Mar 26, 2014 McDonald's 26 BCG Matrix: According to BCG Matrix McDonald‟s is a star. The reason for this is its high market growth and high market share in the Pakistani market. On the other hand KFC and Pizza Hut are the cash cows because of their low growth rate and high market share. 16448162 McDonalds Project - Free download as Word Doc (.doc /.docx), PDF File (.pdf), Text File (.txt) or read online for free.
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McDonald is an American chain of fast food restaurants. Initially it was a barbecue restaurant, founded in 1940 administered and managed by, Maurice McDonald and Richard. It reorganized its business as, fast food, in 1948. Later, McDonald chain of restaurant was bought by, franchise agent Ray crock, from Macdonald Brothers. Currently, Macdonald has 36,615 outlets in 119 countries and second largest employer in the world. When business model was reorganized as fast food chain, its chief products were, Burgers, Sandwiches, fries, wraps, milkshakes and desert. With passage of time, when needs of consumer were explored and identified MacDonald added some more products in to its menu. Salad, fruits, fish and smoothies were new items which were included into the menu.
In this article we will be discussing the detailed BCG analysis of Macdonald, which is the world largest fast food chain of restaurant and second largest employer in the world. Nonetheless, BCG matrix was specially designed for those companies, which have different segments, geographical, industrial or product lines. This framework helps the managers to formulate the right strategy for each segment according to its need. McDonald has the highest market share in fast food industry followed by, its core competitor Yum Brands, which owns KFC, Pizza hut and taco bell. BCG matrix is four dimensional framework each dimension states the competitive position of the company segments. McDonald divided its company operation in four geographical segments, America, Europe, APMEA (Asia Pacific, Middle East, Africa geographical region) and others.
Stars
According to BCG framework stars are those segments which compete and operate in high sales growth industry and have high market share. If the McDonald chain of restaurant is evaluated in terms of geographical segment its Europe segment will come into the category of stars. In 2015 and 2016 Europe segment has generated the highest revenue for the corporation. Such segment requires market development and market penetration strategy to evolve the segment into cash cow for long run financial sustainability.
Cash Cow
Cash cows are those segments which provide financial stability in the organization. Such segments compete in low sales growth industry and have high market share. McDonald America segment reported 31% share of revenue, in corporation annual sales. However, McDonald America segment can be included in the cash cows category. As far as fast food industry is concerned in America, competition is very tough, customers have many substitute restaurant to replace, one with other and the food industry is stiff due to competition and high frequency of new entrants. McDonald should include more products in to its menu, target more segments and identify their needs of fine cuisine and satisfy them accordingly.
Question Mark
APMEA segment of McDonald fall into the category of Question mark. Such segment compete in high growth industry and have low market share. In Asian pacific countries, industry sales growing potential is very high but unfortunately McDonald is not taking advantage of this opportunity as; its competitor yum brands. Yum brands has been establishing new franchise each day on average in mentioned region however, McDonald has not been responding to the competitor strategy very well. McDonald APMEA segment should formulate, market development and product development strategy. McDonald should establish more franchises and introduced new products according to the needs of customers to turn this segment in to star. Yum brands have competitive advantage over McDonald in this segment.
Bcg Matrix Example
Dogs
Fortunately none of McDonald segment fall in to the category of dogs. Dogs are those segments of company which are competing in low sales growth industry and have low market share. Such segments are not good for the financial health of company or corporations. Liquidation and retrenchment are the best suited strategies for dog segments.
References
MCDONALDS CORP SALES BY GEOGRAPHY
http://csimarket.com/stocks/segments_geo.php?code=MCD
McDonald’s Reports Third Quarter 2016 Results. Retrieved from.
http://news.mcdonalds.com/Corporate/news-stories/2016/McDonald-s-Reports-Third-Quarter-2016-Results
Mcdonald's Bcg Matrix Login
McDonald’s Unveils New Global Growth Plan. Retrieved from.
http://news.mcdonalds.com/Corporate/Press-Releases/Financial-Release?xmlreleaseid=123085
An iconic brand moving towards future. Retrieved from.
http://corporate.mcdonalds.com/mcd/our_company.html