McDonald & Burger King’ rivalries in advertising

A savage advertising war 

This war is dated from 27 year ago a,d already the two giants of the Fast Food industry didn’t show any mercy to one another.  Both giants from the fast food industry fight for years to attract a maximum of customers in theirs restaurants. And advertising is one of their favorite play ground to challenge themselves and tool to drive traffic to their restaurants. We will look here divers campaigns that both brands made and which had a certain impact on the audience or not. Besides we will focus and highlight on the work that they made in the American and French markets.

This commercial, here bellow, from Burger King clearly is an aggressive example of what both firms fight. Actually, this television ad was on the screens in 1986 of all Americans.

This second commercial which was realized in 2002 on the German market, is a ad from Burger King show us the famous icon of the GoldenArches buying secretly a burger at his competitor restaurant.

In their recent advertising campaign, the number two in the fast food industry have been incorporated famous personages and celebrities in their commercials  in there re-branding strategies in order to promote their new  healthily menus including salads and smoothies. So, the corporation broadcast a series of quirky commercials featuring well known people. And  the message was that if you want to be as sexy as those celebrities; you can eat healthier even in Burger King. In fact,  eating fruits and vegetables is none only possible in a fast food but they should take example to them. With the gimmick « Come on and get it !». We can notices here that the company did not use their mascot but common people. Just like their main competitor, Burger King is not longer the one in the middle of the attention but the client.

Actresses such as Salma Hayek, footballer like David Beckham, the singer Mary J. Blige and so on had signed for the the titans of burgers. If you want to have a clear idea of what  they did you can just check out and click here bellow to ones of those videos.

As regards McDonalds in France, we can first underline the change of color of the logo. Indeed, the brand switch from a red background to a green one. This change of color symbolize the re-branding strategy that the company had taken. In fact, McDonald express this way that he is concern about sustainability. Besides, the corporation has a Youtube channel that is full of videos that explain how the brand is involve in different sustainable programs such as fair-trade.  Another way for the brand to promote their work and efforts. But also to show to their customers that they are also concerns about serious issues that the world have to face. Furthermore, the brand position themselves as an actor of diversity. From their ads for young people looking to learn how to become a manager and expand their job opportunities. To the recent advertising campaign: « Venez comme vows êtes » which promoted diversity with a fun touch.

The following McDonald’s commercial dated from 2012 and was aim for the French market. This famous advertising campaign was named « Venez comme vows êtes » – «  Come as you are » was one of the most interesting video campaign that the brand lately since the corporation here place the customers on the center of all attention. Plus, we can see how going to one of the brand’s restaurant is a festive experience among all people from different range of age.  Therefore, this campaign came out during a strategic  period since the all country was absorb with a very debate subject: the question about gay marriage. So in a very subtle way McDonald answer to the question. Anyone is welcome to there restaurant and they don’t have to feel ashamed, they will always be warmly welcome and serve. A great story that was made to attract but also engage customers.

Besides, this type of campaign are powerful weapons which help to fight back bad publicity about the fast food chain. Since the fast food industry is in the hearth of painful battle which point their business practices. The popular films, Super size me is one of this bad publicity that paint McDonald in a poor even ugly  light.

Here bellow you will be able to have a look to the McDonald’s commercial for the French Canadian market in 2011. The campaign was called « Souvenirs d’enfance » meaning « Childhood memories » and had have to trigger emotions and memories from childhood. But also to reminds us that McDonald have been in our lives for years now and it will still. Moreover, trough such commercial the brand redefine their archetype as a friend who always been present during the evolution of their customers lives at divers stage.

Plus, both ads we can clearly read the brand mantra and their aim to be involve in their customers existence. Even though, the golden arches adapts their advertising campaigns according to the country that aim, we can underline the fact that the brand tend to promote an experience instead of their products. A strategic direction which has the purpose to bring emotions. Thereby, they put their clients in the center of the attention by telling them that they made the brand.  Customers are almost the heroes of the brand’s story.

In term of advertising, we can ignore the risky path that Burger King had took few years ago the United States. In fact, the brand used quirky images under the seduction archetype to promote theirs product. More edgy and sexually oriented this marketing strategy was not the most successful.  Here are some examples of what the brand did. Obviously it is impossible to ignore such campaign even though the advertising campaign was judge inappropriate and was he subject of many debates.  And was a failure for the corporation, theses prints make people react and actually talk about the brand.

