McDonald’s Business Model


The first thing I want you to understand about McDonald’s business strategy is:

It’s not only a fast-food chain, it’s a business empire with genius marketing strategies.

Be established in 1948 and nowadays have more than 36,000 stores globally. The value of McDonald’s is 154.92 billion U.S. dollars in 2021 and making this brand to be one of the most valuable fast food brands in the world.

And the brand itself value $US44.53 million.

So what are the marketing strategies behind this massive success?

For McDonald’s, there are a hundred marketing campaigns that have been run from the day it was established until today. And if cover all of them, I believe that we will need to spend a couple of months and thousands of pages to figure them out.

It’s too massive for me to do this, and also not really necessary for us to understand all the marketing strategies that did in years from this brand.

Knowing the best they did already help us learn a lot about the way how we should think and work on the marketing strategy for our business.

In this article, there are 3 biggest lessons I figure out when I study this brand marketing strategy that I believe plays the main role to build massive success for McDonald’s.

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No.1 McDonald’s business strategy: Create an Ecosystem for the Brand

Hamburgers and beverages are the main products of McDonald’s that the public knows about.

But the real estate empire, franchise system, and food supply should be known as the main sources of income for McDonald’s.

This is the way how McDonald’s earns money and makes its brand to be the most valuable in the fast-food market.

Difference from other fast-food companies, McDonald’s builds a massive franchise system. It gives the brand the opportunity to have a great number of stores in a short time globally while creating many products and services circles for the corporation. Besides, McDonald’s parent company also receives benefits from most of the stores’ activities.

From food supply for franchise stores to doing global and national marketing for the brand. And leases the real estate for business owners to rent and build their own McDonald’s store in these areas.

In a short word, you can think about the ecosystem of McDonald’s like this.

For example, we have Henry, a business owner who wants to sell McDonald’s hamburger.

So Henry will need to sign a franchise contract with McDonald’s to pay the amount of fee for using the brand.

Then, the foods, beverage, and types of equipment need to serve clients he also need to buy from McDonald’s or their partner’s suppliers to make sure the quality of foods in his stores will similar to the food chains globally.

McDonald’s also recommend for him the location to place the store (most of the time will be at the intersection, shopping malls, or the places with high population rate where McDonald’s makes sure he can sell the most).

And McDonald’s owns this land and let Henry rents it again from the brand (Most of stores be own directly by McDonald’s and the brand has its real estate value up to 30 billion dollars).

And as former McDonald’s CFO, Harry J. Sonneborn used to say that “We are not technically in the food business. We are in the real estate business”.

When you want to start to join in the circle of this brand to sell its products, you already start to join in its ecosystem and help the brand to be stronger.

No.2 McDonald’s business strategy: The focus on convenient and daily healthy demands.

After opening the first McDonald’s in 1955, after 65 years, this brand has grown to about 38,000 restaurants globally that serve close to 70 million (that’s 1% of the world’s population) hungry stomaches who love burger and chicken nuggets that serve quick and cheap.

McDonald's business strategy How this brand values 154.92 Billion U.S dollars Fast-Food Company
Photo by ready-made from Pexels

The brand focuses on the convenience of customers when the average time for a person to have their meal from McDonald’s just between 112s–180s for a burger meal. This is super fast when compared to having a meal from a traditional restaurant.

And the location of McDonald’s store is often in crowded areas such as intersections, malls, or nearby office buildings and schools. So, it’s very convenient for clients to come and have a meal or take-away easily.

Add-in healthy options

In late 2018, McDonald’s announced that all the preservatives, fake colors, and artificial ingredients be removed from McDonald’s foods.

And adding more healthier options such as Grilled Chicken Salad, Fruit & Maple Oatmeal, Fruit ‘N Yogurt Parfait,…as the demands from people about the healthy foods which made faster become more popular.

The healthy options help this brand change the prejudice about the fast-food equal unhealthy from people.

Now, they focus on building the brand image as fast-casual foods instead of fast food. It means that they provide consumers healthier selections with a higher price (just slightly) and still have fast-food convenience that consumers are willing to pay.

No.3 McDonald’s business strategy: The targeted group of customers is kids and families

If parents let the kid choose where to have a meal, McDonald wants to be the first option in the kid’s head.

The reason is McDonald’s doesn’t want to be just a food store, it wants to be a place where any kids love to come.

And for many parents, letting a kid complete a meal is really tough challenge per day and normally can take up to an hour for kids to finish a meal.

But when you go to McDonald’s stores, you will see the kids choose the foods by themselves and love to self-eating without any support from parents.

This is a great time for young parents when they don’t need to feed their children and have a little bit of time for themselves.

And for groups of teenagers, the store where has a valuable menu with a lot of yummy foods at an affordable price and free wifi is a great place to enjoy the meal and have a fun time with friends.

As stated earlier, McDonald’s markets towards families and children and presenting the restaurant as a fun place to go with your family. Some advertisements talk about how children “always have a friend with big red shoes”.

And when you check the top 10 best commercial videos of McDonald’s, you will see the main theme is focusing on the family and happy moments of kids when they have the opportunity to go to the McDonald’s stores.

Final Thoughts

These are 3 lessons about marketing that we can learn from McDonald’s business strategy:

1. Create an ecosystem of products that can be franchised to optimize the benefits — Make products can go over the border.

2. The focus on convenient and daily healthy demands — Meet the real needs of clients.

3. The targeted group of customers is kids and families — Clear about the targeted customer section.

When it comes to doing marketing for your brand, doesn’t matter which area you are in.

If you can find the solution to make your brand an ecosystem that can be franchised and create the benefits for a massive group, you will win the market for your brand quickly than you even can’t imagine.

Like the way how McDonald’s used these three main strategies to win the fast-food market and is the largest player in this game.

Disclaimer: This article is a personal analysis from my own research, I don’t work for McDonald’s or any organization to make this article. It should be used as reading material for expanding understanding of business models only. You (and only you) are responsible for the way you use and understand this topic.

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