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How Did McDonald’s Build Its Sustainable Competitive Advantage? -The Key Success Factors and Business Strategy
A guy named Ray Kroc, aged 52, diabetic, with medical problems in knee and hip, who went to sell multi-mixer machines to McDonald brothers ended up purchasing the franchise rights for McDonald’s stores. Though he began with an aim to sell more multi-mixers through McDonald’s’ franchises, his thoughts transformed over a period of time, and finally, McDonald’s became his passion. In the next 63 years, McDonald’s network grew to nearly 35,000 stores in 119 countries.
How did McDonald’s become a leader? What right things did Ray Kroc and his team did? What could we learn from them?
POSITIONING
The first step for any business is to ponder how to occupy space inside a consumer’s mind, which is called ‘Positioning’. It can also be termed as a consumer’s perception of a brand with respect to competing brands. A customer would notice a brand only when there is a markable difference from other brands.
Michael Porter writes, “A company can outperform rivals only if it can establish a difference that it can preserve. It must offer greater value to customers or create comparable value at a lower cost, or do both”
What values did McDonald’s offer in those initial years?
In the 1930s, the ‘fast food’ concept was spreading among the masses. A lot of drive-in restaurants sprouted in many places. The fast-food menu was revolving around Barbecue Beef, Pork, and Chicken. Into this scenario, in the year 1937, two brothers Maurice and Richard McDonald started their own fast-food restaurant in San Bernardino. The business soon attracted a lot of teenagers and continued to grow rapidly.
