McDonald’s Corporation is a global fast-food restaurant chain and one of the most recognizable and iconic brands in the world. Founded in 1940 by Richard and Maurice McDonald as a drive-in restaurant in San Bernardino, California, the company has since grown into a global phenomenon, serving millions of customers daily. We will discuss McDonald’s Strategy Analysis in short in this article.

McDonald's Business Strategy Analysis

Key Information:

  1. Founding Year: McDonald’s traces its roots to 1940 when the original McDonald’s Bar-B-Q restaurant was opened by the McDonald brothers.
  2. Founders: Richard McDonald and Maurice McDonald initially started the restaurant. Ray Kroc, a Multimixer milkshake machine sales agent, played a crucial role in transforming McDonald’s into a franchise business.
  3. Franchise Model: McDonald’s is known for its franchise business model. Franchisees operate the majority of McDonald’s restaurants globally, allowing for rapid expansion and maintaining a consistent brand image.
  4. Iconic Golden Arches: The iconic Golden Arches, the distinctive logo of McDonald’s, is one of the most recognizable symbols worldwide.
  5. Menu Innovation: McDonald’s is known for its menu innovation, offering a diverse range of fast-food items. The introduction of the Big Mac, Happy Meal, and the iconic McDonald’s french fries are among the notable menu additions.
  6. Global Presence: McDonald’s operates in over 100 countries, with thousands of restaurants worldwide. Its global reach and standardized operating procedures contribute to its success.
  7. Digital Transformation: McDonald’s has embraced digital technologies to enhance customer experience and streamline operations. This includes self-service kiosks, mobile ordering, and a global mobile app.
  8. Commitment to Sustainability: In recent years, McDonald’s has made strides in sustainability initiatives. The company has set goals for sustainable sourcing, eco-friendly packaging, and reducing its environmental impact.
  9. Cultural Impact: McDonald’s has had a profound impact on global culture, influencing not only the fast-food industry but also popularizing the concept of quick-service restaurants and standardizing fast-food practices.
  10. Corporate Social Responsibility: McDonald’s engages in various corporate social responsibility initiatives, including involvement in local communities, charitable contributions, and Ronald McDonald House Charities.
  11. Marketing and Advertising: McDonald’s is renowned for its effective marketing and advertising strategies. The introduction of mascots like Ronald McDonald and iconic campaigns such as “I’m Lovin’ It” have contributed to the brand’s cultural significance.

History of Mc Donald’s

The history of McDonald’s dates back to the mid-20th century, and it involves the collaboration of two entrepreneurs, Ray Kroc and Richard and Maurice McDonald. Here’s a chronological overview of the key milestones in the history of McDonald’s:

1. 1940 – The First McDonald’s Restaurant:

  • Richard and Maurice McDonald opened the first McDonald’s restaurant in San Bernardino, California, in 1940. Initially, it was a drive-in restaurant named “McDonald’s Bar-B-Q.”

2. 1948 – Introduction of Speedee Service System:

  • In 1948, the McDonald brothers revamped their restaurant and introduced the “Speedee Service System,” emphasizing a simple menu, fast service, and low prices.

3. 1954 – Ray Kroc Enters the Picture:

  • Ray Kroc, a Multimixer milkshake machine sales agent, learned about the McDonald brothers’ successful restaurant and became interested in franchising the concept.

4. 1955 – First McDonald’s Franchise:

  • Ray Kroc opened the first McDonald’s franchise in Des Plaines, Illinois, in 1955. This marked the beginning of the expansion of McDonald’s as a franchised fast-food chain.

5. 1957 – The Introduction of the Filet-O-Fish:

  • The Filet-O-Fish was introduced to the menu in 1957 in response to customer preferences during Lent, demonstrating an early commitment to menu innovation.

6. 1961 – Purchase of McDonald’s Corporation:

  • Ray Kroc purchased the McDonald brothers’ equity in the company for $2.7 million in 1961, gaining control of the McDonald’s Corporation.

7. 1963 – Launch of the Ronald McDonald Character:

  • The first Ronald McDonald character, a clown mascot, was introduced in 1963, marking the beginning of McDonald’s iconic marketing approach targeting children.

8. 1965 – Public Offering:

  • McDonald’s Corporation went public in 1965, with its shares listed on the New York Stock Exchange.

9. 1968 – Big Mac and the National Advertising Fund:

  • The Big Mac was introduced in 1968, becoming one of McDonald’s most iconic menu items. The same year, the National Advertising Fund was established to fund national advertising campaigns.

