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These strategies are market penetration and market growth, the latter being especially important for McDonalds, since the company operates in a number of major countries in which it has a low market share.
In both the short and long-run, McDonalds should therefore focus on an aggressive growth strategy. Such an approach will leverage its advantages in order to capture a greater share of these markets. The result should be that McDonalds establishes a strong financial position for itself, and does so before many competitors can really even enter these markets. Indeed, if we look at the major Asian markets, McDonalds is only competing with Yum and Starbucks, so there is a lot of opportunity.
The SPACE matrix is applied to the entire business, which unfortunately leaves the breakfast question unanswered. McDonalds is essentially working with a defensive approach, but perhaps the aggressive approach is better. McDonalds has a lot of brand credit with consumers, and is an efficient operator. The problem is that before lunch, Starbucks is just as strong. McDonalds can only win back share by being competitive, which is not the strategy that the matrix recommends but might be better for making short-run gains.
Appendix A: McDonalds SWOT analysis
Strengths
Weaknesses
Opportunities
Threats
Highly profitable (20% net margin
Sluggish brand growth (51st overall)
APMEA growth (17.5% in FY08)
Competition from SBUX in breakfast ($10bn, mostly in a.m.)
Sound financial condition (1.14 current ratio)
Translation losses ($642m in Q1FY09)
Europe growth (11.1% in FY08)
Bad publicity (multiple activists, films)
Powerful brand ($33 billion...
(2014). Why Starbucks could beat Yum Brands and McDonalds in the war for breakfast. Motley Fool. Retrieved April 9, 2014 from http://www.fool.com/investing/general/2014/04/04/why-starbucks-could-beat-yum-brands-and-mcdonald-s.aspx
Interbrand. (2014). McDonalds. Interbrand. Retrieved April 9, 2014 from http://www.interbrand.com/en/our-work/McDonalds.aspx
Interbrand. (2009). Best global brands 2009. Interbrand. Retrieved April 9, 2014 from http://www.interbrand.com/en/best-global-brands/best-global-brands-2009.aspx
References
Cardenal, A. (2014). Why Starbucks could beat Yum Brands and McDonalds in the war for breakfast. Motley Fool. Retrieved April 9, 2014 from http://www.fool.com/investing/general/2014/04/04/why-starbucks-could-beat-yum-brands-and-mcdonald-s.aspx
Interbrand. (2014). McDonalds. Interbrand. Retrieved April 9, 2014 from http://www.interbrand.com/en/our-work/McDonalds.aspx
Interbrand. (2009). Best global brands 2009. Interbrand. Retrieved April 9, 2014 from http://www.interbrand.com/en/best-global-brands/best-global-brands-2009.aspx
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