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Theory on selected topics - Essay Example

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BCG matrix adopted was developed by Boston Consulting Group in 1970, to assess the position of various product lines of particular business with regard to their relative importance. This approach is used by strategic manager of all the big companies to decide on which products…
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Download file to see previous pages These products are usually categorized according to their characteristics of market growth rate and market share. A typical BCG matrix is shown in the figure below:
As we all know that McDonald’s Corporation is made up of world-wide business, such as McDonald’s USA, McDonald’s Europe, McDonald’s Asia and McDonald’s America. We are going to use the lens of BCG matrix to determine the position of each of these businesses in a BCG matrix for McDonald’s Corporation. (QuickMBA, 2009)
STARS: Stars are those products that have a large market share in a rapidly growing industry. In simple words, these are successful products that need continuous investment to maintain their dominating position in the market. According to the statistics given in McDonald’s Corporation’s annual report, McDonald’s USA is a star. It has a high market share in the market which is booming rapidly. However, due to increased competition in the market, McDonald’s Corporation should invest in McDonald’s USA heavily, so that they do not lose out market share to other competitors like Burger King or KFC. (Daft, 1997).
A question-mark is a business that has low-market share in the rapidly growing industry. In order to increase the market share, the business will need more and more resources. However, it is not guaranteed that the business has enough potential to become a start. In the case of McDonald’s corporation, McDonald’s Europe falls under the category of a BCG Matrix “Question Mark”. McDonald’s Europe has found it tough to break into the food industry which is already congested with various firms in the industry. The culture diversification in the different parts of Europe has also resulted in low-demands and cash returns for McDonald’s Europe, making it a question mark. The only way to cure the problem is that McDonald should carry out a market research to find out what people ...Download file to see next pagesRead More
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