10. 1971 – Opening of the First International McDonald’s:

  • The first international McDonald’s restaurant opened in Tokyo, Japan, marking the beginning of McDonald’s global expansion.

11. 1984 – Introduction of Chicken McNuggets:

  • Chicken McNuggets were introduced to the menu in 1984, providing another successful and popular menu item.

12. 1990s – Global Expansion Continues:

  • McDonald’s continued its international expansion throughout the 1990s, opening restaurants in various countries and adapting menus to local tastes.

13. 2003 – “I’m Lovin’ It” Campaign:

  • The “I’m Lovin’ It” global marketing campaign was launched in 2003, featuring a catchy jingle and aiming to create a unified brand image worldwide.

14. 2010s – Focus on Healthier Options and Modernization:

  • In response to changing consumer preferences, McDonald’s introduced healthier menu options and focused on modernizing its restaurants, with initiatives such as the introduction of McCafe coffee.

15. 2020s – Digital Transformation and Sustainability:

  • McDonald’s has continued to embrace digital technologies, enhancing its digital ordering and delivery capabilities. Sustainability initiatives, such as eco-friendly packaging and sourcing, remain a focus.

Throughout its history, McDonald’s has evolved into one of the world’s largest and most recognizable fast-food chains, serving billions of customers annually in numerous countries. The company’s success can be attributed to its ability to adapt to changing consumer preferences, embrace innovation, and expand globally while maintaining core brand principles.

Key Financial Highlights (as of the latest available information up to 2021)

  1. Revenue: In the fiscal year 2020, McDonald’s reported a global revenue of approximately $19.21 billion. It’s important to note that the COVID-19 pandemic had a significant impact on the company’s operations and financials in 2020.
  2. Net Income: McDonald’s reported a net income of around $4.73 billion in 2020. The net income was affected by the pandemic-related challenges, including temporary closures of restaurants and changes in consumer behavior.
  3. Global Comparable Sales: McDonald’s global comparable sales, a key performance indicator in the restaurant industry, faced challenges in 2020 due to the pandemic. However, there were signs of recovery in some regions towards the end of the year.
  4. Digital Sales Growth: McDonald’s has been focusing on digital transformation and online ordering. Digital sales have shown significant growth, with an increasing number of customers using the mobile app and delivery services.
  5. Dividends: McDonald’s is known for its consistent payment of dividends to shareholders. The company has a history of returning value to its investors through dividends and share repurchases.
  6. Total Assets: As of the end of 2020, McDonald’s total assets were around $45 billion.
  7. Franchise Model: A significant portion of McDonald’s restaurants operate under the franchise model, contributing to a steady stream of franchise and rental income.

It’s important to consider that the restaurant industry, including McDonald’s, has been influenced by various factors, including economic conditions, consumer preferences, and global events (such as the COVID-19 pandemic), which can impact financial performance.

Business innovation and strategy

McDonald’s, as a global leader in the fast-food industry, has consistently employed business innovation and strategic initiatives to stay relevant, competitive, and adapt to changing consumer preferences. Here’s an analysis of McDonald’s business innovation and strategy:

1. Digital Transformation:

  • McDonald’s has invested significantly in digital technologies to enhance customer experience and streamline operations. This includes mobile ordering, self-service kiosks, and mobile app features.
  • The “McDonald’s Global Mobile App” allows customers to order, pay, and receive personalized offers, contributing to customer engagement and loyalty.

2. Menu Innovation:

  • McDonald’s continually adapts its menu to cater to diverse tastes globally. While maintaining core offerings, the company introduces regional and seasonal items to appeal to local preferences.
  • Emphasis on healthier choices, including salads, wraps, and options for customization, reflects a response to changing consumer attitudes towards health and wellness.

3. Sustainability Initiatives:

  • McDonald’s has taken steps to address environmental concerns. Initiatives include sustainable sourcing of ingredients, reducing waste, and efforts to make packaging more environmentally friendly.
  • Commitments to sustainable beef sourcing and recycling programs demonstrate a proactive approach to corporate social responsibility.

4. Expansion into Emerging Markets:

  • McDonald’s consistently explores opportunities in emerging markets. Adapting to local cultures and preferences, the company tailors its menu to suit diverse tastes, allowing for successful market penetration.
  • Expansion into countries like China and India demonstrates a commitment to tapping into growing consumer markets.

5. Emphasis on Health and Wellness:

  • McDonald’s has responded to the increasing demand for healthier food options by incorporating salads, fruit, and grilled chicken into its menu.
  • The company has made efforts to provide transparent nutritional information, empowering customers to make informed choices.