More recently actually this year,  the corporation organize a viral campaign which have the goal to make people think that the brand had change their name. In fact, a large campaign which have the purpose to introduce to the public eyes the new low fat french fries. A new product which confirm the brand aim to create wealthier menus.  Fries King was the name the corporation used to trick everyone. In addition, this new product can bee seen too as product which will fight back the success of McDonald’s french fries. Unfortunately, the campaign went viral but was not really appreciate by customers as we can see here bellow.

The issue of this failure is also that the brand took a hashtag that already stand for something else. An commonly use expression. We can conclude here that despite Burger King’s risky actions they succeed somehow to make people talk about the brand. Positively or not but at least they gain interest from customers. Can we say here the common expression which say that there is not bad publicity?  Well, the brand definitely always bring content that catch people attention but they should be more careful because those type of gaffe can simply just annoyed in the long run.

 

 

 

In the other hand, McDonald still spend a lot on advertising. In fact, they create creative content which play with various emotions. But also show that the brand is almost a distant member of their family just like a friend. While Burger King is more daring. Indeed, the fast food corporation act on making their customers laugh or shock them.

Marvy Lungyeki

Sources:

http://www.forbes.com/sites/caroltice/2013/09/26/what-burger-king-got-wrong-with-low-fat-french-fry/

http://business.time.com/2013/10/02/the-web-hates-burger-kings-fake-name-change/

4Ps: McDonald VS Burger King

McDonald

Author: Maya Al Chaarani

Editor: Sandra ESSAFI

Burger King

Product

 As a fast food chain, Burger King produces, hamburgers, cheeseburgers as well as Fries, Salads, Hash browns, Onion rings, Coffee, Juice, Shakes, cookies and pies.

Burger King sets itself apart from competition with its “have it your way” theme which allows individualize each orders with many options including fries or onion rings, cheese, bacon, mustard, ketchup, mayonnaise, lettuce, tomato, pickles, and onion.

The nation’s No. 2 burger chain will add Starbucks Corp.’s Seattle’s Best Coffee to all its U.S. restaurants in a phased roll-out that begins in the summer of 2010. Under the effort, more than 7,000 Burger King Restaurants will begin selling the coffee along with iced varieties that also come with a choice of plain, vanilla or mocha flavors and whipped toppings.

Burger King has signed a licensing deal with ConAgra Foods Lamb Weston which will result in offering a retail line of microwaveable Burger King Brand French fries at select retailers in the United States, including Wal-Mart.

At the same time, Burger King has plenty of healthy choices like Wraps, Garden Salad, Fresh Apple Slides.

Recently, the brand also introduce Satisfries, a new great tasting crinkle-out french fries with 40% less fat and 30% fewer calories. They held a contest on Instagram to promote the new product.

Price

Burger King recently joined McDonalds in offering value menus like the $1 double cheese burger or the $1.29 Whopper Jr., 50¢ Cones, $1 Frozen Lemonades and the “Mix and Match” 2 for $5 deal which is suitable with the increase of the demand for cheaper meals due to the economical environment.

The fast-food restaurant vowed to maintain the balance between value and premium products, but more budget-friendly offers can be expected.

The company also will continue to sell its new premium burger, the Steakhouse XT, for $3. Indeed, the company has focused on its “Penny pincher” value menu and “Stunner deals” discounts.

Place

Burger King operates its business through franchises, under a franchise arrangement, the franchisees invest in the equipment, signage, seating and decor, while the company owns or leases the land and building. The company generates revenues from three sources: sales at company restaurants, royalties and franchise fees and property income from those franchises that lease or sub lease property from the company.

At the end of September 2012, Burger King reported it had 12,667 restaurants in 73 countries which 66 percent are in the United States, others are established in international locations such as Africa, Asia and the Middle East.

In Europe, Burger King usually locate near traveling points such as train stations and airports. The up-coming restaurant in Paris will be located near the station Saint-Lazare. On the other hand, in Asia, the brand has another strategy to put its restaurants in shopping centers and concept stores.

Promotion

Burger Kings Big Value Menu $1 “Talent Show” invites customers to display their talent via videos they submit with the goal of winning a menu item. The firm applies a promotional strategy which involves the consumer which can reinforce and raise the number of the fan club.

