McDonald’s Public Enemy #1 – Wendy’s
By George Anderson
A memo sent to McDonald’s franchisees pretty much says it all. Wendy’s “is the face of the enemy over the next 18 months.”
While Wendy’s has struggled recently, the number one fast food chain sees its smaller rival making a push into the breakfast business as well as targeting younger consumers and the chicken sandwich market for growth. All are areas where McDonald’s sees growth potential.
Additionally, Wendy’s recent introduction of value meal items moved it into new territory in direct competition with McDonald’s and its other chief rival Burger King.
Wendy’s incoming chairman, James Pickett, said last week, “While there is no quick fix, we intend to regain positive momentum by improving our restaurant operations, driving sales by launching new, innovative products our customers want, and focusing on more effective marketing.”
McDonald’s has promised franchisees it will reinforce efforts to stave off any competition.
On the perceived threat to its breakfast business, the company said, “We have to get aggressive on advertising, products and operations at breakfast.”
McDonald’s is looking to gain the same presence in the chicken sandwich market that it has in other product categories. The fast food chain estimates it can achieve an additional $1 billion in sales with chicken items over the next three years.
In the correspondence to its franchisees, McDonald’s acknowledged that it currently trails Wendy’s and Burger King in the premium chicken sandwich segment. The company’s lack of success, according to the franchisee correspondence, is tied to the perception that the other chains offer higher quality products. McDonald’s pledged to reverse that perception and become “best in class in chicken.”
Moderator’s Comment: What are your thoughts on McDonald’s planned response to the perceived competitive threat from
Wendy’s? Do retailers and others risk losing their focus on their own customers and operations by framing marketing, pricing and product responses based on what competitors are
doing? – George Anderson – Moderator