6. All-Day Breakfast and Extended Hours:

  • The introduction of all-day breakfast was a strategic move to cater to changing consumer lifestyles and preferences for breakfast items at any time of the day.
  • Extended hours in some locations have targeted different customer segments, such as late-night snackers.

7. Franchise Model:

  • McDonald’s successful franchise model allows for rapid global expansion while maintaining consistent quality and brand standards.
  • The company collaborates closely with franchisees, ensuring a symbiotic relationship and a shared commitment to innovation.

8. Marketing and Branding:

  • McDonald’s iconic branding and effective marketing campaigns contribute significantly to its success. Consistent messaging, memorable advertising, and sponsorship of global events enhance brand visibility and customer recall.

9. Data-Driven Decision-Making:

  • McDonald’s leverages data analytics to understand consumer preferences, optimize menu offerings, and personalize marketing efforts.
  • The use of data aids in predicting trends and tailoring strategies to specific markets.

10. Collaborations and Partnerships:

  • McDonald’s has engaged in strategic partnerships, such as collaborations with popular brands for limited-time promotions or co-branded products, creating excitement and driving traffic to its outlets.

McDonald’s success in the fast-food industry can be attributed to its continuous business innovation and strategic adaptation to evolving consumer demands. By embracing digital transformation, sustainability, menu innovation, and a global perspective, McDonald’s has maintained its position as a market leader. The ability to balance tradition with innovation and respond to societal and environmental trends will be crucial for its continued success in the dynamic fast-food landscape.

1. SWOT Analysis:


  • Global brand recognition and presence.
  • Extensive and efficient supply chain management.
  • Diverse menu catering to local tastes in various regions.
  • Strong marketing and advertising.


  • Dependency on franchisees, which can lead to inconsistencies.
  • Perception of unhealthy food choices.
  • Vulnerability to changes in consumer preferences.


  • Expanding into emerging markets.
  • Embracing healthier menu options to address changing consumer trends.
  • Digitalization and technology adoption for enhanced customer experience.


  • Intense competition in the fast-food industry.
  • Fluctuations in commodity prices affecting input costs.
  • Legal and regulatory challenges related to health and nutrition.

2. PESTLE Analysis:


  • Compliance with diverse international regulations.
  • Influence of government policies on food safety and labeling.


  • Sensitivity to economic downturns affecting consumer spending.
  • Currency exchange rate fluctuations in global operations.


  • Changing consumer preferences towards healthier options.
  • Cultural adaptation of menu items to suit local tastes.


  • Integration of technology in operations and customer experience.
  • Use of data analytics for customer insights and targeted marketing.


  • Compliance with health and safety regulations.
  • Legal challenges related to labor practices and franchising.


  • Growing emphasis on sustainability and environmental responsibility.
  • Pressure to reduce environmental impact in packaging and operations.

3. Porter’s Five Forces Analysis:

Threat of New Entrants:

  • High brand loyalty and economies of scale act as barriers.
  • Capital-intensive nature of the industry deters new entrants.

Bargaining Power of Buyers:

  • Moderate due to the availability of alternatives.
  • Consumer sensitivity to price changes.

Bargaining Power of Suppliers:

  • Moderate bargaining power of suppliers.
  • McDonald’s global scale helps in negotiating favorable terms.

Threat of Substitutes:

  • Moderate, as there are alternatives in the fast-food industry.
  • Growing awareness of healthier food options may increase the threat.

Competitive Rivalry:

  • Intense competition with other fast-food chains.
  • Constant innovation and adaptation are necessary.

4. Core Competencies:

  • Efficient supply chain management.
  • Strong brand and marketing.
  • Global infrastructure and standardization.
  • Continuous menu innovation.

5. Strategic Initiatives:

  • Expansion into new markets and adaptation to local preferences.
  • Embracing digital transformation for enhanced customer experience.
  • Efforts to improve the nutritional profile of menu items.
  • Sustainability initiatives to address environmental concerns.

McDonald‘s strategic analysis reveals a company with global strength and recognition, but one that faces challenges in adapting to changing consumer preferences and increasing scrutiny on health and sustainability. The company’s ability to innovate, adapt, and maintain its competitive edge will be crucial for future success.

