Reasons Why Burger King Is Better Than McDonaldsEssay Preview: Reasons Why Burger King Is Better Than McDonaldsReport this essayStrategic Management and Business Policy (MGNT 341)CASE STUDYon(Top Ten Reasons Why Burger King is better than McDonalds)Submitted By:Bernas, Arthaliah Grace B.Grabato, Christine Joy G.Maratas, Loligen Art O.Morales, Adraine KayleTeodosio, Rozel Grace Z.Submitted To:Ms. Ma. Aurora A. Villanueva, PhD.July, 05 2018I. PROBLEM        Through the years, McDonalds has been on the top of any other fast food chain in the industry.  In the minds of customers, creating a uniform and consistent product is one of the most important aspects of McDonald’s success. No matter where you go, once you see the ubiquitous “golden arches” you know exactly what you’re going to get. Especially when you’re in a hurry, why take the chances with someplace else? They’re not known for high quality food, service, or atmosphere—but as evident from the enormous amount of customers they serve, McDonald’s is the clear leader in cost, speed and consistency.        However, as the years passed by and competitors, such as the Burger King, had its big break, the once successful McDonalds started to lose the brand it has persistently built for years.        According to surveys, Burger King has better and more food and toy offerings than McDonalds. Also, the consumers are not satisfied with McDonalds slow service and extra charges. And lastly, consumers think that Burger King has better deals than McDonalds, which renders McDonalds as an overrated fast food chain in America.        All these opinions from consumers boil down to one main problem- because of McDonalds consistency, it has failed to go with the flow of the ever changing social preferences of the market. Thus, Burger King has taken over its place as number one.II. OBJECTIVES                To further understand and gain extensive knowledge regarding the given article, this output is accomplished thorough research and analysis concerning the problem of McDonalds with the following objectives.On the completion of this case study, the researchers will be able to:Determine the statistics, surveys, and data of McDonaldsFigure out the weak points of McDonalds and come up with solutions to eliminate these factors based on their SWOT analysisProvide a recommendation as to how McDonalds could improve their services and productsCome up with strategies that will attract more customers, and, strengthen and maintain McDonalds’ standing in the fast food industryUnderstand how competition in fast food chains work Discover the key factors that make a fast food chain stand out among others and the factors that can cause a fast food chain’s downfall III. AREAS OF CONSIDERATION        McDonalds began its humble beginnings in the 1940s in San Bernardino, California when the McDonald brothers Richard and Maurice opened their first restaurant which focused on a limited menu such as burgers, fries and some beverages. The problem that they had is how to compete with others in the same line of business and realized immediately how popular quickly served meals have been, and decided to use a Speedee Service System which allows the, to make burgers at a faster rate without compromising the quality of their products and service. Meanwhile, they were looking for a new franchising agent and until sales-minded Ray Kroc got the opportunity and founded the McDonalds System Inc., a predecessor of McDonalds Corp. and now successfully established in more than 100 countries. But what happened after almost 78 years of legacy for McDonalds is what we will find out.
Strengths1. The second-largest restaurant network serving customers in over 120 countriesAs of 2018, McDonald’s operates the second-largest restaurant network in the world. In total, the company and its franchisees operate 37,241 restaurants in 120 countries.Figure 1. Largest quick service restaurant (QSR) chains by number of locations in 2018RankBrand NameLocations1Subway43,7722McDonalds37,2413Starbucks27,3394KFC21,487In terms of sales, McDonald’s outrivals any other QSR chain in the world with US$22.820 billion in sales in 2017 alone (earning slightly more than Starbucks). The sheer size of the company’s restaurant network is a strength that provides many advantages over competitors, including:Economies of scale. The company can share its fixed costs over many restaurants locations, which makes McDonald’s one of the cheapest places to eat at.Huge gains from implementing best practices. The company can identify better ways of performing tasks, managing restaurants or hiring new employees and can achieve huge gains by implementing these best practices in its vast network of restaurants.Market power over suppliers and competitors. Due to its size, McDonald’s can exercise its market power over suppliers by requiring lower prices from them. The company clearly demonstrates this with The Coca Cola Company. Because of McDonald’s and The Coca Cola Company’s agreement, no other restaurant chain can sell Coca Cola drinks for lower prices than McDonald’s, even if it means losing the business to PepsiCo. The Coca Cola Company could easily get out of such agreement if McDonald’s wouldn’t be so huge and would generate less income for The Coca Cola Company. McDonald’s can also use its size to affect the competition by underpricing some of its items or driving them out of the best locations.Wide audience reach. McDonald’s restaurant network allows the chain to reach more customers than most of its rivals could reach. According to the Company’s CEO[6], in five of its largest markets, 75% of population lives within 3 miles of McDonald’s restaurants. Wide audience reach does not only help the company to target more customers and increase brand awareness, but also to introduce new services, such as home delivery.2. The most recognizable brand in restaurant industrySince McDonald’s opened its first restaurant in 1940, it has become the world’s largest restaurant chain in terms of revenue with the most recognizable brand in the market. According to Forbes and Interbrand, McDonald’s brand is 9th and 12th most valuable brand in the world, worth US$40.3 billion and US$41.533 billion, respectively. Usually, the more valuable a brand is the better it is recognized worldwide. McDonald’s, which operates in 120 countries, where billions of people live, enjoys some of the greatest brand awareness among all global corporations. Brand awareness also helps to introduce new products or sell the current ones faster as the company needs to spend less money on advertising.
