McDonald’s generic competitive strategy

According to Thompson, Strickland & Gamble (2005) there are five different generic strategies a company can go for in the market; broad low-cost provider, focused low-cost provider, broad differentiators, focused differentiators, and best-cost provider.

McDonalds have several advantages of being the largest fast food provider on planet Earth. One advantage for McDonald’s is the economies of scale that are available that are available to them. McDonald’s have more than any other in the industry an advantage at producing at a low price. But even though McDonald’s have the biggest advantage, they are not trying to price out their competitors.

Competitors are as well having low priced products at the same price level as McDonald’s’ value meals. Thereby there is no-one in the industry who is able or willing to oust their competitors by taking a low-cost leadership on the selling price of the products. But it is still assumable that McDonald’s are taking a low-cost leadership on the production side because of their economies of scale.

The strategy towards their customers and market segment would be defined by a relative pricing strategy that would outperform their competitors. McDonalds have a quintessential American global brand to brand each of their products stronger than any of their competitors. So even though McDonald’s products and prices might not differentiate in an industry where products are easily copied, they are still able to outperform their competitors by being the best-cost provider through their massive brand value.

The generic competitive strategy used bye McDonald’s has been determined on the basis on their current actions in the market and their statements in their yearly report about future initiatives.