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McDonald's Bytes Off More Than It Can Chew With WiFi

McDonald’s is no longer attempting to pull American’s under those “golden arches” with Happy Meals and onsite playgrounds alone. Following in the steps of Starbucks, McDonald’s is “going WiFi”. Having launched the concept in UK this month, the American fast food chain has plans to roll out the idea across several major US cities in 2004-2005.

Although some members of our team have questioned the overall appeal of WiFi in a McDonald’s voicing concerns about sacrificing New Year’s resolutions for on-the-road internet access ("How can you concentrate with that entoxicating fries smell circling around you the whole time?"), there is a larger question to consider regarding this strategic move: “What was the strategic rationale behind McDonald’s recent WiFi decision?”

First, our research clearly shows that Starbucks is a direct competitor of McDonald’s. Does the WiFi decision suggest that McDonalds is trying to keep up with Starbucks, differentiate itself from traditional rivals like Burger King and Taco Bell, or both? Furthermore, if hotels and 2000 Starbucks have implemented WiFi in order to drive business traveler traffic, does this suggest that McDonald’s marketing target is changing from soccer-mom to the company-man/woman? One can only guess that professionals would rather their clothes smell of moca lattes than chichen mcnuggets. Counting the suits in our neighborhood McDonald’s, we were hardpressed to seriously believe that business travelers are a promising market segment for the fast-food chain.

In the end of the day, McDonald’s rationale for this decision can only be that its partnerships with wireless carriers are another means of generating revenue from its retail locations. The rollout of WiFi across McDonald’s restaurants is a straightforward real-estate play, no different from ATM alliances with Citi and other banks.
Unfortunately for industry experts, McDonald’s WiFi strategy suggests not that it is a innovator in the fast food category but that it is a company that has lost its focus and basic understanding of its core customers.

(Thanks Carolyn.)

Posted by Bradley Peacock | Permalink


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