McDonald’s restaurant originally started its fast-food business in San Bernardino, Californian, United State of America. The business was form by brothers, called Dick and Mac. These two brothers after they have successfully graduated from high school left their home town to California in search of white corner job. After long-term working experience in studios, they decided to come up with business ideal in fast-food. They open their first hamburger stand in 1937 in a place close to Santa the Anita racetrack. Due to the growth of the business they agreed on moving to rapidly growing business centre called San Bernardino and took a loan of about $5000. They employed highly talented carhops and produced menu of about 29 products. In 1947 the business started performing below their expectation. They find that customers were becoming more interested in hanging out rather than eating fast-food. They decided to close down in order  to look for the possible ways of making the company more viable. In December 1948, they laid out transformation strategy. In search of how the company could be turnaround, Dick discovered a hamburger patty producing machine capable of increasing their production capacity. The number of menu were reduced from 29 to 9.They purchased stainless steel pumps, a mixer, stainless steel grills and changed carhops to self – service window. The transformation was eventually supported by Ray Kroc who sold a multi-mixer machine to them.

This coursework planned to focus on the formulation of strategy at McDonald restaurant between 2001 to 2007. In the first phase of the work the strategic aims of the organisation will be identified, follow by analysis of the internal and external environment with the aid of generic strategy, value chain and five forces framework developed by porter(1980)(1985).



Every organisations need to identify their strategic aims to be able to have a direct focus of what and when to achieve it within a given time. This is usually based on the organisation’s limited resources and capabilities. As (Barney 1991), “stated an organisation could extend their limited resources and capabilities through organisational learning, sharing, generation of knowledge, redeployment of existing resources in an effective and efficient ways”.

The strategic aims of McDonald’s in 2001 to 2007 was ‘’plan to win’’ with its strategic focus of ‘’being better not just bigger’’. The company aimed to be the world’s best quick service restaurant experience. Being the best means providing superior quality, service, cleanliness and value that will make every customer in every restaurant smile. McDonald’s aim to focus on five key areas; people, product, place, price and promotion. The system alignments that surround the plan to win enable the company to focus on customer experience, cleanliness, quality as well as moving in to other countries. To be able to achieve these aims McDonald’s would have to continue to learn, share, innovate, develop and train its manpower, improve its franchise across the supply chain ,invest in technology  and leverage on its competitive advantages from brand name, product differentiation, customer loyalty etc.


“The generic strategies for achieving competitive advantage has gained prominence in the field of strategic management over the recent time” (BCG,1976;Buzzell,Gale & Sultan,1976;Porter,1980;Hambrick,1983;Wright,1987). Porter (1980) generic strategies of differentiation, cost leadership and focus have been recognised by many managers in both the profit and non-profit making organisations as an instrument for achieving strategic objectives in organisations. It is possible for organisations to reach optimal level through cost leadership strategy or differentiation strategy and or both. “Many researchers feel a combination of these strategies may offer a company the best chance to achieve a competitive advantage” (Cross, 1999; Karnani, 1984; Miller and Friesen, 1986; Hill, 1988). Any strategy an organisation pursue, should be capable of achieving the aims and objectives of the organisation in gaining competitive advantage over its competitors (kippenberger, 1996; surowiecki,1999;ross,1999).

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 McDonald’s had always been an innovator in developing new fast-food products. Some of the company’s products range from the Big Mac to McGriddles Breakfast Sandwich to Chicken MnNuggets to Ice Coffee Beverages to Premium Salad etc. The company easily understand the fast-food needs of customer. It knows the kind of product to design to get the public attention. In April 2003 McDonald’s launch Premium Salads and McGriddles Breakfast Sandwich to attract health-conscious women that have stopped eating McDonald’s food due to the fat content which they claim McDonald’s food contained. One vital way through which McDonald’s differentiated itself from its ...

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