Question

Please use the McDonald’s case to answer the following questions:
1) Is the burger store “Five Guys” belong to the same Strategic Group as McDonald’s?
    Yes or no and why? (4 points)
2) Please identify 1 strategic problem facing McDonald and offer your recommendation.
    (5 points)

Answer 1

ANS 1. NO, FIVE GUYS DO NOT BELONG TO SAME STRATEGIC GROUP AS OF MCDONALDS. THEY BOTH FOLLOWS DIFFERENT STRATEGIES AND APPROACHES. MCDONALDS PROVIDE STANDARDIZED PRODUCTS ALL OVER THE WORLD WITH SAME TASTE, FLAVORS, PRODUCTS ETC. WHEREAS FIVE GUYS ONLY BURGERS WITH A SMALL LIST OF CUSTOMIZED TOPPINGS. THEIR FOCUS IS TO PROVIDE GENEROUS HOSPITALITY SERVICES THAN DIVERSE PRODUCTS ON THE OTHER HAND, MCDONALDS PROVIDE SELF SERVICE FACILITY TO CUSTOMERS WITH A GOOD OPTIONS LIKE HOTDOG, FRIES, BURGERS ETC TO CHOOSE FROM. THEREFORE BOTH FOLLOW DIFFERENT STRATEGIES TO APPROACH CUSTOMERS.

ANS 2. ONE OF THE STRATEGICAL PROBLEM THAT MCDONALDS IS FACING IS ISSUES IN CUSTOMER SERVICES. IT IS HAVING LOWEST CUSTOMER SERVICE RANKING SINCE 2003 IN THE FAST FOOD INDUSTRY. THIS CAN BE DUE TO HIGH RATE OF EMPLOYEE TURNOVER. ITS TURNOVER RATE IS HIGHEST THAN ITS COMPETITORS. ANOTHER POINT CONTRIBUTING TO LOW CUSTOMER SERVICE IS THE SERVICES PROVIDED AT THE DRIVE-THRU WINDOW IS VERY SLOW. IT IS LOSING 1 PERCENT OF ITS 60 PERCENT REVENUE FROM DRIVE THRU IN EVERY 6 SECONDS. THEREFORE IMPACTING ITS OVERALL STATS OF REVENUE GROWTH. IT IS LOOSING APPROXIMATELY $97000 EVERY YEAR.

RECOMMENDATION TO MCDONALDS WOULD BE TO IMPROVE CUSTOMER SERVICES AT THE DRIVE THRU TO INCREASE ITS REVENUE AND RANKINGS. ALSO IT SHOULD PROVIDE EMPLOYEES WITH GOOD SALARIES AND INCENTIVES TO DECREASE THE TURNOVER RATE. MORE EMPLOYEES WILL INCREASE THE SPEED OF DRIVE THRU AND THIS WILL IMPROVE THE CUSTOMER SERVICES.