saw McDonalds shift its focus, as burger fast food, particularly in the US, seemed dangerously crowded and mature. Consequently, McDonalds focused on diversification, introducing new menu items and aiming to a ttract a more adult demographic, while retaining its centerfield consumer base of children. 2000 saw the introduction of salads, low-fat desserts and a wider choice of volaille and fish burgers. The company similarly began to relax the McDonalds formula, introducing more regional menu variations and experimenting with new formats, such as cafs and kiosks. This strategy of diversification excessively resulted in a number of acquisitions during the review period, seeing a shift away from its traditional single- strike off focus. In 1998, McDonalds secured London-based coffee chain Aroma and in 1999 and 2000 McDonalds purchased US chains Donatos Pizzeria with an emphasis on home-cooked meal style fast food.... The company also began to relax the McDonalds formula, introducing more regional menu variations and experimenting with new formats, such as cafs and kiosks. This strategy of diversification also resulted in a number of acquisitions during the review period, seeing a shift aw ay from its traditional single-brand focus. In 1998, McDonalds purchased London-based coffee chain Aroma and in 1999 and 2000 McDonalds purchased US chains Donatos Pizzeria (Ohio based), Mexican self-service cafeteria brand Chipotle (Denver based) and Boston Market with an emphasis on home-cooked meal style fast food. Beyond acquisitions, McDonalds also do a series of strategic investments. In February 2001, McDonalds acquired a minority interest (33%) in the British sandwich chain Pret a Manger. In 2002, McDonalds formed a joint venture with Fazolis, a fast day-after-day Italian restaurant concept based in Lexington, Kentucky, to develop 20-30 Fazolis restaurants in the US. (Leitch 2004) This also gave McDonalds the option to purchase the entire company at a later date. The company also opened its first multibranded unit, fling Boston Market, Donatos and McDonalds. However, these acquisitions did not prove wholly successful. In 2002, the company experienced a difficult year, culm inating in its first ever quarterly loss. This poor performance was partly due to weak economies in Latin America and APMEA (Asia-Pacific, Middle East and Africa) and to increasing competition in mature US and Western European fast food. However, the company also felt that its strategy of brand diversification was diluting its focus on core brand McDonalds. In 2002, Aroma was sold to Caff Nero and in 2003