Burger King is always looking for ways to offer affordable menus and items for their customers. Moreover, the company uses heavily the social medias networks in order to encourage the customers to win gift which maintain the activities of the fan community.

The company had program also another advertising campaign named “The next best move” in 2010 to feature scheduled promotional tours with stops in urban communities around the united state. A costly basketball event targeting young African American males. They used basketball as a cultural entry point because it’s such a part of the urban framework of these consumers that go to Burger King. The effort is augmented by a special website where participants can describe community service contributions a digital tactic which helps collect data. These informations will probably be use in order to sharp and improve the knowledge of the target. A promotional action which targeted a specific target segment with the goal to shows the fast food links with the urban music industry and gather a larger community.

You will find here bellow, the videos of both campaigns:

The company continues to respond to consumers seeking affordable meals with value promotions like the six-month launch of the $1 double cheeseburger. Burger King also launched a line of holiday greeting cards that gave the recipient a dollar bill to be used to purchase the cheeseburger. Plus, Burger King backed the launch of the Tendercrisp premium Chicken burger, with a promotion theme encouraging consumers to “cheat on beef”’, an offer which aim to raise the sales volume. But, it is also a good tool  to push the sales of new product. Moreover, these kind of actions can generate word-of-mouth, an informal way of communication which can measure the success of a campaign and drive more attendance in the restaurants.

Author: Bingying Zhang

Editor: Viriginie Mialon
Editor: Marvy Lungyeki

Targets

Author: Sandra Essafi
Editor: Maya Al Chaarani

Burger King’s targets

 -Young children: Burger King wants to attract children by offering complimentary toys with different menus. Burger king offers four different menus adapted for children from different ages and with different taste. (For example menus that include burger or 4 or 6 nuggets). By attracting children, Burger Kind also attract the parents that want to spend some quality time with their children and make them happy.

 -Students: Students usually eat with their friends during the break and look for fast food restaurant due to the small amount of time they get. They tend to look for facility to respond to their basic eating and drinking needs. Students prefer cheap food but want to have different alternative so Burger King targets these groups of people by offering several menus for similar prices. This type of consumer does not have a specific time to eat so Burger King is open the whole day. It fits to their life style and correspond to the general social trends touching this target.

 -Working people: This target includes Burger King’s main target, 18-35 year old men that like burger King for the big size and quality of its burgers. Burger King also targets working people with different preoccupations such as time, quality and quantity. This people do not have time to think about new places so they develop habits and go to restaurant where they will find the same standards. A large part of people from this category looks for take away food in order to eat at their work place. They reserve a small amount of time for eating and are usually alone so burger King offers delivery in certain countries such as the US. This group is mainly composed of male but burger King also target working female via healthier food such as salads and fruits.

 -Lower and middle class families: Families with low revenues look for tasty food at a low price in order to spend quality time with their children. Burger King has though about this families by offering very cheap meals and toys for children. The parents can eat and find entertainment for affordable price.

 -Burger Fans: Some people are passionate about burgers and they represent one of the most exigent targets for Burger King. They are specialized and can easily compare quality, quantity and flavor of different burgers from fast food chains.

Author: Viriginie Mialon

Editor: Marvy Lungyeki
Editor: Bingying Zhang

SWOT Analysis

 

McDonald SWOT Analysis

A. Strengths 

• McDonalds has strong global presence and is considered as a market leader in both the domestic as well as the international markets, it is known as one of the world’s most recognized logos, which has built up huge brand equity.
• A global brand that owns 34,000 restaurants serving in 119 countries. Of these 34,000 restaurants at least 14,000 restaurants are situated in the US. It is the No. 1 fast-food company by sales. 5.6% sales growth located itself in major airports, cities, highways, tourist locations, theme parks. Large amounts of investment have gone into supporting its franchise network, 75% of stores are franchises.
• It uses economies of scale for reducing the cost, as its huge expansion diversifies the overall risk involved with the economic performance. It also adapts to the cultural differences regarding the region where the restaurant is set up.
• They own an active children’s charity by the name ‘The Ronald McDonald House’. It has branded menu items such as Big Mac, Chicken Mc Nuggets, which further promote McDonalds
• It takes steps in adjusting the ingredients and product offerings in order to comply with the upgraded health standards so it is recognized as a socially responsible and community oriented firm. It takes food safety extremely cautiously It was the first to provide the customers about nutrition facts.
• It has an efficient food preparation style that follows the process in a systematic way, it has loyal staff and strong management team, good innovation and product development. It continually innovates to retain customers in the business with a variety of choices

