Q1. McDonald’s seems to believe that the hotel industry is attractive. What makes for an attractive market opportunity? Explain why you believe that the hotel industry is attractive or unattractive.
Anyone looking at a successful company from a different industry would think it seems attractive, since it looks so easy that anyone should be able to make money at it. However, others, outside the fast food industry, look at McDonald’s and think it is easy to be successful in that industry too. It’s like watching Wayne Gretzky skate; he just makes it look so easy.
An attractive market opportunity is one in which a company can perform profitably. According to Kotler & Keller (K&K), a market opportunity is an area of buyer need and interest in which there is a high probability that company can profitably satisfy that need.
In order to determine the attractiveness and success probability of a market opportunity, K&K suggest that we must perform a market opportunity analysis (MOA) by answering the following questions:
1. Can the benefits involved in the opportunity be articulated to a defined target market?
2. Can the target market(s) be located and reached with cost-effective media and trade channels?
3. Does the company have access to the capabilities and resources needed to deliver the customer benefits?
4. Can the company deliver the benefits better than any actual or potential competitor?
5. Will the financial rate of return meet or exceed the company’s threshold for investment?
If these questions can be answered positively, then there is an attractive market opportunity available.
In the case of McDonald’s, the answers to MOA questions would look something like this:
1. With its fast food restaurants the company determined its target market as middle-aged families with children who value time, reasonable quality, and are budget conscious. McDonald’s customers benefit from fast service, reasonable quality and lower...