2.3 Key players in McDonald’s chain:Bart’s, Target, and McDonald’s. McDonald’s has been able increase its growth through these key brands, offering a more attractive product line, enhanced customer experience, and more efficient pricing. While many of these key players also have strong brand awareness of McDonald, McDonald’s is only the third largest chain in the world with more customers in each jurisdiction. McDonald’s also has another key market in Europe and the US, one that allows McDonald s and Apple to compete in these three markets. Additionally, McDonald s is also widely recognized in the United States with its well-known ’boutique’, which means it’s a bit different from a rival. If McDonald s can become bigger and better, it could help the brand’s success in these areas. While McDonald s has also seen its brand increase, it doesn’t always get better. For example, the second-largest chain in the world, Coca Cola, is facing a huge challenge, since they are both in the market to compete against a brand that competes with McDonald s. For the company, it seems that both brands are in a situation of constant tension and the companies are trying to negotiate. The first problem may mean McDonald s has to give up at some point. According to Forbes, the price of Coke and Pepsi, which have similar market share and popularity, can rise about 60% from current prices, leading to a dramatic cost increase that would cost McDonald  s in the future. According to Forbes, Pepsi s pricing has fallen to a price on the lowest income consumers, so that it is no longer considered
2.4 McDonalds is expected to be able to bring a healthy market share to its consumer experience through its McDonald s. When it comes to its focus on customer acquisition, McDonald s has managed to be competitive to McDonald s by selling more products in a less crowded marketplace. This led to a competitive environment, which allowed the company to bring in the product as well as the store partners which were already getting in. There are three important factors that must be considered when deciding whether a McDonald s product can be considered competitive with a McDonald s brand, namely, its brand awareness, the number of active customers, and product sales. To ensure that McDonald s are able to reach its target consumer goal and are not short of a competitive product line, McDonald s has a number of initiatives to reduce costs, improve product quality, and bring in creative new product ideas such as new styles. A more important aspect of this strategy was McDonald’s marketing and strategic direction, which involves promoting, advertising, and investing in new brand initiatives. It’s also created two additional products: Ketchup and Mango Curry. Both of these are relatively simple, yet cost-effective and could produce revenue and sales. In order to capitalize on these new initiatives, McDonald s is developing various new McDonald s products. To address both of the above factors, as of now McDonald s is one of the largest non-financial financial players in McDonald s, and may very well be the largest consumer brand in the world.
3) McDonald-Pepsi Dining System. A key strategy for McDonald s is its McDonaldPepsi. McDonaldPepsi is McDonald s first food and beverage company which has been successfully expanding into other food and beverage markets. McDonaldPepsi has experienced significant growth as it is located in New York City with large food and beverage companies serving several major cities and developing new dining products to cater to the new consumers. According to Bloomberg, McDonaldPepsi has opened new restaurants such as McDonald’s in Manhattan and McDonald’s in Manhattan Heights. McDonaldPepsi also recently announced an investment in new restaurants in the New York metropolitan area. The partnership will be conducted with the American Apparel Company, an American Apparel marketing unit, as well as with M&P Brands, a franchisees group in the United Kingdom.
4) High-Quality Materials and Food. McDonald-Pepsi is known for its products, which are produced using highly efficient, environmentally friendly and environmentally sound processes. They currently have the highest cost per product category in the market, although other stores have seen significant benefits compared to McDonald’s (and other companies), with product efficiency and value added accounting for more than 70% of the purchasing market. McDonald s has been able to increase sales as a result of its innovative menu design which has changed from a simpler to a more efficient alternative