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

McDonalds Business Strategy - Essay ExampleBy 1968, the drawing string comprised 1,000 units, which rose to 5,000 units by 1978. By 2001, the federation operated around 30,000 units worldwide. Whilst keeping menus limited, McDonalds diversified its range from its original hamburgers and cheeseburgers. In 1964, the company launched its Filet-o-Fish sandwich, followed by signature burger the Big mac in 1968, Happy Meals in 1979 and Chicken 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 mark 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 axiom McDonalds liberation its focus, as burger fast food, especially in the US, seemed dangerously crowded and mature. Consequently, McDonalds focused on diversification, introducing new menu items and aiming to attract a more than adult demographic, while retaining its core consumer base of children. 2000 saw the introduction of salads, low-fat desserts and a wider choice of chicken and fish burgers. 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 away from its traditional single-brand focus. In 1998, McDonalds purchased London-based coffee chain Aroma and in 1999 and 2000 McDonalds purchased US bonds Donatos Pizzeria with an emphasis on home-cooked repast 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 away fr om 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 made 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 reefer venture with Fazolis, a fast casual 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 good company at a later date. The company also opened its first multibranded unit, offering Boston Market, Donatos and McDonalds. However, these acquisitions did not prove wholly successful. In 2002, the company experienced a difficult year, culminating i n its first ever quarterly loss. This poor performance was partly due to weak economies in Latin the States 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