Vertical and Horizontal structures

A. Basic strategy model (See chapter 9)

McDonald's has focused its strategy on expanding its public, without losing the focus on family and children, who are the main targets of the network. Mc Donald’s utilizes a Multi-domestic strategy model effectively around the globe. This strategy is defined by its agility in the response of the local client needs and some differentiation. It uses the model that was successful locally on a global scale, through franchises, subsidiaries and joint ventures to explore a particular business, without any of the two companies. A company that follows a multi-domestic strategy adapts its products to each country in which it operates. The characteristics of the product are adapted to the local domestic environment, taking into account the food preferences, religious customs and other characteristics that define the locality. Companies opt to follow this strategy because their products will be better received by local customers, rather than being seen as something unusual that is produced by a foreign company.

B. Barriers to growth (economic, socio-political, regulatory, market trends, exchange rates, rivals’ initiatives)

Some Barriers to Growth found by Mcdonald's are Reducing the production of solid waste by reducing its volume and recovery of secondary materials and valuing healthy food, demand for customized products, new paradigms of environmental responsibility of organizations. Another problem are the rivals, The notable fast-food competitors Burger King, KFC, Domino's, Chinese restaurants, and recently supermarkets themselves offering pre-cooked food.Another barrier is The substitute products are pre-cooked, as they perform the same function as fast food restaurants, offer a meal with a good quality price, with a minimum preparation period and with the food from home.

C. Approach to growth of sales and earnings (Use Ansoff’s matrix. Also see Chapter 12.)

Next, we see Ansoff’s Matrix model in Figure 1 applied to Mc Donald’s. Ansoff's matrix is focused on showing the expansion of products and markets aimed at creating growth opportunities for companies. The Ansoff matrix is a quadrant composed of two dimensions products and markets. On the right side are the new products; And from the left, the existing ones. This combination forms four strategies for the growth and development of the company. These strategies are: market development, market penetration, diversification and product development. The definition of this chart shows in which market your company wants to act.

Figure 1 Ansoff’s Matrix.