B. Weaknesses 

• It uses advertising that mostly targets children, which is a vulnerable and sensitive target
• There is a high employee turn-over.
• It has not yet accomplish going on the trend of organic food. Core product line out of line with the trend towards healthier lifestyles for adults and children. Product line heavily focused towards hot food and burgers.
• Price competition with the competitors results in low revenue.
• There is a lack of disruptive innovative products.
• Few of the products are seasonal (salad, ice-cream)
• There is a rise of quality issues across the franchise network.

C. Opportunities 

• It can adapt to the needs of the societies and undergo an innovative product line by optional items. It can create new product offerings, use mobile text messaging to offer services that appeal to consumers. McDonald’s also responds to social changes – by innovation within healthier lifestyle foods for example it moves into hot baguettes and healthier snacks (fruits) have supported its new positioning. The new “formats”, McCafé, having Wifi internet links should help in attracting segments, also installing children’s play-parks and focusing on educating consumers about health, fitness
• It may continue focus on corporate social responsibility, reducing the impact on the environment and community linkages by researching ways to use ‘green’ energy and packaging which will work as a part of their promotional effort as well as fulfill their social responsibility.
• It can upscale some of its restaurant settings at luxurious locations to attract more customers.
• It can slow down the level of expansion in order to increase the profitability of the organization.
• It may increase joint ventures with retailers (e.g. supermarkets) and offer better locations for franchisees.
• Use of CRM, database marketing should be used to more accurately market to its consumer target groups. It could identify likely customers (based on modeling and profiles of shoppers) and prevent brand switching. Strengthen its value proposition and offering to encourage customers who visit coffee shops into McDonalds.
• It can implement deeper international expansion into emerging markets of Asia

D. Threats 

• Foreign currency fluctuations are regarded to be a major problem as it uses standard pricing for its food items. Recession or turn down in economy may affect the retailer sales, as household budgets tighten reducing spend and number of visitors. The recession also negatively impacts the holding position of the firm regarding its revenue streams, even though they are quite diversified.
• Social changes in consumer groups are encouraging balanced meals, 5 fruits and vegetables per day? “Mangez, Bougez!”.
• Emergence of major fast food competitors: Burger King, Starbucks, Wendy’s, Taco Bell, KFC. There are competitive pressures as new entrants are offering value and greater product ranges and healthier lifestyles products. E.g. subway, supermarkets, M&S.
• Pressure of environmental and health issues regarding the fast food chain, McDonald’s was sued various times for unhealthy food, usually addictive. Consumers now focus on nutrition and healthier lifestyles.
• Heavy investments on promotional campaigns which decrease the gaining of market share.
• Some parents criticize the firm for maintaining marketing strategy that focuses on kids, who later on take it as a trend to their adulthood.
• The expansion has made the firm vulnerable to the slow economies of the other countries as more restaurants give a rise to increasing their food offering and declining the price

Author: Maya Al Chaarani

Editor: Sandra ESSAFI

Burger King SWOT Analysis

A. Strengths

• Global brand name: Burger King is a globally recognized fast food brand thanks to the famous hamburger ‘whopper’ and it’s slogan “have it your way”. The grand has a high brand awareness in the fast food industry according to QSR magazine right behind McDonald’s and KFC.

• Franchises diversification: At the end of September 2012, Burger King reported it had 12,667 restaurants in 73 countries which 66 percent are in the United States, others are established in international locations such as Africa, Asia and the Middle East. While the majority of franchises are smaller operations, several have grown into major corporations in their own right. The brand also ranked the 5th in Top 100 Global Franchises rankings.

• Established market share: Burger King is second only to McDonalds and holds a 15% share of the United States among fast food restaurant chains. The company’s profitability has also increased in recent years.
• Growth plan: The company is able to grow while minimizing large capital expenditure, meanwhile it collects fees and royalties from each franchise.

