Using the 3-Circle Model to increase McDonald's breakfast revenue
Build & defend. Improving customer service, staff attitude and behaviors are an area with little up-front cost but long-range impact. Restaurant staff will participate in an extensive training program designed to improve the customer experience in McDonalds restaurants and to enhance on-the-job satisfaction for McDonalds employees. Explore & innovate. As some McDonalds restaurants are experiencing success with the "lodge-style" model—a model that captures several of the factors identified by customers as important, one strategy will focus on developing more of this "lodge-style" store in key locations. The stores will be closely monitored for return-on-investment in terms of increased breakfast and a.m. sales volume. Also, a focused customer satisfaction initiative will be conducted in each of these model stores. Neutralize. The most effective way to neutralize our competitors' points of difference is to match them point-by-point. Plans to create more "lodge-style" models will go a long way toward creating a new identity for McDonalds that is categorically similar to Starbucks. Correct, reduce, remove, or reveal. Creating healthful menus and ensuring that nutritional information is readily available for consumer review is a straightforward improvement that can be addressed without an extensive commitment of funds or delay.
✍️ How to write this paper — guide, tools & examples ▾
Marketing Management - Use of 3 -- Circle Model
Marketing Management Using 3-Circle Method
The benefits of using the 3-Circle Model for evaluating a company, brand, or product are readily evident since the approach considers customer, company, and competitive aspects of the environment. While not customer-centric -- a view that would limit assessment -- the model does fold the consumer perspective into the evaluation. This is a different perspective than many strategic planning models which tend to focus primarily on the competitive environment. In this day and age, a considerable amount of power has shifted from companies to customers, enabling consumers to define the nature of the transaction in which they are willing to engage. For this reason, the customer circle is crucial to an assessment. The company circle is invaluable for determining how and where to locate assets to maintain and develop core competencies. Finally, the competitive circle utilizes a traditional environmental scan approach, but with a more interpretable process and display of outcomes.
Context Definition
The focus of the 3-Circle Model is growth. In this assessment, the objective is to determine how McDonalds can increase revenue from a.m. sales by creating and delivering more value to breakfast customers than Starbucks.
FIRST CIRCLE
Good
Need vs. offering. On the 10 most important factors as identified through the market research with customers, Starbucks has 3 "Excellent" ratings, 4 "Good" ratings, and 3 "Okay" ratings. McDonalds has 1 "Excellent" rating, 4 "Good" ratings, 4 "Okay" ratings, and 1 "Poor" ratings. Overall, McDonalds brand offering does not overlap the customers' needs as completely as the Starbucks' brand does.
Parity/common value. Three of the top 10 factors show both McDonalds and Starbucks meeting customer needs and adding value to their experience with the brands. Customers appreciate the speed of service, are satisfied with food quality, and find the restrooms clean.
Top 10 Factors
Importance
McDonalds
Starbucks
Hot food options
2
Good
Okay
Organic food options
3
Okay
Good
Homemade taste
2
Good
Okay
Short wait times
3
Excellent
Excellent
Quality of food
3
Good
Good
Courteous service
3
Okay
Excellent
Nutrition info posted
2
Okay
Okay
Healthful menu
3
Poor
Good
Nice ambiance
2
Okay
Excellent
Clean restrooms
2
Good
Good
Areas of deficiency. McDonald's is not providing sufficient value for customers where the factors are one to two ratings below those of Starbucks, and where the rating is a "3" or very important to the customer. The two areas with the strongest deficiency and difference from the competition are courteous service and nice ambiance. It is notable that several McDonalds restaurants in the chain have not received low ratings for ambiance. These restaurants have served as experimental models in very well-to-do neighborhoods, and are characterized by "lodge-style" interiors and elaborate play structures for children. Breakfast volume at these model McDonalds are higher than for non-model McDonalds restaurants, with more customers eating on the premise and lingering, often with their children.
Top 10 Factors
Importance
McDonalds
Starbucks
Hot food options
2
Good
Okay
Organic food options
3
Okay
Good
Homemade taste
2
Good
Okay
Short wait times
3
Excellent
Excellent
Quality of food
3
Good
Good
Courteous service
3
Okay
Excellent
Nutrition info posted
2
Okay
Okay
Healthful menu
3
Poor
Good
Nice ambiance
2
Okay
Excellent
Clean restrooms
2
Good
Good
McDonald's point of difference. Customers rated hot food options and homemade taste as moderately important to them when choosing where to eat. McDonalds earned higher ratings from customers on both of these points, and the factors align with the key attributes of the foods McDonald's serves.
