Analysis of the Development Strategies of McDonald’s

Abstract

Fast-food chain industry in China has been thriving for the last thirty years, with an acceleration of urbanization and changes in consumers’ willingness to eat outside. It is foreseeable that the future market of the fast-food chain industry is going to be more competitive and fiercer, and how companies develop in the such environment by developing reasonable market and management strategies is vital. In this case, McDonald’s is a good example to be referred to. This passage analyses McDonald’s performance with its competitors adopting different financial metrics, including revenue streams, profit margins, and P/E ratios. SWOT Analysis is as well adopted to analyze how Mcdonald’s is able to fully take advantage of its strengths and seize the opportunities to solve weaknesses and decrease threats. In addition, after CITIC and CITIC Capital have taken up a total controlling stake of 52% in Mcdonald’s (China), a new round of reform in development strategies has begun. This passage argues that Mcdonald’s (China) updated its localization strategies and plans of expansion, including innovating its products and advertisements strategies, along with the development of digital order and payment methods to attract more young consumers. It is concluded that, with a high marginal rate of 82% for franchise stores, McDonald’s (China) plans to expand in third and fourth-tier cities and sink markets of China to boost revenues when the first-tier cities have reached saturation, accompanied by Green Development to fulfill its ESG goals and maintain sustainable development.