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Case Title:

McDonalds Instigating Price War in the US: Winning strategy?

Publication Year : 2006

Authors: Aruna.N

Industry: Retailing

Region:USA

Case Code: GRS0105B

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
The US fast-food industry was dominated by McDonalds followed by Burger King and Wendy’s in the 1990s. In 2002, McDonalds and Burger King were involved in a price war and this price war had an adverse affect on the entire US Fast-Food chain. All the players in the fast-food industry experienced decline in their sales. McDonalds was facing more problems due to the price war and started working on its turnaround plan. In 2006, Wendy’s had plans to enter the breakfast business which was dominated by McDonalds since 1973. McDonalds sensed this as a threat to its business and so prepared for a price war against Wendy’s. Analysts felt that another price war by McDonalds would only ruin its image further and were skeptical about its success in the longer run.

Pedagogical Objectives:

  • To discuss how price war can affect the entire fast food industry
  • To understand how McDonalds was affected by price war.

Keywords : McDonalds; price war; Fast food Industry; Wendys; Burger King; Market leadership; quality; Growth Strategies Case Study; eroding image; Standardisation turnaround; competition

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