Essay: Growth Strategy of McDonalds
The popular growth strategy that was employed by McDonalds until recently pertained to opening new stores for operation over a large span of geographic area. “Replication, a familiar phenomenon sometimes referred to as the ‘McDonalds approach,’ entails the creation and operation of a large number of similar outlets that deliver a product or perform a service.” (Winter & Szulanski, 2001)
However now the company has changes its strategy and is investing in boosting sales in its existing stores operations.
The financial impact of this strategy has been tremendous resulting in financial growth for the company. In the recent years the demand for fast food products has been decreasing as the consumers have become increasingly aware of health risks and are focusing on eating healthy foods. McDonalds has taken up this opportunity and has started to provide a whole range of salads catering to such customers. As a result in 2003 “sales were up 13% to $9.1 billion, and net profits rose 38% to $1.1 billion, compared with the same period a year earlier.” (Economist, 2004)