When people think of fast food, they often immediately think of McDonald’s. This well-known food business is a leader in the fast-food industry, and for good reason.
With food options ranging from chicken nuggets to burgers, ice cream, to iced coffee, most people can find something to appeal to their taste buds and wallets at McDonald’s.
However, as popular and well-known as McDonald’s is, success did not happen automatically or overnight.
McDonald’s 9 Competitive Advantages
Here is a look at nine factors that have contributed to the ever-increasing success and popularity of this enduring fast-food chain.
1. Robust Advertising Campaigns
Mcdonald’s uses a rigorous system of advertising on which they spend billions of dollars. But despite the high expense, this strategy has paid off quite nicely for the company.
For McDonald’s, advertising is more than just TV or radio ads which is what probably most people think of when they hear the word advertising. In addition to those more traditional marketing avenues, symbols (or icons) are a huge part of their advertising success.
For example, it is safe to say that a majority of people in the USA, not to mention in the world, are familiar with the icons created by the McDonald’s company. These icons include the ever-popular clown persona of Ronald McDonald.
Another McDonald “icon” is the golden arches. People the world over know that a glimpse of those ubiquitous curved yellow signs means cheeseburgers and fries are just ahead. Ray Kroc and his team were smart to come up with these and more simple icons that represent their brand.
As noted previously, McDonald’s spends billions on advertising. Targeted campaigns seek to reach specific demographics. Most notably, children are targeted.
McDonald’s says they want a “friendly, fun environment for everyone… to enjoy. This means appealing to families who love our iconic Happy Meal, to workers grabbing breakfast on-the-go or eating in”.
While some are understandably concerned by this focus on young people, on the other hand, millions of families have enjoyed a happy meal and an ice cream cone thanks to this fast-food giant.
Other popular forms of advertising that McDonald’s employs include TV ads, billboards, radio ads, and digital marketing. All of these have been hugely successful for the company.
It is safe to say a majority of Americans have seen or heard a McDonald’s advertisement many times. And many people can quote slogans from popular McDonald’s ads that are part of pop culture,
2. Thoughtful Franchise Model
As McDonald’s continued to grow throughout the mid-1900s and beyond, franchising opportunities began to abound, and today, 93% of McDonald’s restaurants are franchised.
Ray Kroc figured out ways to make franchising successful, and he was a major player in streamlining the process. A key word to the success of the franchise business model is uniformity.
All franchise owners receive excellent training at Hamburger University, which is where franchise owners are given the tools they need for their business. A close friend of Ray Kroc came up with this concept.
A philosophy of cooperation and a helping hand pervades the franchise model. It has been remarkably successful.
Franchise owners lease the property from McDonald’s, which creates a revenue stream from the rent and royalty incomes from the franchisees.
A major reason for the success of the franchise model was the enthusiasm and vision of Ray Kroc. He emphasized three things that were vital to a franchise’s success:
His slogan, “In business for yourself, but not by yourself,” puts into words the philosophy behind this business model.
3. Creative Solutions to Problems
The ability to adapt and innovate has been a major reason for the competitive advantage that McDonald’s has long enjoyed. While maintaining consistency, McDonald’s has also changed as needed.
For instance, the drive-thru was not original to the early McDonald’s. The drive-thru actually came about because of a military base policy.
Soldiers who were in uniform were not allowed to leave their vehicles and, therefore, could not enter a McDonald’s restaurant.
So in 1975, the first McDonald’s drive-thru opened near a military base in Arizona. This is a prime example of the creativity that allows this company to continue to change and thrive.
While continuing the tradition of good burgers and fries, McDonald’s has also added many menu items over the years.
Some have been failures, such as the Mcpizza or Mclobster. But many more have become favorites, like the breakfast menu items, Fillet-O-Fish, and many more selections.
Along with new menu items, the company has adapted to changing technology as needed. Self-ordering kiosks and mobile ordering are just two examples of how McDonald’s implements technology on a regular basis now with good results.
