Does McDonald's need a new strategy?

Questions:

1. How should McDonald's respond to entry by "better burger" chains? 
2. Is this response consistent with its current strategy?
3. If the response is consistent with its current strategy, do you think the strategy positions McDonald's to have a sustained competitive advantage?
4. If the response is not consistent with its current strategy, do you think the McDonald's is revising its strategy and, if so, will the new strategy position McDonald's to have a sustained competitive advantage?

McDonald's Knows It's Losing the Burger Battle : Can It Come Back?

by: Julie Jargon
Oct 07, 2016
Click here to view the full article on WSJ.com

TOPICS: Microeconomics

SUMMARY: New, "better burger" chains are pulling in customers with gourmet, made-to-order hamburgers, a tactic McDonald's is struggling to mimic. The company is working on improved flavors and customized ordering, a goal in conflict with its need for speed and low cost.

CLASSROOM APPLICATION: Students can evaluate McDonald's burger strategy: frozen vs. fresh patties, made-to-order vs. mass burgers. The strategy about product attributes involves cost, consumer preferences, preparation time, and competitors' product attributes.

QUESTIONS: 
1. (Advanced) How does the entry of made-to-order hamburger chains affect McDonald's strategy?

2. (Advanced) What is the tradeoff McDonald's faces when deciding whether to serve fresh or frozen burgers? How do the costs of the two types of burgers, consumer preferences, and competitors' products affect the tradeoff?

3. (Introductory) Should McDonald's improve the quality of its current burgers or should it attempt to compete head to head with made-to-order burger chains?

Reviewed By: James Dearden, Lehigh University