Top 10 Factors
Importance
McDonalds
Starbucks
Hot food options
2
Good
Okay
Organic food options
3
Okay
Good
Homemade taste
2
Good
Okay
Short wait times
3
Excellent
Excellent
Quality of food
3
Good
Good
Courteous service
3
Okay
Excellent
Nutrition info posted
2
Okay
Okay
Healthful menu
3
Poor
Good
Nice ambiance
2
Okay
Excellent
Clean restrooms
2
Good
Good
Unmet customer needs. The juxtaposition of McDonalds areas of deficiency and points of difference create a mosaic in which unmet needs of McDonalds customers are articulated. McDonalds customers are looking for a quality breakfast experience that allows them to feel good about the food choices they have made and to feel welcome in the restaurant in a "down-home" as opposed to "up-town" way. The unmet needs for McDonalds customers fall into the category of fresh, local and "slow" food -- menu items that are not overly processed -- f or breakfast.
Top 10 Factors
Importance
McDonalds
Starbucks
Hot food options
2
Good
Okay
Organic food options
3
Okay
Good
Homemade taste
2
Good
Okay
Short wait times
3
Excellent
Excellent
Quality of food
3
Good
Good
Courteous service
3
Okay
Excellent
Nutrition info posted
2
Okay
Okay
Healthful menu
3
Poor
Good
Nice ambiance
2
Okay
Excellent
Clean restrooms
2
Good
Good
THIRD CIRCLE
Growth Strategy & Tactics
Build & defend. Improving customer service, staff attitude and behaviors are an area with little up-front cost but long-range impact. Restaurant staff will participate in an extensive training program designed to improve the customer experience in McDonalds restaurants and to enhance on-the-job satisfaction for McDonalds employees.
Explore & innovate. As some McDonalds restaurants are experiencing success with the "lodge-style" model -- a model that captures several of the factors identified by customers as important, one strategy will focus on developing more of this "lodge-style" store in key locations. The stores will be closely monitored for return-on-investment in terms of increased breakfast and a.m. sales volume. Also, a focused customer satisfaction initiative will be conducted in each of these model stores.
Neutralize. The most effective way to neutralize our competitors' points of difference is to match them point-by-point. Plans to create more "lodge-style" models will go a long way toward creating a new identity for McDonalds that is categorically similar to Starbucks.
Correct, reduce, remove, or reveal. Creating healthful menus and ensuring that nutritional information is readily available for consumer review is a straightforward improvement that can be addressed without an extensive commitment of funds or delay.
Growth Strategies
Brainstorming growth strategies. At least one growth idea was generated for each growth strategy area. Customer satisfaction information was rechecked to ensure that data was interpreted accurately.
Growth Strategy Area
Question Summary
Growth Ideas
Fix Deficiencies
E to B
Impacts customer value a lot, but is low cost to fix
Courteous service
Build / Expand A
B to A
Points of parity to build on to enhance A
Quality of food
D to A
Connect attributes to value proposition
More organic
E to A
Improve dis-equities beyond competitors'
Nicer ambiance
F to A
Create short-term differential advantage
Nutrition info
G to A
Unused but real drivers of demand
Use of local food
Neutralize
C to B
Match or exceed competitor value
Quality coffee
C to A
Ignore other competitor values
Universal ambiance
Reduce Costs
E or D
Reduce w/out loss of value= use more local food
Hot food items
Selecting growth strategies.
Growth Strategy Area
Growth Ideas
Resources / Capabilities / Networks
Fix Deficiencies
E to B
Courteous service
Training -- McDonalds' University
Build / Expand A
B to A
Quality of food
Local bakeries and farms
D to A
More organic
Local organic farms
E to A
Nicer ambiance
Design team & regional studies
F to A
Nutrition info
Licensed characters to present information
G to A
Use of local food
Local farms & regional recipes
Neutralize
C to B
Quality coffee
McCafe and K-Cup machines
C to A
Universal ambiance
Design team & regional studies
Reduce Costs
E or D
Hot food items
Local farms and regional recipes
Presenting selected growth strategies with tactical plan.
Growth Strategy Area
Growth Ideas
Tactical Ideas
Fix Deficiencies
E to B
Courteous service
Reward teams with high customer service ratings
Build / Expand A
B to A
Quality of food
Add homestyle soups and local artisan breads
D to A
More organic
Organic veggies for kids & salads, organic meats
E to A
Nicer ambiance
Re-design of high traffic / high volume stores
F to A
Nutrition info
Provide nutrition information baseball cards
G to A
Use of local food
Feature local farm food & recipes
Neutralize
C to B
Quality coffee
Continue and add to the McCafe beverages
C to A
Universal ambiance
Bring all restaurants up to lodge-style standards
Reduce Costs
E or D
Hot food items
Switch out more hot dishes with fresh foods
Create your account
Always verify citation format against your institution’s current style guide requirements.