Direct (Deductive)

      The reason for the success of the McDonald Valley. Can be analyzed as follows.

        MacDonald's strategy

                              1. The low price and volume strategy

            MacDonald's   has in the world, a policy of low prices and volume, major elements of its competitive advantage. To deliver all meals daily, prices must be affordable. We don't go to McDonald's like we go into a classic restaurant. McDonald's goal is to attract consumers the most regularly possible, it should not propose menus at high prices.

             Product prices are not identical in all countries and within countries there are also different prices depending on the location. So they vary according to local competition and promotions, sometimes in each restaurant.

             Moreover, it should be noted that 70% of McDonald's sales are made each day over a period of four hours. McDonald's has decided to try to change eating habits to attract more consumers during the peak hours for reduced rates. An example of this aggressive pricing policy: making the second menu half-price for all menu purchased the evening before 6 o'clock.

                                   2. Competitiveness

              There are 4 principal strategies used by the transnational firms: the provisioning strategy (1), the marketing strategy (2), the rationalization strategy (3), and at last the techno-financial strategies (4).

              

                This concept is bound to competitiveness, corresponding to the capacity of a company or a country to face competition. We can distinguish two types of competitiveness: price (5) and quality performance (6). It is important to know that the territory is an asset, the base on which investments and policies with medium-long terms are built by the transnational corporations, in order to benefit from the competitive advantages of their sites.

                 1) Provisioning stratagies:

They concern the primary multinational firms (MNF) and correspond to the production of raw materials in the objective to meet the needs of the processing industries.

                  2) Marketing strategies:

A marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.

                   

                  3) Rationalization strategies

They are intented to to lower the production prices, in particular by establishing subsidiary workshops in low-wage countries.

                  

                   4) Techno-financial strategies

The multinational firms of this type provide independant companies with immaterial activities. ( knowledge in management, licences, une assistance technique...)

                    5) Price competitiveness

Price Competitivenes is determined by the interaction of four factors leading to competitive prices on world markets: real input costs (material prices, wage rates, and the cost of capital); productivity; profit margins; and the exchange rate. Most firms have some control over the first three factors but have no control over the exchange rate. Government monetary and fiscal policies may directly or indirectly affect the first and fourth factors, while industrial targeting seeks to influence the second and third. Changes in competitive factors do not always occur in unison; shifts in one of the factors can be offset by movements in the opposite direction by another factor .

                      

                      6) Quality performance

It lies on the products quality, their adapation to the request, their reputation or their reliability, the effictiveness of the services after sale, the brand's image.