Change management and strategic planning

Change management and strategic planning are closely interconnected aspects of organizational development. Both are critical for organizations aiming to adapt to evolving environments, capitalize on opportunities, and address challenges effectively. Let’s explore each concept and their relationship:

1. Change Management:

Definition: Change management involves the systematic approach to dealing with the transition or transformation of an organization’s goals, processes, or technologies.

Key Components:

  • Communication: Open and transparent communication is crucial to help employees understand the need for change, the benefits, and their role in the process.
  • Leadership Involvement: Strong leadership support is essential for successful change implementation. Leaders should be visible, accessible, and actively engaged in the change process.
  • Employee Involvement: Involving employees in the change process, getting their input, and addressing concerns can enhance commitment and reduce resistance.
  • Training and Development: Equip employees with the skills and knowledge required to adapt to new processes or technologies.
  • Cultural Considerations: Understand and address the organizational culture, as it plays a significant role in determining how change is received.

2. Strategic Planning:

Definition: Strategic planning is the process of defining an organization’s direction, making decisions on allocating its resources to pursue this direction, and guiding the implementation of the chosen strategies.

Key Components:

  • Vision and Mission: Establishing a clear vision and mission provides a sense of purpose and direction for the organization.
  • SWOT Analysis: Assessing strengths, weaknesses, opportunities, and threats helps in understanding the internal and external factors that may affect the organization.
  • Goals and Objectives: Defining specific, measurable, achievable, relevant, and time-bound (SMART) goals ensures clarity and accountability.
  • Action Plans: Developing detailed plans outlining how strategic goals will be achieved, including resource allocation, timelines, and responsible parties.
  • Monitoring and Evaluation: Regularly assessing progress against strategic objectives allows for adjustments and improvements as needed.

Relationship between Change Management and Strategic Planning:

  1. Alignment: Change initiatives should align with the overall strategic goals of the organization. Strategic planning provides the foundation for identifying the need for change and setting the direction.
  2. Implementation: Successful strategic plans often require organizational change. Change management practices ensure that employees understand and embrace the new strategies, making strategic plans more effective.
  3. Adaptation: As organizations implement strategic plans, they may encounter unforeseen challenges or need to adjust their approach. Change management provides the tools to adapt to these shifts smoothly.
  4. Leadership’s Role: Both change management and strategic planning require strong leadership. Leaders play a crucial role in setting the strategic direction and managing the change process.
  5. Communication: Clear and effective communication is essential in both change management and strategic planning. Communicating the strategic vision and the need for change fosters understanding and commitment

Change Management in McDonald’s:

  1. Digital Transformation: McDonald’s has been actively engaged in digital transformation, incorporating technology into its operations. This includes the implementation of self-service kiosks, mobile ordering, and digital payment options. Change management is crucial to ensure that employees are trained and comfortable with these new technologies.
  2. Menu Innovation: McDonald’s frequently adapts its menu to changing consumer preferences and global trends. Introducing new items and addressing nutritional concerns require effective change management to ensure a smooth transition and acceptance by both customers and employees.
  3. Sustainability Initiatives: Like many companies, McDonald’s has been working on sustainability goals, such as sourcing sustainable ingredients and implementing environmentally friendly practices. Change management is essential to integrate these initiatives into the company’s operations and supply chain.

Strategic Planning in McDonald’s:

  1. Global Expansion: McDonald’s has a long history of strategic planning related to global expansion. The company carefully selects markets for expansion, adapts its menu to local tastes, and navigates regulatory environments. Strategic planning plays a crucial role in ensuring the success of McDonald’s international ventures.
  2. Menu Diversification: McDonald’s strategic planning involves continuous menu diversification to appeal to a broad customer base. Introducing new products and optimizing the menu based on customer preferences is a strategic approach to maintaining relevance and competitiveness.
  3. Digital Innovation: McDonald’s strategic planning has been centered around digital innovation. The company invests in technology to enhance customer experience, optimize operations, and stay ahead of industry trends. This includes the development of mobile apps, digital ordering, and delivery services.
  4. Health and Wellness Focus: Addressing changing consumer preferences for healthier options, McDonald’s strategic planning includes menu adjustments to offer healthier choices. This aligns with broader societal trends towards more health-conscious eating.
  5. Franchise Model: McDonald’s strategic planning includes managing and optimizing its franchise model. The company carefully selects franchisees and works collaboratively to ensure brand consistency, operational standards, and mutual success.

It’s important to note that the specifics of change management and strategic planning at McDonald’s can evolve over time based on market conditions, consumer preferences, and internal considerations. For the latest and most accurate information, you may want to refer to McDonald’s official publications, financial reports, or press releases.