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6

Please responded to both Peers posting below:

· How their response differs from yours on any of the company strategies.

· Post a response to those classmates as to why their or your answer is more accurate or may need to be reconsidered.

1A. AM…Based on recent press releases from McDonald’s (McDonald’s Corporation, n.d.), here are some of the business strategies analyzed. McDonald’s is clearly going after a broad target market strategy, meaning it’s trying to appeal to as many different types of customers as possible. As one of the biggest fast-food chains in the world, it aims to serve people across all age groups, income levels, and geographic areas. You can see this approach in action through campaigns like the yearlong Ronald McDonald House Charities initiative, wallet-friendly meal bundles, and even the limited-time Chicken Big Mac promotion. These efforts reflect McDonald’s goal of staying relevant to a wide audience by offering value, accessibility, and plenty of choices (David et al., 2023).

This broad appeal gives McDonald’s a big advantage—it can produce at scale, spread fixed costs, and remain a household name worldwide. But there’s a trade-off. Trying to please everyone can make it harder to deeply connect with niche audiences or customize offerings. It can also leave room for smaller, more flexible competitors to step in and meet very specific customer preferences (Durbin, 2024; Thompson, 2024a).

McDonald’s is also embracing forward integration—basically, it’s getting closer to its customers by cutting out some of the middle steps in how it reaches them. The McDonald’s app is a perfect example. Through it, the company offers personalized deals, loyalty rewards, and marketing tailored to user behavior. Campaigns like “Round-Up for RMHC” also connect the customer experience to a cause, which deepens emotional engagement (McDonald’s corporation, n.d.). These efforts not only help McDonald’s build stronger relationships with its customers, but they also make its sales and marketing more efficient and data-driven (David et al., 2023). Of course, this approach comes with challenges. Relying more on digital tools means the company has to constantly invest in technology and keep up with consumer expectations, especially in situations like food safety scares, where public trust can be fragile (Thompson, 2024b).

On the other hand, McDonald’s has not chosen to pursue backward integration. That would involve owning the farms, food processors, or other suppliers behind its ingredients. Even after the recent E. coli incident linked to slivered onions, McDonald’s chose to continue working with third-party suppliers instead of bringing supply chain operations in-house (Centers for Disease Control and Prevention, 2024). This helps the company stay lean and agile, but it also means it has less direct control over things like ingredient quality and safety. While owning parts of the supply chain might improve oversight and possibly lower costs in the long run, it would also require a huge investment and shift McDonald’s focus away from what it does best—running restaurants (David et al., 2023; Henderson, 2024).

Lastly, McDonald’s has avoided retrenchment or divestiture strategies. In other words, it’s not pulling back or selling off parts of the business despite inflation and some public pushback on pricing. Instead, the company has taken a proactive stance. McDonald’s USA President Joe Erlinger recently addressed claims of excessive price hikes, pointing out that the average price of a Big Mac has only gone up by 21% since 2019, not 100% as some viral posts claimed. He stressed that extreme prices (like the $18 Big Mac meal) are rare and don’t reflect the broader system. This kind of messaging shows that McDonald’s is focused on protecting its brand image and customer trust rather than scaling down operations (McDonald’s Corporation, n.d.). Cutting back might provide short-term financial relief, but it could also weaken the brand, especially in markets where McDonald’s still sees room to grow (David et al., 2023).

All in all, McDonald’s strategy right now is centered on reaching a large, diverse customer base and deepening engagement through digital and cause-related initiatives. At the same time, it’s avoiding moves that could slow down growth or signal retreat. This approach stays true to McDonald’s long-standing focus on consistency, scale, and brand strength.

References

Centers for Disease Control and Prevention. (2024, October 22). 
E. coli outbreak linked to onions served at McDonald’s. Centers for Disease Control and Prevention.

David, F. R., David, F. R., & David, M. E. (2023). 
Strategic management (18th ed.). Pearson Education (US). 