B. Weaknesses

• Heavily concentrated in the United States: Although the company operates in many international venues, the majority of restaurants are in the United States. This concentration of operations in one geographic area company’s exposure to local factors.
• Relies on franchises: The company doesn’t have enough corporately owned stores which means it relies heavily on franchises to excite its promise.
• High calorie food: It’s always an issue that fast food with high fat and high calorie is not good for health conscious people. And there is some indication that Burger King may have been slow to transition to leaner and healthier restaurant to please its long term customers who are fans of the big sandwiches.
• Burger King dose not advertise their products like their competitors.

C. Opportunities

• Rethink the restaurant experience with new design which combine new technologies devises and redefine a clear mantra of the brand to strengthen the position of the brand into the audience mind
• Harmonize the company image and identity worldwide with a strict and unique segment for the restaurant decor and web site
• Possibility to connect their home delivery with an application and improve their clients database
• Involving the customers through digital game in order to raise loyalty (such as a “BK Nation or Lovers”) and implement a crow-funding strategy
• Increase co-branding with different partners for the condiments as for the desserts (ice-cream and cakes)
• Emphasis the new healthier menus like they do with the new “satisfies fries” and highlight the fact that contrary to their main competitors most of their items are more healthier
• They should put a focus on corporate social responsibility, by introducing clean energy and packaging to respond to the social change and  lifestyle. Underline and expand the BK McLamore Foundation worldwide
• Product improvement, tailoring it as per tastes of people around the world, in order to match with their slogan “Have it your way”
• Upgrade the varieties of children menus by making it more appealing (digital games or create co-branding with important brand in the  toys industry and video-games)
• Put forward  value menu featuring six items at less than $1
• Diversification of their services,  for instance with a coffee corner in the most profitable restaurants which will serve Seattle’s Best Coffee (a Starbuck’s brand)- “The King coffee” a possible way to compete with the “Mc Coffee”
• New opportunities in growing economies (India, China, Singapore, and Malaysia)
• Reduce cost of entry for Burger King franchise and under performing outlets

D.Threats

• Changing consumer eating habits towards healthier food alternatives. Campaign against obesity target directly fast food chain such as Burger King.
• Intense competition from other chains such as McDonald’s, Wendy, KFC but also little fast food restaurants targeting specific segments. (ex: delivered food, healthy fast food, fine dining fast food etc.)
• Local fast food restaurant chains.
• Increasing labour cost putting pressure on margins and is a threat to keep low price and quality expected by consumers.
• Slow recovering economy that has slow down Burger King international development.
• Saturated fast food markets in the developed economies
• Currency fluctuations

Author: Bingying Zhang

Editor: Viriginie Mialon
Editor: Marvy Lungyeki

Rivals around the world

McDonald: a worldwide fast food king

McDonald’s has thousands of competitors, each seeking a share of the market. McDonald’s recognizes that it is up against not only other large burger and chicken chains but also independently owned fish and chips shops and other eat-in or take-out establishments. Therefore, a company like McDonald’s has to develop competitive strategies to differentiate themselves from their rivals. Actually, any organizations need to be in touch with their business environment in order to make sure that what they do fits with customer expectations. Especially, that expectations change over time and countries. Indeed, even huge corporation like them have to watch their back in order to remain in the top of their game.  Moreover, the market segment in which McDonald’s operates is becoming increasingly competitive. But how this firm stills the number one in the global market scale? In this purpose we will look together how and why the American multinational remain on the top of his game in three crucial regions of the world.

First of all, if McDonald is the world’s largest chain of fast food restaurants is because the corporation serve around 68 million customers daily in 119 countries. But the secret of such success lies on a strong strategic competitive advantage that the company still building until now. Indeed, the impressive supply chain of the corporation is pretty well known. And it play  a key role since it permits them to offer the lowest meal. Furthermore, McDonald does not hesitate to go to new markets with an extremely clever distribution channel.

