Golden Arches Going Healthy: paradigm shift or result of market change

McDonald’s announced this Thursday that starting early 2014, fruit and salad side dishes will be included into its Value-Meal. This decision foreshadows a series of others that is yet to come.

When analyzing an established company in relation to its environment, the Porter’s 5-Forces is an excellent tool. The quick service restaurant business is unstable since the barrier to entry is low. The profit margin is already at its thinnest, so slashing prices is not an option. to maintain its competitive advantage McDonald’s must seek product improvement and differentiation. Most likely, it  has realized through industry sales reports that its customers (who have absolute buyer power) are slowly moving away from “high calorie foods” in the US. The proposed changes will help differentiate McDonald’s from its main competitors in the race to offer healthier menu options.

However these early promises lack both impact and speed, and McDonald’s should really consider ramping up its commitments swiftly. Promoting healthy products will likely have minimal effect on the sales of its traditional goods which rely primarily on brand loyalty and cultivated tastes. The faster McDonald’s can “own” the image of a healthy yet hearty fast food, the stronger it will be in the future restaurant scene.

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