Durbin, D.-A. (2024, May 29). 
McDonald’s says $18 Big Mac meal was an “exception” and news reports overstated its price increases. AP News.

Henderson, B. (2024, October 25). 
Major chains pull onions due to E. coli concerns after Taylor Farms confirmed as McDonald’s supplier. Food Safety RSS.

McDonald’s Corporation. (n.d.).

Thompson, J. (2024a, October 17). 
Bubba Wallace gets new car and suit design to honor McDonald’s, Ronald McDonald house milestone partnership. Fox Business.

Thompson, J. (2024b, October 17). 
The success of McDonald’s loyalty program: Boosting Sales and customer engagement. Loyally.ai Blog | Customer Loyalty, Digital Rewards, CRM Strategies, and Business Growth Insights.

1B. SM…
McDonald’s Current and Future Strategies

After I reviewed McDonald’s current strategies from 2022–2023, I found that two major efforts they’re already pursuing include expanding their digital and loyalty programs and rolling out the McValue platform. McDonald’s has made major progress in growing its digital presence. In 2023, they reported 150 million active loyalty users within a 90-day period, and they aim to reach 250 million by 2027. One new feature they’re testing is called “Ready On Arrival,” which lets them prepare food ahead of time to improve speed and service (McDonald’s, 2023). In my opinion this is a smart strategy because having a large loyalty base allows for more personalized marketing and increased visits. Also, quicker and easier service makes customers more likely to come back. Still, this strategy has its challenges. High-tech systems cost a lot to implement and require staff training. Also, along with myself, not everyone is excited about using another mobile app, and some people may even have privacy concerns.

The second strategy McDonald’s is using is their McValue platform, which launched in 2024. Which features deals like an enhanced $5 Meal Deal and “Buy One, Add One for $1” offers available through the app (McDonald’s, 2024). I believe this is a good way to connect with customers who are trying to save money during these tough economic times. It also helps franchise owners offer deals that are tailored to their local markets. However, offering lower prices can cut into profits. There’s also a risk that customers will get used to waiting for discounts instead of paying full price. Both of these strategies follow good strategic guidelines because they’re based on data, build on the company’s strengths (like its franchise model and app usage), and help McDonald’s react quickly to market changes (David et al.,2023).

There are two strategies McDonald’s is not using yet, but should consider between before 2026. First, they haven’t fully embraced plant-based or healthier menu options on a global scale. Some of their competitors already offer items like Beyond Burgers or vegan desserts. Adding these types of products could help McDonald’s reach health-conscious customers and support their environmental, social, and governance (ESG) goals by reducing the carbon footprint of their menu. It also fits global diet trends and shows long-term thinking. On the flip side, new menu items cost money to develop, promote, and distribute. If customers don’t like them, it could lead to waste or pull sales away from core items.

Another strategy I noticed McDonald’s isn’t pursuing is debt reduction. Their 2024 balance sheet shows liabilities greater than their assets, with a debt-to-assets ratio of over 100%. That’s risky in the long term. Paying down debt could help reduce financial stress, lower interest payments, and give McDonald’s more freedom in the future. It would also show investors that the company is serious about long-term sustainability. However, focusing too much on debt reduction might limit their ability to buy back shares or invest in growth. It could also upset shareholders who expect regular returns.

In conclusion, I believe McDonald’s current focus on digital growth and value menus is smart and aligned with what customers need today. But if they want to stay competitive and strong in the future, they should add more health-focused menu items and take steps to improve their financial position by reducing debt. These moves would not only support ESG goals but also help McDonald’s prepare for changes in consumer behavior and economic conditions (David et al., 2023).

References

David, F. R., David, F. R., & David, M. E. (2023). 
Strategic management (18th ed.). Pearson Education.

McDonald’s Corporation. (2023). 
McDonald’s announces new targets for development, loyalty membership, and cloud technology.

McDonald’s Corporation. (2024). 
McDonald’s launching McValue platform in U.S. restaurants in 2025.