Nevertheless, in this crowded market place, McDonald’s lead came under pressure largely because many others fast foods have either copied the trail blazing idea that was previously set by McDonald. Besides, McDonald’s recognizes the need to respond and it is looking to increase the competitive gap by:

• adding greater value through innovation
• making the process of visiting a McDonald’s restaurant less routine and controlled
• enhancing the overall in house experience.
• leading on all the social medias platforms

In addition, the following quote from Mister Don Thompson, chief executive officer of MacDonald’s, illustrates the three important aspects of the company’s strategy in order to gain and keep their competitive advantage:

“While the informal eating out market remains challenging and economic uncertainty is pressuring consumer spending, we’re continuing to differentiate the McDonald’s experience by uniting consumer insights, innovation and execution.” said Thompson.

In fact, McDonald’s now offers late night breakfasts, a new Dollar Menu, and is advertising vegetarian value priced meals in markets like India to attract more customers. The company also said that a new line of quarter pounder hamburgers, including a bacon habanero ranch version, was selling well. It has rolled out an egg white version of its popular McMuffin breakfast sandwich and has gotten rid of slow movers such as Angus burgers and its Fruit & Walnut Salad. Furthermore, the American corporation had changes the restaurant interior design and made it more technological friendly and modern. But above all, what we have to underline here that McDonald focus on the customer’s needs and demands which help them to see theirs flaws and fix it right away. And even more upgrade their services and products. A strategic position which differentiates the multinational company from her rivals. But also give them the ability to dominate and to be a head of the industry.

Burger King: after years of struggling
This post is a business analysis on the two important public corporations: McDonalds and Burger King. Both of them are competing in the fast food industry. To add, the fast food industry is one of the largest food services sectors around the world and one of the most competitive industry. This sector focuses on the lower prices strategy in order to attract customers worldwide. McDonalds and Burger King, both compete with all types of food retailers on the basis of prices, convenience, food qualities and customer services.

Regarding Burger King, the majority of their  fast-food restaurants are locate internationally and  are privately owned franchises. Whereas the  majority of those franchisees are smaller operations, several have grown into major corporations in their own . At the end of the company’s fiscal quarter in September 2012, Burger King reported it had 12,667 outlets in 73 countries of these 66%  are in the United States and 95%  are privately owned and operated. The company locations employ more than 37,000 people who serve approximately 11.4 million customers daily.

Besides, Burger King is also redesigning it is restaurants, changing it is packaging, cleaning up it is cooking process and changing uniforms to reflect a more modern approach to food services. Finlay, these factors will contribute to a more desirable experience for customers. But Burger King does look rather old school and “out of touch” by not having the premium chicken wraps, salads and coffee drinks that have become the “most-have” in a fast food in 2012. Not having those items certainly has not helped in the battle to stay relevant. As far as improvement goes, Burger King’s core question should be: how to better present the value proposition? And how to better underscore what makes Burger King the ideal destination for fast food customers? In fact, there must be something McDonald’s and Wendy’s are not doing and something that can be tied back to Burger King’s specific promise to their customers. That would present a competitive advantage if introduced into the market. That is how Burger King will truly stand out.

A saturated domestic market…

It is unnecessary to talk about the supremacy of the brand with the golden arches in the North American market. However, smaller rivals such as Wendy’s, Burger King, KFC or Subway are upping their game with bacon sundaes and limited-time offers in North America. Wendy’s for instance is known for his square hamburgers and thick frosty shakes but recently introduced a pretzel bacon cheeseburger that appears to be chain’s best-selling new product in about ten years. And here we are only talking about the front runners of the competition. Indeed, Five Guys, Yum! and In-N-Out and others compose the second line of the pack.

Let’s not forget also that non-burger competition has also increased. Actually, in this category we can count Starbucks, Taco Bell, Dunkin Donuts, Pizza Hut and Domino’s Pizza. Further, we believe that Chipotle’s success in selling burritos may have reinvigorated the broader market for Mexican food. On the higher-end, McDonald’s has to compete with customers who are looking to healthier options at Panera, as well as the organic offering of Chipotle. Therefore, the brand fights back by offering more healthy menus and underline the quality of all their ingredients through advertising campaigns. And the uses of local suppliers. This growing competition and saturation on the market is a huge challenge for the number one of the fast-foods industry. The highly globalized segment of the world economy, markets where consumers have standardized preferences. Plus, the customers are driven with the curiosity to try news burgers recipes and concepts. Since, they exhaust all the golden arches menus so they look to new experiences or taste somewhere else. In addition, brands restaurants such as Taco Bell, Yum and KFC grew the same store sales: 7% and 4%, respectively, during the most recent quarter. Taco Bell is the only major competitor, in our view, to McDonald’s value proposition with premium items.