In addition, as people have grown more health-conscious, McDonald’s has made an effort to offer some healthier menu options. They got rid of the supersize options for the same reasons. Also, seasonal and regional menu options are offered.
4. Consistent Quality
McDonald’s is known for consistency and quality when it comes to its products.
When a person orders at McDonald’s, they have come to expect consistent, quality food. This ties back to the idea of uniformity. All menu items are held to a high standard.
Not only are the food products consistent in quality, but the training is consistent in quality as well. McDonalds uses a four-step training process: Prepare, Present, try out, and follow up.
The training generally takes place over the course of several shifts, and crew members are well-prepared after this training.
Overall, McDonald’s is committed to preparing food that is consistent in quality, preparing team members who are well-trained, and giving customers a pleasant experience.
This commitment to quality has been one of the key reasons for their success over the decades. Quality and consistency are key components of McDonald’s strategy that has served them well.
5. Innovative supply system
McDonald’s uses an innovative supply system. It relies on some key strategies that have helped make it a success long term.
First of all, many of the same relationships that Ray Kroc cultivated with suppliers are still in use today.
These long-term relationships have served the company well. One example of a long-term supplier is the Martin-Brower company which has delivered paper napkins to McDonald’s since the 1950s.
Secondly, McDonald’s has been willing to innovate by seeking out more organic and sustainable food sources, as noted earlier. It made a major decision to switch to free beef patties for the quarter pounders a few years ago, which has been a positive change.
A third strategy that McDonald’s employs in its supply chain is what’s known as vertical integration.
Essentially, this means that McDonald’s controls more stages of the supply process. They grow their own potatoes, for instance, among other things. By keeping the supply system in-house, they can control quality as well as keep costs down.
These key strategies have helped to keep McDonald’s successful. See this article for more information about the beef supply that McDonald’s uses.
McDonald’s is very committed to keeping their restaurants clean. Workers are trained to work tirelessly to keep a clean environment for all guests. This is one of the hallmarks of McDonald’s success.
The McDonald’s website indicates that each restaurant uses a daily, weekly, and monthly list of cleaning tasks.
As with any restaurant business, there is always room for improvement, but in general, McDonald’s prides itself on keeping a clean environment for its workers and guests.
Giving customers good products for low costs is another important aspect of McDonald’s success story. When customers visit McDonald’s, they can expect to choose from a wide selection of low-priced and filling food options.
From Happy Meals to Big Macs, items on the $1 menu to milkshakes, all menu items are affordable, and most people would agree the food is tasty.
From the very beginning, value has been a hallmark of McDonald’s success.
8. Good Customer Service and Community Outreach
Along with the value of the items sold, McDonald’s strives to train their staff to be courteous and helpful. Ray Kroc’s motto was “Quality, Service, Cleanliness, and Value.” Good customer service has been important from the beginning.
Not only that, but community outreach is very important to the philosophy of McDonald’s. One very good example is the Ronald McDonald Houses.
The Ronald McDonald houses allow parents of hospitalized children to stay close by while their child or children are in the hospital. This has been a highly impactful service to countless parents and children.
McDonald’s gives generously to the Ronald McDonald Houses. Along with monetary giving, many franchise owners and crew members volunteer their time and services.
In addition, in McDonald’s restaurants, boxes for donations to the Ronald McDonald Houses are commonly seen. These donation boxes are the largest source of fundraising for Ronald McDonald houses.
With an eye toward great customer service and community service, McDonald’s continues to be a leader in communities worldwide.
9. The Art Of Cross-Selling
Cross-selling may seem like a simple thing, but it has yielded great results and should not be taken lightly. Many businesses employ this strategy with positive results.
“Would you like fries with that?” Everyone has heard this question or similar ones at McDonald’s.
This is part of their strategy that has helped them maintain their status at the top of the food chain (no pun intended). When customers order, employees are encouraged to try to cross-sell other items that might go along with the order.
By encouraging customers to add additional items to their orders, McDonald’s has been able to make millions more in sales. The goal is not to be pushy but to promote additional purchases that a customer may genuinely be interested in.