Describe McDonalds major products through the use of the BCG matrix.

McDonalds major products through the use of the BCG matrix are Star and Cash Cow. Under the clssic
BCG portfolio planning approach, the company invests funds from mature, successful products and
business (cash cows) to support promising products and business in faster-growing markets (stars and
questions marks), hoping to run into future cash cows. Eventually, their growth will slow down, and they
will turn into cash cows.
 Using the Product/Market Expansion Grid, shown in Figure 2.3, identify potential
growth opportunities for McDonalds.

Market Penetration

Company growth by increasing sales of current products to current market segments without
changing the product.

Product Development

Company growth by offering modified or new products to current market segments.

Diversification

Company growth through starting up or acquiring business outside the companys current products
and markets. The company careened from one failed idea to another. It tried to keep pace by
offering pizza, toasted deli sandwiches, and the Arch Deluxe, a heavily advertised new burger that
flopped. It bought into nonburger franchises like Chipotle and Boston Market.
3. What competitive strategies have been developed by McDonalds to combat
inroads made by such companies as Starbucks?
Lately, Starbucks (NASDAQ: SBUX) has felt a few sharp elbows from burger giant
McDonald's (NYSE: MCD). Starbucks is a story "in transition," with any luck back to its
growth and glory days. And with the return of Chairman and founder Howard Schultz to the
CEO role, Starbucks is going back to the basics.
Effective immediately, Starbucks will be offering a regular cup of coffee aptly named Pike's
Place Roast after the location of Starbucks' first store in Seattle. This blend of coffee will be
offered every day for customers who don't want to try the flavors of the week and prefer on
a standard, regular cup of coffee. Pike's Peak was blended after feedback from over 1,000
customers.
The return to basics means that freshly brewed coffee will now sit in holding pots for only
30 minutes as opposed to the old 1-2 hours. Breakfast sandwiches are being scrapped as
customers felt the egg aromas conflicted with the sought-after coffee aromas. All workers
at Starbucks have been re-trained to go back to the basics right down to asking the
customer his or her name after taking the order.
Starbucks is closing unprofitable stores in the US and actually slowing down new US store
openings. Its international growth agenda is still intact as margins will eventually accelerate
from foreign outlets. Economies of scale are on the horizon in international markets and
Starbucks will reap the benefits quickly.
Some will argue that McDonald's has made some inroads into the Starbucks customer base
by offering various blends and fancy concoctions. These two are not natural competitors as
McDonald's is still perceived as a food vendor primarily with coffee as an ancillary sale.
McDonald's has aggressively marketed its coffee offerings but the poaching of some
Starbucks customers remains largely anecdotal.
The good news for Starbucks shareholders is the downside potential for the stock is minimal
at the $17-18 level. The March quarter I am sure will not be pretty and Howard Schultz has
stopped providing earnings and revenue guidance to Wall Street. Nor will he provide
monthly same store sales numbers, as he wants his management team to manage annual
growth results as opposed to micro-managing for monthly comps.
Marketing Group Assignment
(MKT 1102) DB4

Affan Ghazi J130127745

Jivaraja J13012784
Pravin Danapaul J13012720
Depek Panjanathan J11009430