• The North America fast-food restaurants market

Moreover, the firm has to cope with a really negative image in terms of health but also business practices ( see post on advertising) . Indeed, despite is important share in the American market, McDonald is not so love and it is positions as a cheap comfort food. In addition, the 14,098 restaurants are more often visited by low income profile. Indeed, the leader of burger has a quite good position. Regardless, he still represent the symbol of bad nutrition and excess. Even though, is not always the truth as we can read on this counting calories illustration from the Wall Street Journal, here bellow.

This shows us that Mc Donald apparently is not the worst among his competitors. Indeed, the giant of the fast-food is just before one of his newest competitors in the United-State: Shake Shack.

As regards, Shake Shack was started as a hot dog cart in Madison Square Park. Only after the food truck grew in popularity, they developed the concept. And only after several years in Madison Square Park did Shake Shack open a second location. It is a local food concept which is well known to be the best place for fries and a future serious rival for McDonald. For instance, New York Times restaurant critic Pete Wells reviewed Shake Shack and claimed that “you can get better fries just about anywhere.” Shake Shack recently debuted non-frozen fries at it Upper East Side location. Its legacy can be seen not just in the rush of good, cheap burgers, but in the growing recognition that certain fine dining values, like caring service and premium ingredients. In their early days, Shake Shack’s committed to better ingredients, like antibiotic and hormone-free “100 percent all-natural” Angus beef. With a stronger promise of sustainability, made from beef that is local, organic or grass-fed. Regarding their expansion plan, Shake Shack never expands until “the right leadership is in place”. From there, the chain only wants to go to places that have a community interested in embracing it. Yet, the newbie in the industry is processing fast ant efficiently since the company already possess fourteen restaurants. This type of concept went viral and was largely spread  even out the United States. Indeed, this concept was adopt in France too and more precisely in Paris where such fast-food services took an important place on customers minds. In fact, “Le camion qui fume” for instance is the perfect example to illustrate the success of such concept in the city. Since, the food truck is today known to be one of the best places in the capital for having a delicious burger.

Formerly McDonald’s strongest competitor, Burger King has lost a lot of ground over the last decade in the American market. According to Advertising Age, McDonald’s was 101 percent ahead of Burger King in average domestic revenue per unit in 2010, more than double his lead from 10 years earlier.While McDonald’s is far ahead of the entire quick-service pack, at more than $34 billion, the chain’s domestic system-wide sales were triple it is closest competitor, Subway, in 2011 it is recent triumphs stand in sharp contrast to Burger King’s struggles.

A promising Asian market place and the European challenge.

China is the place where most fast-food chains, like so many industries, see big expansion. Mr Carucci  thinks that China will be “the biggest growth opportunity for the industry this century”. If so, then Yum!, which has the greatest presence in China of any Western fast-food company will be celebrating. Since, around 30% of the company’s profits come from China, and in the next five years is expected to grow to 40%. India also looks like a profitable opportunity. In addition, others plans to grow more business in Russia and elsewhere in Europe. Given that around 75% of fast-food companies’ revenue in Europe comes from people eating in the restaurants (compared with half in America), older European outlets are being done up to make them more attractive places. What’s worth to mention is that Taiwan’s fried chicken fast-food chain Dicos has vowed to open 450 new chains each year, to total 5,000 restaurants by 2020 on the Chinese mainland. The fast-food chain that was launched in 1996 and has around 2,000 restaurants in Chinese second and third-tier cities now aims to enter first-tier cities  including Beijing, Shanghai and Guangzhou according to the company’s top executive. This way, they moved the brand into direct competition with its Western rivals, such as McDonald’s Corp and Kentucky Fried Chicken Brands.

 

 

In Japan, for instance, McDonald’s and Burger King are facing strong competition from Mos Burger, in China by Kentucky Fried Kitchen (KFC), Pizza Hut, and local start-ups. Even in the small Greek market, McDonald’s is no match for local upstart Goody’s. While McDonald’s major competitor in the United Kingdom is Burger King, whereas in France is competitors are Quick, KFC and Subway.

