Google+ Consumer Psyche: Focussed strategy

Leader

Wednesday, February 11, 2009

Focussed strategy

Cost leadership strategy works excellently at all times as there is a segment of population who are price conscious. Once this segment moves up the income ladder they shift to better services and products. But now in times of recession most luxury and high priced brands are in a dilema on what to do: 
  • Cut prices and erode in times of brand value or
  • Take a hit in terms of profits and retain the value as the sales, profits and shareholder value plumment
In this case McDonalds is seeing a surge in the usage and repetitive purchases. The nation's No. 1 hamburger chain has been posting strong sales as the economic downturn in the U.S. spreads overseas and people turn away from pricier restaurants to grocery stores and fast-food outlets. "McDonald's continues to appeal to customers as we offer high-quality, affordable meal options and unparalleled convenience," Chief Executive Jim Skinner said in a statement.Shares rose 56 cents to end at $59.02. 

The clown is actually making the customers smile. The smile has a ripple effect on the employees and the shareholders too.
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