Why McDonald’s Is Leaving Walmart A lesson in leverage

The pandemic has officially been present for a year now and with that brings innovative business ideas in order to keep up with the competition.

McDonald’s and Walmart have been in business together for over 30 years. It was always a staple to be in a Walmart and see a McDonald’s location close to the checkout.

Due to the COVID-19 dine-in restrictions, drive-thru restaurants are becoming more and more popular. This is unfortunate news for McDonald’s as there is no drive-thru McDonald’s locations at Walmart.

So what was originally a very lucrative relationship between the two Fortune 500 companies, is now becoming less and less popular. It is noted that in 2012 McDonald’s had 800 locations in Walmart and in 2020 it was reduced to 500 Mcdonald’s locations in Walmart.

The lesson on leverage is that Mcdonald’s and Walmart used to mutually benefit from this agreement. Although, now it has drastically changed.

This is a lesson for all franchisees and entrepreneurs alike because you have to constantly keep innovating in the industry.

If you fail to innovate that will cause you to have financial losses and make your business go under.

In Canada, it is common to see Wendy’s and Tim Hortons in the same building. Also, KFC and Taco Bell have many joint locations.

Leverage is important because if your product or service is good enough you can use your leverage to increase brand awareness, gain new customers, and make an impact.

In the art of negotiations, you can exercise your right in the contract in order to make it more advantageous to your business.

What are some strategic partnerships that you have developed to further your business growth?

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