Obviously,the golden arches’s corporation is facing a tough competition on every front and it is possible to see their sales weaker. However, in Europe and Asia we would not be surprised to see customers return to McDonald’s after trying all of the new offerings since many customers built an emotional connections with the brand. Plus, it is also a question if habits.  Moreover, Bill Smead, a manager at the Smead Value Fund in Seattle, who holds shares in McDonald’s corporation is betting that the iconic chain will profit from the fact that it is an “emotional and legal addiction.”

“The company is in a normal down cycle. It benefited from the global recession that forced cash-strapped diners to trade down to McDonald’s. It also got a big bump from profit-boosting new drinks like lattes and smoothies“  Smead said.

Source: http://foodbeast.com/2013/08/07/why-some-countries-dont-have-mcdonalds-from-iceland-to-bolivia/

Author: Marvy Lungyeki

Editor: Bingying Zhang

Source

http://www.writework.com/essay/mcdonald-s-competitor-analysis

http://businesscasestudies.co.uk/mcdonalds-restaurants/staying-ahead-in-a-competitive-environment/consumer-trends.html#axzz2iOdn99Lt

http://financials.morningstar.com/competitors/industry-peer.action?t=MCD

http://www.wikinvest.com/stock/McDonald%27s_Corporation_%28NYSE:MCD%29

http://www.brandchannel.com/home/post/2012/07/18/mcdonalds-social-media-engagement-071812.aspx

http://www.economist.com/node/16380043

http://www.forbes.com/sites/panosmourdoukoutas/2013/07/22/mcdonalds-big-challenge-at-home-and-abroad/

http://seekingalpha.com/article/1005311-mcdonalds-falling-prey-to-competition

http://www.ibtimes.co.uk/articles/493686/20130723/retail-food-recession-europe-competition-sales.htm

http://www.businessweek.com/articles/2013-07-22/four-reasons-mcdonald-s-is-worried-about-the-near-future

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http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/24/whats-eating-mcdonalds-its-core-demographic-can-barely-afford-to-eat-there/

Porter analysis: McDonald VS Burger King

• Threat of substitute product: LOW
McDonalds: even if competitors sell the same type of products it won’t be a direct substitute. McDonalds has its own secret recipes and it is difficult to copy them.
Burger King has its own inimitable recipes:
– Meat: their burgers are cooked with a unique technic, the flame grilling that requires specific grills. This technic gives a strong bbq taste to the meat.
– Burger King decided to communicate about its French fries because they have a very distinguishable taste

• Bargaining power of customers: HIGH
McDonalds & Burger king has to be specialized in the product that they offer to their customers because there is no switch costs for them. They have to enhance specialized products in order to keep loyalty customers. In fact, nowadays people suffers from financial crisis and their purchasing power is decreasing so they pay more attention to their expansive and they will not hesitate to switch to another fast food if this one is cheaper. Furthermore, way of life is changing and people are more aware of what they eat and looking for healthy food.

• Bargaining power of suppliers: LOW
McDonalds: The company has a high power on its suppliers. It controls them as subsidiaries because for lot of them McDonalds remains their main client. Nevertheless some suppliers aren’t dependent of McDonalds like Coca Cola or Danone.
Burger King chooses its suppliers after evaluating lots of criteria like delivery, timeliness and financial conditions. Each supplier has to become an approved suppliers and to maintain its quality of services.

• Threat of new entrants: LOW
McDonalds & Burger King: The enter in the market of Fast Food is easily accessible thanks to low starter cost and the fact that the atmosphere and the products are easily reproducible. But the fast food market is saturated and new entrants have few chances to obtain so many customers as the already leader companies on this market even if they set up this type of service.

• Competitive rivalry among firms: HIGH
McDonalds & Burger King have a big among of competitors, being in competition of a fast food company is easy. These two companies have direct and indirect competitors.
Direct competitors: Multinational like KFC, Subway…
Indirect competitors: Pizza stores (PizzaHut, Dominos Pizza, Pizza Rabbit…) and proximity outlets (bakeries, snakes, kebab…).

• Public regulation :
McDonalds & Burger King: Some governments are campaigning against junk food. For example in France they put in place advertising for this purpose with headlines like « Manger, Bouger » «Pour votre santé mangez 5 fruits et légumes par jour».

Author: Virginie Mialon
Editors: Maya Al Chaarani &Sandra Essafi