McDonald's Business Straegy

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McDonald's has established a business strategy that is not unlike other fast food chains.

Cutting costs, adjusting prices, and improving restaurant operations are the three pillars of a strategy

adopted by COO Ralph Alvarez (Adamy, 2009). Replacing older gas guzzling company vehicles with

more fuel efficient models is one way the company is cutting costs. Improving drive through process

efficiency is another way of reducing costs. When processes become more efficient, employees become

more productive and able to serve more customers. While this strategy is effective in many regions of

the globe, some weaknesses in sales, such as in Eastern European, German, and Chinese markets, must

be balanced by increased revenues in other regions, like Japan, Australia, and the UK. Roughly two

thirds of McDonald's revenues are generated from overseas markets (Adamy, 2009).

Though much of the organization's revenues come from overseas markets, McDonald's must

still maintain a competitive edge in U.S. markets. Though pricing strategy is often tied to marketing

efforts, McDonald's uses customer demand to determine which products should be reduced or

increased in price. High demand products or menu items can be reduced in price, due to larger

quantities of sales. However, the organization relies heavily on automated ordering systems, which

also track sales, to adjust prices in specific markets. Offering products customized to cultural

expectations, such as high end coffee drinks in U.S. markets, ...